Bengaluru: Apart from an outlay of Rs. 20,000 crores for technology to capture carbon emissions at source, and tax benefits and relaxations in some aspects of the energy sector – specifically for nuclear power plants (which come with environmental dangers of their own) and lithium batteries for energy storage – the Union Budget 2026-27 held little cheer for the environment.In fact, finance minister Nirmala Sitharaman’s budget speech in which she presented her ninth budget in parliament on February 1 barely spoke of the environment. The budget revealed a push for infrastructure (including developing waterways and coastal cargo and shipping, which are environmentally-damaging); Sitharaman also spoke about fund allocations to mine for rare earth and critical minerals. Air pollution, an issue that India – especially north India and the national capital New Delhi – is grappling with, found no mention at all, and fund allocation for the control of pollution has decreased in this year’s budget. The allocation for the Ministry of Coal, on the other hand, has increased by 3.5 times. Experts warned of what decreased funding for measures to ensure climate change adaptation would mean for the country, and raised concerns that the Budget also ignored highly climate risk-prone regions such as the Himalaya. Energy and carbon storageThe energy sector found a place in the budget this year, as it did last year and the year before that — but mostly, only through tax exemptions. Customs duty exemptions that had been given for the manufacturing of lithium-ion cells for batteries have now been extended to manufacturing of lithium-ion cells for battery energy storage too, said Sitharaman. She also announced basic customs duty exemption on import of sodium antimonate, a chemical that is used in the manufacturing of solar glass.Existing basic customs duty exemption for import of goods required for installing nuclear power projects will be extended till 2035 and for all nuclear plants “irrespective of their capacity”, Sitharaman said. Basic customs duty exemptions will also apply to the import of capital goods required for the processing of critical minerals in India. The entire value of biogas will be excluded while calculating central excise duty payable on biogas-blended CNG.Sitharaman also announced a fund allocation of Rs. 20,000 crores for Carbon Capture, Utilisation and Storage technologies which involve capturing carbon dioxide emissions from large point sources like power generation or industrial facilities that use fossil fuels, and then using them to make other products (such as cement) or storing them underground so that these emissions do not reach the atmosphere. “Aligning with the roadmap launched in December 2025, the Carbon Capture, Utilisation and Storage technologies at scale will achieve higher readiness levels in end-use applications across five industrial sectors including power, steel, cement, refineries and chemicals,” Sitharaman said in her budget speech. “An outlay of [Rs.] 20,000 crores is proposed over the next five years.”These technologies, however, come with their problems. The success of carbon capture technologies are not proven, and NGOs have highlighted the risks of storing carbon dioxide underground (such as leaks). The Intergovernmental Panel on Climate Change, the UN’s climate research body, has also noted that while carbon capture and storage technology can be used as a tool to mitigate climate change, decreasing the use of fossil fuels is still important. The Rs 20,000 crore commitment over five years for Carbon Capture, Utilisation and Storage, continued support for the National Green Hydrogen Mission, and the introduction of new financial mechanisms for battery energy storage systems and pumped storage together signal a pragmatic approach to addressing emissions from hard-to-abate sectors, said Abinash Mohanty, global sector head, Climate Change and Sustainability, IPE Global in a statement.“The budget reflects continuity and intent in India’s energy transition, anchored by measurable investments in clean energy deployment and industrial decarbonisation…the Budget’s emphasis on grid modernisation and inter-state transmission infrastructure is both timely and essential to ensure system reliability, flexibility, and optimal utilisation of clean power assets,” he commented.However, climate mitigation alone cannot address India’s climate reality and without quantified targets, dedicated financing, and institutional focus on resilience-building, the energy transition risks becoming uneven and exclusionary, Mohanty cautioned. “Future budgets must therefore align India’s clean energy ambition with equally robust, evidence-based investments in climate resilience.”Mining and rare earth mineralsInfrastructure – that will come at the cost of the environment – has received a fillip in this year’s budget too. New dedicated freight corridors connecting Dankuni in the East, to Surat in the West will be built; a ship repair ecosystem catering to inland waterways will be set up at Varanasi and Patna; and the government will launch a Coastal Cargo Promotion Scheme “to increase the share of inland waterways and coastal shipping from 6 % to 12 % by 2047”. Twenty new National Waterways (NW) are to be operationalised over the next five years, starting with NW-5 in Odisha “to connect mineral rich areas of Talcher and Angul and industrial centres like Kalinga Nagar to the Ports of Paradeep and Dhamra”, Sitharaman said.Mining and minerals found regular mention in Sitharaman’s budget speech today.“A Scheme for Rare Earth Permanent Magnets was launched in November 2025. We now propose to support the mineral-rich states of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated Rare Earth Corridors to promote mining, processing, research and manufacturing,” Sitharaman announced.While rare earth minerals are important for the energy transition, they have to be mined – which again raises concerns about the impacts on the local environment and communities in the area.“There’s nothing actually concrete in this budget. Even with the elections in mind they have not announced anything for Tamil Nadu. They’re not giving us anything but then they want to mine rare earth from Tamil Nadu. It’s a very very disappointing budget,” K. Kanimozhi, Member of Parliament from Thoothukudi, Tamil Nadu, told reporters on February 1. Detailed budget documents provide a clear sign of the Union government’s push for infrastructure and projects that will impact the environment. The government allocated a revised estimate of Rs. 1,808 crores for the interlinking of rivers in 2025-26. The outlay for projects under this centrally-sponsored scheme has now increased under Budget 2026-27, and is at Rs. 1,906 crores. Numerous scientists and conservationists have warned about the risks of interlinking rivers, as The Wire has reported previously. Nuclear power projects have received higher funding in this year’s budget, as the Finance Minister mentioned in her speech. The actual costs of these projects in 2024-25 was Rs. 2,244 crores (and a revised estimate of Rs. 1,333 crores in 2025-26). In the new budget, the government has allocated Rs. 2,500 crores for these projects across the country, far higher than the allocation for these this year (at Rs. 2,086 crores) — a clear sign of how nuclear power projects will be pushed. Again, scientists and activists have called out nuclear power for the inherent risks they still pose to local communities including leaks.The union environment ministry has been allocated Rs. 3,579 crores (up from the revised estimate of Rs. 3,481 crores for last year). The Ministry of Coal, meanwhile, has received a huge increase in allocation: up from budget estimates of Rs. 1251.2 crores (and a spending of Rs. 1240.96 crores in the current year), to Rs. 4,390 crores in Budget 2026-27. A scheme for promotion of coal/ lignite gasification has received an unprecedented Rs. 3,525 crores. The scheme had been allocated only Rs. 300 crores in the last budget (with a revised estimate for the year at Rs. 285 crores). No mention of air pollution, or steps to tackle itThis higher allocation for coal and encouragement of lignite gasification comes at a time when fossil fuel-caused air pollution is a concern across the country, contributing to very poor air quality in many parts of north India including the national capital, New Delhi. It also comes at a time when India is looking to transition to cleaner energy sources, as its Nationally Determined Contributions to the United Nations under the Paris Agreement claims.To make matters worse, control of pollution has received an outlay of just Rs. 1,091 crores in this budget. This is a concern because the revised estimates for last year were Rs. 1,300 crores (versus a budget estimate of Rs. 854 crores) — a clear sign that countering pollution needed more funds. And yet, this has not happened in the latest budget. Of course, another concern is that the government spent only Rs. 19 crore in 2024-25 (as per actual estimates presented in this year’s budget documents) on controlling pollution. Instead, while announcing the Biopharma Shakti Scheme with an outlay of Rs. 10,000 crores over the next five years “to develop India as a global biopharma manufacturing hub”, Sitharaman spoke of non-communicable diseases increasing in India in her budget speech: “India’s disease burden is observed to be shifting towards non-communicable diseases, like diabetes, cancer and autoimmune disorders.” Incidentally, studies show a strong link between all these three diseases and air pollution. Meanwhile, funds allocated in this year’s budget for the Central Pollution Control Board were around the same as last year (Rs. 123 crores). Documents show that the spending last year for the Board was just Rs. 116.2 crores – at a time when India has been crippled by high levels of pollution. The budget allocates Rs.35.26 crores for the Commission for Air Quality Management this year, about three crores short of the allocation last year. The National Green Tribunal, surprisingly, has received a higher outlay – Rs. 173.75 in the new budget versus just Rs. 52 crores in the last. Climate change adaptation lags Meanwhile, climate change adaptation appears to have taken a hit. The centre’s Crop Insurance Scheme – which is one of the major central sector schemes – cost the government Rs. 14,473 crores in 2024-25 (actual estimates). But despite this, the scheme has received an allocation of only Rs. 12,200 in the current budget (versus a spending of Rs. 12,267 crores as per the revised estimates of last year). This comes at a time when the vagaries of climate change are hitting farmers hard, with extreme weather events such as floods and droughts increasing in incidence. Crop insurance has been identified as a crucial adaptation measure for farmers to deal with climate change. In 2024-25, the government had allocated Rs. 14,600 crores to the scheme.The CPI(M) in a statement on February 1 called the budget “thoroughly anti-people” and “anti-federal”, one of the reasons being this: “drastically” reducing expenditures under several central and centrally-sponsored schemes including the Crop Insurance Scheme. “The Union Budget 2026 remains a fill-in-the-blank when it comes to climate adaptation,” said Mohanty. “Climate-related economic losses are estimated at over 3% of GDP annually, and more than 80% of India’s population is exposed to escalating climate risks, yet there is no clear, scaled-up fiscal roadmap for adaptation-critical priorities such as heat action planning, flood-resilient infrastructure, water security, or climate-resilient agriculture.”While promoting tourism in many parts of India through trekking trails found mention in Sitharaman’s union budget speech, no financial help seems forthcoming for the Himalayan region to tackle climate disasters. The region witnesses many issues including extreme weather events such as Glacial Lake Outburst Floods and climate change-induced intense rains, made worse by unscientific infrastructure and development.“The Union Budget 2026–27 offers no specific allocation or policy framework for Uttarakhand or the Indian Himalayan Region,” commented Uttarakhand-based social and environmental activist Anoop Nautiyal, in a post on social media. “Support remains indirect, ignoring the region’s unique climate, ecological and disaster risks. The absence of provisions for floating population, green bonus or mountain-specific risk frameworks highlights the urgent need for Himalayan states to unite around a collective, common agenda.”Missing support for the energy sectorScientists pointed out that the renewable energy sector could have done with more support.“While the Budget delivered no big-ticket announcements for renewables, continued duty exemptions, support for critical minerals, and manufacturing reforms are expected to quietly strengthen clean energy supply chains,” commented Duttatreya Das, Energy Analyst, Asia, at Ember, in a statement. “Additional capital subsidies could have further unlocked the potential of PLI-led manufacturing, particularly in upstream solar and energy storage.”The support for India’s energy transition “remains uneven” in the new budget, commented Vibhuti Garg, Director, South Asia, Institute for Energy Economics and Financial Analysis (IEEFA).Allocations for select schemes such as PM Surya Ghar Muft Bijli Yojana, which promotes decentralised renewable energy, have increased, and the budget for bioenergy has been raised from Rs.175 crore to Rs.275 crore. However, spending on wind energy, and more critically on transmission and energy storage, has either stagnated or declined, Garg said. “This is concerning because transmission infrastructure and storage are fundamental to integrating higher shares of renewable energy into the grid. As renewable penetration rises, these elements become not optional but indispensable, and the current level of support falls short of what is required.”There was “limited budgetary support” under the PLI scheme for solar modules and cells, said Garg. Electric vehicles (EVs), where cost barriers remain significant, warranted stronger policy and fiscal support, she added. “While three-wheelers have reached market maturity, buses, trucks, and even passenger four-wheelers are still expensive, and targeted government support could have meaningfully accelerated adoption. This is especially critical in light of worsening air pollution in the Delhi NCR region, where transport electrification can deliver immediate public health benefits.”At the same time, relatively unproven or expensive technologies such as coal and lignite gasification and CCUS have received significantly higher allocations, Garg pointed out. “While India’s seriousness about nuclear energy is evident—and nuclear can contribute to decarbonisation—it remains capital-intensive, and safety concerns continue to influence public and investor confidence.”