Rs 19,744 cr  approved for green hydrogen mission  


India on Wednesday initiated a significant leap towards transforming into a global hub for production, utilization and export of green hydrogen and its derivatives with the Cabinet approval of the National Green Hydrogen Mission with an initial outlay of Rs19,744 crore. 

This would include an outlay of Rs 17,490 crore for the Strategic Interventions for Green Hydrogen Transition Programme (SIGHT) programme, Rs 1,466 crore for pilot projects, Rs 400 crore for R&D, and Rs 388 crore towards other mission components with the Ministry of New and Renewable Energy formulating the scheme guidelines for implementation of the respective components. 

If all goes as per the Government plan, the implications are formidable. India will witness significant developments by 2030 led by the development of green hydrogen production capacity of at least 5 million metric tonne  (MMT)  per annum with an associated renewable energy capacity addition of about 125 GW in the country backed by over Rs 8 lakh crore in total investments and resulting in creation of over six lakh jobs. 

According to a India Brand Equity Foundation report, the Government may also be planning a USD 2.2 billion (Rs 180 billion) incentive in the upcoming Budget that aims to reduce the production cost of green hydrogen by a fifth, over the next five years. Green hydrogen is produced by splitting water using electrolysis. 

The current cost of green hydrogen is around USD 3.62 (Rs 300) to USD 4.83 (Rs 400) per kg and the incentive provided by the Government is expected to be USD 0.60 (Rs 50) per kg for 3 years. 

Moreover, as per IBEF, with the estimated global demand for green hydrogen expected to exceed 100 million tonnes by 2030, the Government seeks to export 70 per cent of the production to countries like South Korea, Japan and European Union besides planning to develop 5 MT of green hydrogen annually by 2030 along with achieving a capacity of 15 gigawatts of electrolyser manufacturing by 2030. Equally important and in line with India’s climate goals, there will be a cumulative reduction in fossil fuel imports of over Rs 1 lakh crore and abatement of nearly 50 MMT of annual greenhouse gas emissions.

The Government also plans to develop an enabling policy framework to support establishment of the green hydrogen ecosystem supported by robust standards and regulations. Key to this ecosystem will be a Strategic Hydrogen Innovation Partnership (SHIP) providing a public-private partnership framework for R&D to ensure such projects are goaloriented, time bound and suitably scaled up to develop globally competitive technologies. A coordinated skill development programme will also be undertaken under the Mission. 

There are expectations of a wide-range of spillover effects from the Cabinet approval like creation of export opportunities for green hydrogen and its derivatives, decarbonisation of industrial, mobility and energy sectors and reduction in dependence on imported fossil fuels and feedstock. Further, indigenous manufacturing capabilities will get a boost alongwith development of cutting-edge technologies. As part of the framework, two distinct financial incentive mechanisms including the targeting of domestic manufacturing of electrolysers and production of green hydrogen will be provided under SIGHT. The Mission will also support pilot projects in emerging enduse sectors and production pathways and regions capable of supporting large scale production and/or utilization of hydrogen will be identified and developed as green hydrogen hubs. 

Government initiative and intervention has already set the ball rolling in the corporate court. The PHD Chamber of Commerce & Industry, in its Budget recommendations, has sought zero import duty on electrolysers to attract huge investment in green hydrogen and make India export hub by 2030. In its ‘India Century Report’, FICCI has urged adoption of measures to fast-track India’s emergence as the green hydrogen capital of the world like earmarking specific green energy hubs (including RE and hydrogen clusters) situated at ports and key industrial centres which would capture large-scale industrial and export demand for hydrogen (via hydrogen special economic zones for export). 

Such clusters could include companies across the entire hydrogen value chain (production, storage, pipeline distribution, and refuelling) to optimise costs. India Inc has also sought support from state regulators to encourage hydrogen usage by setting up targets for partial and full adoption and providing viability-gap funding (VGF) in industrial applications (green fertiliser, refining, green steel) as well as hydrogen mixing (in combined cycle gas turbines and city gas) among other areas. 

While companies like Indian Oil, NTPC, JSW Energy, and Acme Solar have drawn up big plans for green hydrogen, Cummins, a global power solutions provider will provide technology in collaboration with Tecnimont Private, the Indian subsidiary of Maire Tecnimont Group – to build one of India’s largest proton exchange membrane (PEM) electrolyzer for GAIL at Vijaipur, in Madhya Pradesh. Cummins will leverage its proprietary PEM electrolysis technology, one of the most advanced and efficient technologies available, to manufacture electrolyzers for the GAIL Green Hydrogen production project which is anticipated to produce 4.3 tons of green hydrogen per day (equivalent to 10 MW of electrical power input). 

Among other corporate initiatives, Oil India has commissioned India’s first 99.9 per cent pure hydrogen pilot plant in Assam in its first significant step towards boosting green hydrogen economy in India and Adani has partnered with a French multinational TotalEnergies to create the world’s greatest green hydrogen ecosystem. India’s companies are also set to gain strongly from India’s growing collaboration with the European Union following the first EU-India Green Hydrogen Forum in September 2022 and ambitious programmes and targets set by both partners for wider adoption of green hydrogen. The Forum has highlighted EU-India businesses to discuss potential joint projects on hydrogen and served as a platform to exchange best practices, policy frameworks and production and application technologies for renewable hydrogen as well as explore the potential for international hydrogen trade. While India announced its National Hydrogen Mission last year, the EU launched the European Hydrogen Strategy in 2020 and the Russian invasion of Ukraine has further accelerated the implementation of EU green deal policies, including on hydrogen. 

The bloc is now targeting the production of 1 million tonnes of renewable hydrogen by 2024, and 20 million tonnes of hydrogen by 2030. Apart from the energy security aspect in the India-EU partnership, is a common interest in developing secure supply chains and competitive and rules-based markets. The EU has also expressed interest to explore with India and  financing partners the possibility of building a pipeline of hydrogen projects in India and leveraging private sector investments in innovative technologies under the framework of EU Global Gateway initiative. Other industry and business opportunities emerging from discussions between Indian and EU stakeholders are zero energy buildings, grid integration, smart grids, storage, power market design, interconnection, cold chain and sustainable financing as well as the just energy transition.