1. National Clean Energy Fund
a. Develop an effective and efficient funds utilization framework, enabling commercial banks to lend to and invest in Renewable Energy, Energy Efficiency & Water management/recycling projects.
b. Incentivizing commercial banks to develop and launch fund raising instruments of their own for the purposes of easing/facilitating environmental project financing.
2. Municipal Services (Solid Waste and others)
a. Decentralized segregation and organic waste processing should be incentivized. This could be done through penalties for noncompliance and incentives through municipality purchasing compost at rates attractive to organic waste processers.
b. Collection and Transportation of Municipal Solid Waste (MSW)
• Grant should be provided for Solid Waste Equipment like Mini Tippers, Refuse Compactors, Tipper Trucks, Garbage Bins, Garbage Containers, Power Sweeping Machines, Hook Loaders-Bulk Transportation, Garbage Compaction Units, as all solid waste management concessionaires have to purchase or import some of them as well due to lack of a quality product in India. They should be given the status of pollution control equipment when they are imported/purchased against a work order under MSW Rules 2000 and duties should be levied at concessional rate / nil rates.
• Activities related to management of Solid Waste should be exempted from Service Tax (by adding it to the negative list of the Services)
• Provision of support in the budget for recycling and process outputs (output based) which will ensure better Operations and Maintenance of existing processing facilities.
3. Incentives for Processing of Municipal Solid Wastes
• 100 % depreciation in the first year for investment in wastewater recycling, waste recycling, green belt, E-waste processing plant, advanced pollution control technologies such as flue gas de-sulphurisation, advanced wastewater treatment such as MBR, ozone treatment, etc;
• Exemption of VAT for manufacturers and custom duty exemption for importers of advanced pollution control equipments/systems [like flue gas de-sulphurisation, advanced wastewater treatment such as MBR, ozone treatment, environmental monitoring instruments for air quality, stack emission, noise monitoring, water quality, composting process control, compost quality monitoring, etc]; and
•Service Tax exemptions for Operation and Maintenance of centralized /common wastewater/inductrial effluent treatment plant, MSW sanitary landfill facilities, E-waste processing facilities & transport of industrial waste, Ewaste,other wastes, etc to authorized treatment, recycling or disposal sites.
• There should be enablers for recycling waste through reasonable “gate fees” for units that would recycle plastics, paper/cardboard, metals, etc.
• Composting of Municipal Solid Waste: Marketing support of Rs. 2320 per ton of Fertilizer Control Order (FCO) compliant city compost in order to provide compost to the farmers at an affordable price and enhance organic Carbon in the soil to improve productivity.
• 100% of the compost produced through treatment of municipal solid waste should be purchased by the Urban Local Bodies subject to meeting the quality norms. The purchase price of the compost should recover full costs like the fixed costs and variable costs including the predetermined profit margins for the developer/operating agencies. 50% of the purchase costs should be borne by the central government for a period of ten years while the remaining 50% of the purchase costs should be borne by the state government.
• The municipal finances in India are in precarious state. The tipping fee in India is very low compared to the rates in other parts of the world. The Municipal Solid Waste Management industry serves a huge population base and helps in pollution control - both air and water. Therefore, on the grounds of non availability of indigenous products in India, the industry seeks a reduction in customs tariff if the equipment is used for projects under MSW Rules 2000. Also duty concessions and exemptions should be given to cement industry on Waste Heat Recovery systems and Alternative Fuel and Raw Material Feeding systems.
• Construction & Demolition (C&D) waste management projects: Excise duty exemption for inputs and products made from recycled C&D waste (such as
the precast products like kerb stones, pavement blocks and tiles made from the processing of Construction & Demolition waste).
• Waste to Energy: Electricity tariff support for Waste to Energy projects at Rs. 8/ KWH similar to Solar power. These output oriented supports will greatly help in ensuring processing of municipal waste which in turn will reduce the indiscriminate dumping of waste.
4. Sewage Treatment
• 100% of the bulk treated water should be purchased by the Urban Local Bodies subject to meeting the quality norms. The purchase price should ensure full cost recovery including the predetermined profit margins for the developer/operating agencies. Union Government should give 25% subsidy on the capital costs and also give viability of funding for sustained operations.
• Provision is requested in the Union Budget 2013-14 for financial aid in terms of 50% subsidy, for manufacturing industries for development of effluent treatment facility by which zero liquid discharge status can be achieved in line with the concept of 4Rs (Reduce, Recover, Reuse and Recycle). This will be helpful not only in protecting the environment but also saving scarce valuable natural resource - water. Service tax exemptions for Operation and Maintenance of centralized / common wastewater / industrial effluent
5. Carbon Revenues To motivate the Corporate Sector to engage further in green house gas (GHG) emissions reduction projects, income derived from sale of Certified Emission Reductions (CERs) should be exempted from income tax. It should be treated as Capital Receipt and not charged to Tax, since CERs are generated from huge investment in capital intensive projects with low return on investment. Moreover, CDM projects receive CERs after deduction of 2% by UNFCCC as Adaptation fund and another 2% needs to be committed for CSR activities. CERs are export products which are sold to developed countries to meet their emissions reduction targets and are of no use in the Indian market. Therefore these carbon credits may be treated accordingly as Export products and accorded similar benefits.
6. Incentives to promote green environment Country is facing serious problem on deteriorating environment and it is seen that approximately 30% of municipal waste comprises of different kinds of packaging waste like plastic, metal, glass, paper etc. which are being used by different segments of the industry. In order to encourage the user industry to use and promote more and more packaging materials which are environment friendly and recyclable,
the Government should announce schemes to provide incentives either in the shape of refund of indirect taxes, providing subsidies or Income tax exemption and also concessional import duties for Capital Goods used to manufacture such packaging materials.
7. Energy Efficiency a. Financial incentives should be extended to Demand Side Management (DSM) projects, particularly for Municipal, Hospital, Infrastructure (i.e. Transportation, Water, etc.). Incentives may be in the form of inclusion in PAT mechanism, Interest Subsidy, etc.
b. Subsidy/grants should be given for preparation of Detailed Energy Audits and Investment Grade energy Audits.
c. DISCOMS, TRANSCOS and ESCOs may be provided with tax incentives to promote investments in Energy Efficiency programs.
8. Particulate Emissions (burning of agricultural residues in fields) Straw baling units should be financed at concessional rates (perhaps similar to farm loans) as there should be “enablers” for establishment of Biomass Briquetting units, which would pay for receipt of agricultural residues and thus ensure that farmers do not economically suffer for collection/transporting agricultural residues instead of burning them on the fields.