The Government of India launched a green hydrogen mission at the Union Cabinet on 4 January 2022 to become Atmanirbhar (self-reliant) in producing, using, and exporting green hydrogen and its derivatives. Under this mission, India aims to become an independent energy producer by 2047 and achieve Net Zero emissions by 2070 This intiative by government has led to several upcoming green hydrogen projects in India boosting the overall green hydrogen production and electrolyzer market . 
 

India’s green hydrogen mission aims to reduce the production cost of green hydrogen by utilizing its solar energy and wind capacity and making it a competitive alternative to the traditional gray hydrogen. Currently, India has a total solar power capacity of 87.20 GW and wind power capacity of 47.07 GW as of July 2024. 
 

The clean hydrogen mission in India is subject to a low-carbon hydrogen economy transition, reducing dependence on fossil fuels, thus positioning India as a global hub for green hydrogen production.

Green Hydrogen Mission Target

• The development of green hydrogen infrastructure to produce 5 MMT of green hydrogen annually.
• In addition to green hydrogen production, the policy aims to increase renewable energy capacity of about 125 GW in the country.
• Financial incentives of INR 8 lakh crore (USD 96 billion)
• 6 lakh job opportunities will be created during this mission
• The overall reduction in fossil fuel usage of over INR 1 lakh crore
• Abatement of  50 MMT carbon emissions annually

Green Hydrogen Mission Budget

Current Scenario of Green Hydrogen in India

India aims to produce 5 MMT (million metric tons) annually by 2030 through infrastructural development for green hydrogen production, storage, and distribution. From its launch, the green hydrogen mission promoted green hydrogen production through regular recommendations on regulations, codes, and standards for the production of green hydrogen in India. 

It includes the SIGHT program (Strategic Interventions for Green Hydrogen Transition) that provides financial incentives to promote faster infusion of green hydrogen across various sectors in India. During its launch, the SIGHT program was awarded an outlay of 17,490 crore (USD 2.1 billion).
 

In 2024, the green hydrogen market in India witnessed major developments under the national green hydrogen mission. On 9th January, a scheme for green hydrogen production contracts was awarded to 10 companies to produce 4,12,000 tons of green hydrogen per annum. 
 

Likewise, green ammonia production is also on the rise. Under the SIGHT program, bidding for a green ammonia production capacity of 5.39 lakh MT/annum was conducted on 8th June 2024. With an increased demand for green ammonia, the annual production is scaled to 7.5 lakh tons annually.

Read: Top 7 Upcoming Green Hydrogen Projects in India

Green Hydrogen Policy 2023

The national green hydrogen mission was launched in 2022 by the Union Cabinet but was approved officially in 2023. The green hydrogen policy includes subsidies and tax breaks for green hydrogen production corridors leading to an increase in domestic players. Below is green hydrogen policy and regulations enabled by the Government of India:

ISTS Charges Waiver: An exemption of the ISTS (Inter State Transmission System) charges for a period of 25 years from the date of commissioning of the GH2/GA project. This waiver is applicable from 30th June 2025 to 31st December 2030.

Environmental Clearance (EC): MOEFCC (Ministry of Environment, Forest and Climate Change) specifies that standalone plants producing GH2/GA through electrolysis of water using renewable energy won’t require any prior EC.

Open Access: The government of India aims to boost green hydrogen production and usage through Green Energy Open Access Rules (GOAR) launched on 6th June 2022. Under the following regulations are implied for green hydrogen production and usage: 

• Open Access transitions reduce from 1 MW to 100 KW to encourage small consumers to purchase renewable power through open access.
• Discoms (Distribution Company) shall procure and supply green power to eligible consumers.
• Approval to green open access through the national portal is to be granted in 15 days or will be deemed to have been granted.
• Commercial and industrial consumers can purchase green power voluntarily.
• Open Access charges such as transmission charges, wheeling charges, cross-subsidary surcharges, standby & banking charges are levied.
• Implementation of uniform RPO (Renewable Purchase Obligation) on all obligated entities and distribution licensees of GH2/GA.

Single Window Clearance Portal: A single window will be streamlined for all statutory clearances and permissions related to green hydrogen production and usage.

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Green Hydrogen Policies by States

Rajasthan: Green Hydrogen Policy

The green hydrogen policy was launched on 31st March 2030 to achieve a target of 2000 KTPA of green hydrogen production capacity by 2030. Likewise, commissioning of one giga factory for electrolyzer manufacturing and one green hydrogen valley. To ensure 20% of green hydrogen exports from India and blend about 10% of green hydrogen in natural gas pipelines for the gas produced to meet Rajasthan demand by 2030.

Incentives for Green Hydrogen

• About 30% subsidy for setting up R&D with a limit of INR 5 crore
• 100% waiver on wheeling and transmission charges for 7-10 years.
• 100% exemption on surcharges for 10 years.
• Land allotment for GH2 from treated brackish water on priority.

Uttar Pradesh: Green Hydrogen Policy

Under this policy, Uttar Pradesh targets to achieve 1 MMTPA of green hydrogen production by 2028. This policy aims to create 1.20 lakh jobs by 2028 and is valid for 5 years from its notification. 

Incentives for Green Hydrogen

A capital subsidy of 10-30% is provided to green hydrogen producing companies based on the geographical area of investment. 

• A 40% capital subsidy is announced for first five GH2 projects worth INR 225 crore per year
• Government land will be allocated for lease at INR 1/acre per year and at INR 15000/ acre per year for private investors.
• A 100% stamp duty exemption will be awarded for land and electricity duty for 10 years.

Maharashtra: Maharashtra Harit Hydrogen Policy

This policy was launched in October 2023 to achieve 500 KTPA (Kilotonnes per year) of green hydrogen production capacity by 2030. This policy aims to achieve decarbonization in the energy sector and encourage development and export of green hydrogen and its derivatives. 

Incentives for Green Hydrogen

A capital subsidy of 30% to promote green hydrogen production and usage. This subsidy is applicable for:

• First 3 anchor Green Hydrogen production projects
• First 500 hydrogen based fuel cell vehicles for MSRTC worth INR 60 lakh/vehicle
• Hydrogen Refueling stations worth INR 4.5 crore
• Hydrogen project pipelines 10 km long worth INR 2.5 crore
• Grant for blending green hydrogen with CNG for 5 years.
• Waivers on electricity surcharges and duties and 60% discount on electricity transmission for 10 years. 
• 1% interest subsidy on hydrogen transport projects and 100% exemption on stamp duty of land conversion to green hydrogen production plant.

Andhra Pradesh: Green Hydrogen and Green Ammonia Policy

Under this green hydrogen policy launched in June 2023, Andhra Pradesh aims to achieve 0.5 MMTPA (Million Metric Tonnes per annum) of green hydrogen or green ammonia and 2.0 MMTPA in next five years. Furthermore, about 12,000 jobs per MMTPA production are to be created.

Incentives for Green Hydrogen

• 100% SGST reimbursement on GH2/GA sales within the state, with a 100% exemption from electricity duty used for production.
• 25% reimbursement of intrastate charges worth INR 10 lakh/MW annually.
• 100% exemption from stamp duty and land conversion charges.

Odisha: Green Hydrogen Policy

The Odisha government improvised its renewable energy policy to integrate and promote green hydrogen and its derivatives. This policy includes the following regulations: 

Incentives for Renewable Energy

• A 30% capital subsidy for plant and machinery with a 50% concession on land rate for green hydrogen plant installation and setup.
• Reimbursement of INR 3/unit for renewable energy power for 20 years.
• Exemptions and reimbursements on STU (State Transmission Utilities), cross subsidy and surcharges.
• 15 year exemption on electricity duty on REpower
• Reduced wheeling charges for renewable power consumption and exemption on stamp duty and land charges for renewable power projects.

West Bengal: Green Hydrogen Policy

The green hydrogen policy launched by West Bengal in December 2023, will be in effect for 5 years. Under this policy, the government will identify green hydrogen demand centers via GIS, and encourage state level R&D for Gh2 and GA.  A few major features under this green hydrogen policy are:

Incentives for Green Hydrogen

• 100% waiver on electricity duty charges
• 30 day banking period for RE power for GH2/GA production units
• 100% stamp duty exemption for land conversion charges.

Green Hydrogen Mission Timeline

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Major Green Hydrogen Projects Segmentation in India

Pilot Projects under the National Hydrogen Mission

To further boost the green hydrogen sector under this mission, pilot projects are planned to induce green hydrogen into various regions and decentralize energy applications. The major focus is on areas such as long range heavy mobility, steel, shipping and biomass to hydrogen projects. Below is the outlay breakdown of the pilot projects under this mission:

Also Read: Top 7 Upcoming Green Hydrogen Projects in India

Green Hydrogen Hubs in India

The national hydrogen mission aims to reduce fossil fuel imports and increase renewable power by supporting large scale green hydrogen hubs in India. About INR 400 crore has been sanctioned under this mission for the green hydrogen hubs and other clean energy projects. This mission targets to set up at least two green hydrogen hubs in the first phase.

Summary

The national hydrogen mission is launched as a renewable energy source to increase the country's cumulative green hydrogen production capacity and lead to a smooth energy transition. The green hydrogen mission was launched in 2023 in the Union Cabinet and is envisioned by the Ministry of New and Renewable Energy (MNRE). 

The mission was allocated an outlay of INR 19,744 crore (USD 2.37 billion) and will be carried in two phases during the FY of 2022-23 to 2029-30. India aims to become a global hub for green hydrogen production and its derivatives and position itself in the green hydrogen export industry.

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