MUMBAI: The work to frame a taxonomy framework for climate finance has already started, and finance ministry hopes to have that in place over the next 8-10 months, a senior ministry official said on Tuesday.
“In the budget 2025, the finance minister (Nirmala Sitharaman) had announced to come out with taxonomy for climate finance. The work on that has already started, and we hope to have that in place over the next eight to 10 months,” Ajay Seth, secretary in the Department of Financial Services, told a CII-organised
financing summit here. As per him, the government is interested in “partnering with industry experts to put that taxonomy framework together. It will take eight to 10 months, or maybe six to eight months, but that’s an exercise we have started”.
Many countries have either started work on taxonomy or finalised one. South Africa, Colombia, South Korea, Thailand, Singapore, Canada, and Mexico are some of the countries which have developed taxonomies. The European Union has done this as well.
India needs climate-smart investment potential of $3.1 trillion from 2018 through 2030. As per an International Finance Corporation report. The largest space for investment is in electric vehicles segment at $667 billion as the government has set a target of electrifying its new vehicles by 2030.
The renewable energy continues to be a good investment avenue at $403.7 billion, the report added. In the budget for FY25, FM announced the government will develop a ‘climate finance taxonomy’ to enhance availability of capital for climate adaptation. This will help India achieve climate commitments and green transition.
Electrifying vehicles by 2030
The largest space for investment is in the electric vehicles segment at $667 billion as the government has set a target of electrifying its new vehicles by 2030