Kerala’s 2023 Budget Lays Emphasis on Green Hydrogen and EV Development

The state aims to become 100% renewable energy-dependent by 2040


Kerala has allocated funds to a host of green initiatives in its 2023 Budget which is aimed at doing away with fossil-fuel dependence by 2040 and achieving net carbon neutrality by 2050.

The Budget announced a road map for setting up green hydrogen hubs in Kochi and Thiruvananthapuram in the next two years for which ₹2 billion (~$24.2 million) was allocated.

In his Budget presentation, state finance minister K N Balagopal said hydrogen fuel can be used in long-haul vehicles as well as ships which will result in bringing down carbon emissions significantly.

The Kerala Budget follows the Union government’s Budget which highlighted the growth of green hydrogen as an alternative fuel. In January, the government announced that an investment of ₹197 billion (~$2.41 billion) would be made for the National Green Hydrogen Mission to accelerate the low-carbon dependency process.

Electric vehicles

Kerala’s 2023 Budget has set aside ₹100 million (~$1.2 million) for an industrial park to manufacture EV batteries and allied equipment. It also announced the setting up of an electric vehicle (EV) industrial park with the support of the Kerala Infrastructure Investment Fund Board (KIIFB).

The state government has also approved a consortium of Travancore Titanium Products Limited, Vikram Sarabhai Space Centre, Centre for Development of Advanced Computing, and Trivandrum Engineering Science and Technology for EV-related initiatives.

The Budget allocated ₹250 million (~$3 million) for the EV consortium project.

Kerala will also be home to an EV drive train testing lab which is set to be operational by July 2023. The facility will be established under the TrEST park.

Solar projects

A total of ₹200 million (~$2.4 million) has been earmarked for solar power projects and the ‘Soura’ scheme under the Urja Kerala Mission. The Soura scheme of the Urja Kerala Mission is an ambitious program to install over 1 GW of solar photovoltaic systems in Kerala.

The Budget has also set aside ₹490 million (~$5.9 million) for the activities undertaken by the Agency for New and Renewable Energy Research and Technology (ANERT).

Hydropower projects

The Budget has earmarked ₹100 million (~$1.2 million) for hydroelectric projects including the Idukki Golden Jubilee Power House, Moozhiyar Phase-II, Letchmi, Pooyamkutty, and Poringalkuthu projects.

Another ₹120 million (~$1.4 million) has been allocated for the renovation and modernization of various hydel projects.

The state has provided a cumulative outlay of ₹11.58 billion (~$ 140 million) to the energy sector. Out of this, ₹343.6 million (~$4.1 million) has been earmarked as the state’s share in the Viability Gap Fund and Innovation Fund for renewable energy projects.

Earlier this month, Union Finance Minister Nirmala Sitharaman laid out an expansive budgetary outlay for expediting green transition as she identified ‘Green Growth’ as one of the seven pillars for Budget 2023.