India

Green hydrogen vision

India’s National Hydrogen Mission is a major policy enabler to make India reach its climate targets and become a hub for green hydrogen and green ammonia production (National Hydrogen Mission). In addition, it is targeting to reduce its dependence on fossil fuels and scale up its renewable energy capacity GW 500. The aim is to bring down the cost of green hydrogen to $1.5 per kg and have five million tonnes per year green hydrogen capacity by 2030. 

India has an advantage here due to its geographical location, climate conditions and abundance of renewable sources of energy like solar, wind and hydropower making it ideal for becoming the world’s cheapest hub for green hydrogen by 2050.  

“Green hydrogen will play a crucial role in helping the nation to mitigate climate change. India should become a global hub for green hydrogen production and exports.”- Narendra Modi, Prime Minister of India 

National Strategy

On January 4, 2023, the Union Cabinet, chaired by Prime Minister Shri Narendra Modi, approved the National Green Hydrogen Mission.  

The Mission is expected to yield wide-ranging benefits, including the creation of export opportunities for green hydrogen and its derivatives, decarbonization of the industrial, mobility, and energy sectors, reduced dependence on imported fossil fuels and feedstock, development of indigenous manufacturing capabilities, creation of employment opportunities, and advancement of cutting-edge technologies. India’s green hydrogen production capacity is anticipated to reach at least 5 MMT million metric tons per annum, with an associated addition of approximately 125 GW in renewable energy capacity. By 2030, the Mission aims to attract over Rs. 8 lakh crore in investments and create over 600,000 jobs. Nearly 50 MMT million metric tons of CO2 emissions are expected to be averted by 2030. 

The Mission will facilitate the creation of demand, production, utilization, and export of green hydrogen. Under the SIGHT program, two distinct financial incentive mechanisms will be offered to promote domestic manufacturing of electrolysers and the production of green hydrogen. The Mission will also support pilot projects in emerging end-use sectors and various production pathways. Regions supporting large-scale output and/or utilization of hydrogen will be identified and developed as Green Hydrogen Hubs. 

An enabling policy framework will be established to support the development of the green hydrogen ecosystem. A robust framework for standards and regulations will also be developed. Furthermore, a public-private partnership for R&D—known as the Strategic Hydrogen Innovation Partnership (SHIP)—will be facilitated under the Mission. R&D projects will be goal-oriented, time-bound, and designed to scale up and develop globally competitive technologies. A coordinated skill development program will also be implemented in the Mission. Additionally, the imperative of easing the business process will be prioritized, with efforts made for simplified procedures and expedited approvals using technology. 

The aim is to make India a global hub for producing, using, and exporting green hydrogen and its derivatives. 

Capacity and price

• The Indian government has set out an ambitious green hydrogen production target of 5 million metric tonnes per annum by 2030, with an associated renewable energy capacity of about 125 GW by 2030.

• To reach this production target, the government aims for 15 GW by 2030 of electrolysis capacity.  

• The policy measures in the Hydrogen Mission are expected to reduce the green hydrogen production cost to $1.5 per kg by 2030. 

Impact targets

Through the National Green Hydrogen Mission, the India government targets:

- Creation of 600,000 jobs by 2030.

- Cumulative reduction in fossil fuel imports over € 11.4 billion by 2030.

- Abatement of nearly 50 MMT of annual greenhouse gas emissions by 2030.

- An expected investment of over €90 billion in green hydrogen by 2030.

Policy spotlight

Several remarkable developments have occurred in India’s green hydrogen sector after the government announced the National Green Hydrogen Mission. 

Tenders: In the first quarter of 2024, the Solar Energy Corporation of India (SECI) made remarkable strides in enhancing India’s green hydrogen capabilities through ambitious tenders, competitive auctions, and proactive regulatory measures. SECI launched a significant tender to establish an impressive 1,500 MW of electrolyzer manufacturing capacity under the Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme (Tranche-II). This initiative is a decisive move to scale up green hydrogen production in India, positioning the country as a leader in the transition to cleaner energy solutions. 

Auctions Completed: During Q1 2024, SECI successfully executed two impactful auctions under the SIGHT scheme: 

  - The first auction aimed to establish 1,500 MW of electrolyzer manufacturing facilities in India (Tranche-I, Component I). Electrolyzers are vital for producing green hydrogen, as they efficiently split water into hydrogen and oxygen using renewable energy. Expanding domestic production capacity for these electrolysers is a critical step in advancing India’s green hydrogen sector. 

  - The second auction, conducted under Mode-1-Tranche-I, Component II, selected green hydrogen producers to set up production facilities with a robust combined annual capacity of 412,000 metric tons. 

Green Energy Projects Commissioned in India: In Q1 2024, two groundbreaking green hydrogen projects were commissioned in India: 

  - Larsen & Toubro (L&T) proudly commissioned its first domestically built electrolyser with a capacity of 1 MW at its state-of-the-art green hydrogen plant in Hazira, Gujarat, located at the AM Naik Heavy Engineering Complex. 

  - Jindal Stainless Steel (JSL) took a significant step forward by inaugurating its first green hydrogen plant in Hisar, Haryana, solidifying its position as the first stainless steel company in India to install such a facility on a commercial scale. 

Financing

The initial budget for the Mission is set at Rs. 19,744 crore, which includes Rs. 17,490 crores for the Strategic Interventions for Green Hydrogen Transition (SIGHT) program, Rs. 1,466 crore for pilot projects, Rs. 400 crores for research and development (R&D), and Rs. 388 crores for other components of the Mission. 

Several major investments were confidently announced by prominent stakeholders during the first quarter of 2024: 

  - ReNew expressed its commitment with a substantial investment of INR 26,400 crore for a green hydrogen project, targeting a production capacity of 0.22 Million Metric Tons per Annum (MMTPA) in Karnataka. 

  - Acme Cleantech revealed an impressive investment of INR 27,000 crore to establish a green hydrogen production facility in India with a capacity of 1.10 MMTPA. 

Government GH Lead

• Prime Minister’s Office  

• Ministry of New and Renewable Energy

• NITI Aayog (Planning agency) 

Comments

India’s National Green Hydrogen Mission approved by the government in January 2023 is a major policy enabler by the government for production, export and utilisation of green hydrogen and ammonia. In the coming months, the government is planning to introduce Green Hydrogen Consumption Obligation in petroleum refining and fertiliser production on similar lines of renewable purchase obligation.