Green tax suggested to spend on renewable energy

Notably the Government of Nepal has announced that renewable energy will be prioritized in the budget for the next financial year 2081-82. But, there is no clear action plan mentioned or indicated, the experts, entrepreneurs, professionals and stakeholders in renewable energy sector complain. This was discussed in a meeting organised to discuss on the ‘Budget Review 2081’ The meeting was organized by the Renewable Energy Confederation of Nepal (RECON) in Kathmandu on Thursday.

Although, renewable energy has been prioritized in the budget, the budget allocated for the promotion and development of renewable energy is very low and there is no clear action plan, the meeting participants commented. In the next year’s budget, the government is said to commence gradual action to replace fossil energy with clean and renewable energy in order to achieve the goal of zero carbon emissions by 2045, arrangement will be made to connect 100 megawatts of solar electricity generated by the private sector to diversify energy production, and research and development to promote green hydrogen. They also say that the budget is silent on hydropower and other sources of renewable energy.

Likewise, renewable energy professionals have said that the budget had missed to address issues such as upgrading micro hydropower plants, connecting them to the national grid, and promoting domestic and large-scale biogas plants.

They suggested the government should not only focus on plans, but should be clear and well prepared in policies and action plans.

They further stressed that the ‘green tax’ imposed on petroleum products and coal should be spent on renewable energy sector to reduce carbon emissions. They added that the contribution of renewable energy sources is important in reducing renewable energy emissions and that the ‘green tax’ should be accumulated in a dedicated fund, keeping apart from the central fund of revenue income.

Stakeholders emphasized that the renewable energy sector should get benefit from the green tax. They mentioned that ‘Pollution Control Fund’, the tax collected on petroleum products has not been spent so far for the benefit of the heading of the tax.

The participants of the event said that although the government prioritizes renewable energy as an important part of the sustainable development goal, the government’s interest and international support and commitment have not been well coordinated.

In order to develop entrepreneurship without limiting the renewable energy sector to a programme dependent only on subsidies, Nepal Rastra Bank should create mandatory provisions it in the monetary policy to provide ‘concessional loans’ to the renewable energy sector, and they insist on creating a clear procedure for spending green tax. In the discussion, former minister and campaigner of renewable energy Ganesh Shah, former executive director of Alternative Energy Promotion Centre Dr. Ram Prasad Dhital, energy experts Prof. Dr. Ramesh Kumar Maskey, Vishwa Bhushan Amatya, RECON chairperson Gun Raj Dhakal and others expressed their opinion.