In a monumental stride towards a cleaner future, India is positioning itself as a global leader in green hydrogen with its ambitious National Green Hydrogen Mission. With a staggering $2.4 billion in incentives, the country aims to produce 5 million metric tonnes of green hydrogen by 2030. This will catapult India from virtually zero production to the top ranks of green fuel producers worldwide. Green hydrogen, often hailed as the key to a decarbonised future, is set to revolutionise India’s industrial landscape and bolster its global energy stature.
India’s hydrogen journey is no mere pipe dream. Backed by robust federal and state policies, the nation is making green hydrogen economically competitive with the fossil-fuel-based grey hydrogen currently dominating industries. BloombergNEF estimates that current green hydrogen production costs in India range from $3-5 per kilogram, but with the right federal and state incentives, prices could fall below $2 per kilogram—putting it on par with grey hydrogen prices in refineries.
The state-level enthusiasm is palpable. Leading the charge are Uttar Pradesh and Gujarat, with green hydrogen production targets exceeding federal goals. Uttar Pradesh, India’s most populous state, has pledged up to 40% capital subsidy for green hydrogen projects, while Gujarat alone aims for 3 million tonnes of production, over 40% of the cumulative state target. Together, these initiatives will help the country exceed its ambitious 2030 target, with state projections amounting to 7 million tonnes—well beyond the federal goal of 5 million tonnes.
The impact of this mission extends far beyond numbers. Green hydrogen offers a critical solution for decarbonising India’s “hard-to-abate” sectors like steel, fertilisers, and oil refining. By replacing grey hydrogen—produced using fossil fuels—with its cleaner green counterpart, India can significantly cut its carbon emissions and make a substantial contribution towards its 2070 net-zero target. The mission also includes plans to export green hydrogen to energy-hungry markets like Europe and Japan, placing India at the forefront of global energy transformation.
The mission is supported by a plethora of federal and state-level policies. The National Green Hydrogen Mission incentivises both the manufacturing of electrolysers and the production of green hydrogen, ensuring a robust supply chain. In addition, the government has waived national grid transmission charges for renewable energy used in green hydrogen production, giving India a significant competitive edge in the global market.
Uttar Pradesh, for example, offers an extraordinary package of incentives, including up to 30% capital expenditure subsidies, and full transmission charge waivers for 10 years. Maharashtra, another ambitious player, is providing substantial support for hydrogen production plants and green hydrogen-fuelled buses, setting the stage for a hydrogen-powered transport revolution.
Despite this flurry of activity, a significant gap remains—there are no mandates enforcing the use of green hydrogen in industries. While the production landscape looks promising, widespread adoption of green hydrogen is yet to gain traction. The lack of consumption obligations could slow the transition, making it critical for the government to introduce policies that drive actual usage in key sectors like steel, transport, and fertilisers.
India’s green hydrogen push, while ambitious, is not without hurdles. Exporting green hydrogen to Europe, a key market, may be hampered by stringent EU regulations that demand more than just low carbon emissions. India will also face stiff competition from other emerging players in Asia and Latin America.
Nonetheless, India’s lower renewable energy costs, combined with state and federal subsidies, could enable the country to dominate the global green hydrogen market. As geopolitical tensions drive up costs in other regions, India is well-positioned to emerge as a reliable supplier, meeting the growing global demand for clean energy.
India’s hydrogen revolution is gaining momentum, but to fully realise its potential, the country must bridge the gap between production and demand. The government’s policies have successfully catalysed investments and spurred innovation, but future success will depend on driving consumption and scaling up both production and infrastructure.
In the meantime, India’s green hydrogen mission is a beacon of hope for a world grappling with the consequences of climate change. If executed effectively, this mission could not only decarbonise industries but also redefine India’s role in the global energy landscape—ushering in a new era of clean energy leadership.
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