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Budget announcement for FY24-25 continues with its green focus, first introduced last year. Last year’s plan indicated that a green, sustainable and circular economic development will be a strategic pillar for the government. This emphasis has been extended in the interim Budget as well.
This should benefit speciality chemical companies in the long run. Solar film manufacturing and battery, energy storage solutions involve demand for specialised chemicals. While the demand for such new-age solutions has taken off, the companies are currently in a downcycle as inventory stocking and lower prices have impacted growth expectations. The announcement in the interim Budget reinforces the long-term direction of green energy which should positively rub off on speciality chemicals.
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Solarisation scheme
Under the roof-top solarisation scheme 1 crore households will be targeted. The households will be enabled to obtain up to 300 units of free electricity every month with savings estimated at ₹15,000 to ₹18,000 per year per household. The Budget announcement also announced expanding and strengthening electric vehicle (EV) ecosystem by supporting infrastructure related to charging stations. Electric buses for public transport are also expected to benefit from the scheme.
Speciality chemical companies, mainly the ones focussed on fluorination, can be expected to benefit. Electrolytes in batteries, solar films used in solar panels, waste treatment in biogas and biomass, efficient catalysts and environment-compliant refrigerants; chemicals are used in most green solutions. SRF, Gujarat Flurochem and Anupam Rasayan are exploring or commercialising products for solar films or battery storage. Tatva Chintan and Clean Science are operating in clean catalyst or green solution space.
The customs duty for Fluorospar, a raw material for fluorochemicals which are used in pharma, agro-chem and new-age energy solutions, has been reduced from 5 per cent to 2.5 per cent in last year’s announcement itself. PLI and other incentives for new ventures have been a broad support for import substitution or friend-shoring supply chains. The current announcements add a lever for demand growth.
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