New Delhi: The domestic industry has urged that the import tariff on electrolyzers, which are used to split water to make hydrogen, be reduced to zero before the release of the Union Budget 2023–24.

"This one action will spur significant investment in green hydrogen. By 2030, this would turn India into an export center. Since green hydrogen is not currently generated in the nation, there is no income loss," In its budget request, the Progress, Harmony and Development Chamber of Commerce & Industry (PHDCCI) stated.

Other important suggestions include eliminating taxes on biofuels, implementing zero GST on green cement and green steel, and aligning the Production-Linked Incentive (PLI) program for the manufacture of wind turbine generators and equipment with the solar PLI program.

The chamber added that even though the current targets are much larger, the government should bring back regulator-determined tariffs in place of competitive bidding-based tariffs because capacity additions have been very slow since the introduction of reverse auctions-based determination of tariffs.

"It is necessary to have tariffs that are remunerative enough for them all, To restore the interest of all stakeholders, such as OEMs, developers, lenders, and investors back to the sector and enable major capacity increases in a short period of time," the PHDCCI's statement.

A fund should be established, according to the industry group, to finance the installation of Battery Energy Storage Systems (BESS) until such systems can sustain themselves economically. The budget for the previous year included funding for battery-switching marketing.

The Capacity Utilization Factor (CUF) can be enhanced for the stability of the grid and value to utilities, but adding BESS to a hybrid park is still not an economically feasible alternative, according to PHDCCI.

Another important suggestion relates to duty benefits on essential elements in the production of green energy. On April 1, 2023, the Ministry of New and Renewable Energy (MNRE) will end the 2.50% custom duty rebate that is given on certain essential parts.

According to the trade group, this would result in a loss for the sector, and the budget must include an unconditional duty refund of 2.50% on crucial parts that are unique to each turbine and cannot be bought or sold on the open market.

"This refund should only apply to special orders, and it shouldn't require MNRE clearance with each shipment. An annual approval might be provided for a certain model."

According to the chamber, policy regimes at the federal and state levels should promote existing wind farms to hybridize by the inclusion of sufficient solar capacity and vice versa. The budget should also prioritize the building of hybrid parks.