The Government of India has launched the ‘National Hydrogen Mission’ in 2021 to promote the production and use of green hydrogen in the country. The mission aims to establish India as a leading producer and exporter of green hydrogen by 2030. The mission has also set up a target of producing 5 Million Metric Tonnes (MMT) per annum of Green Hydrogen by 2030. It also aims to bring down the cost of green hydrogen to less than ₹100 ($1.36) per kilogram by 2023 and ₹60-80 ($0.82-$1.09) per kilogram by 2030.
The mission has identified key sectors, such as steel, fertilizers, and refineries, for the adoption of green hydrogen. It also aims to develop a green hydrogen ecosystem by promoting R&D, developing infrastructure, and creating a favourable policy framework.
2023 Budget Allocations for National Green Hydrogen Mission
On January 4, 2023, the Union Cabinet approved the National Green Hydrogen Mission with a total initial outlay of Rs 19,744 crore for the development of a green hydrogen ecosystem. The funds will be used to set up electrolyser manufacturing facilities, R&D, and demonstration projects. The government also plans to provide incentives for the adoption of green hydrogen in key sectors.
Around Rs. 17,490 crore of the Rs 19,744 crore budget will go towards incentives for the creation of green hydrogen and the creation and production of electrolysers. The remaining Rs 1,466 crore would be allocated for pilot projects, meanwhile Rs 400 crore and Rs 388 crore, respectively, will be used for research and development (R&D) and other mission components.
Insights of National Green Hydrogen Mission
- India has set its sight to become energy independent by 2047 and achieve Net Zero by 2070, the role of Green Hydrogen is critical.
- The objective of the Mission is to make India the Global Hub for production, usage and export of Green Hydrogen and its derivatives. India’s aim is to become Aatmanirbhar (self-reliant) through clean energy.
- The Mission is to build capabilities to produce at least 5 Million Metric Tonne (MMT) of Green Hydrogen per annum by 2030, with potential to reach 10 MMT per annum with growth of export markets.
- The mission is to be implemented in a phased manner, focusing initially on deployment of Green Hydrogen in sectors that are already using hydrogen, and evolving an ecosystem for R&D, regulations and pilot projects. The later phase of the Mission will build on these foundational activities and undertake Green Hydrogen initiatives in new sectors of the economy.
Green Hydrogen Policy
Ministry of Power unveiled the first part of India’s much awaited Green Hydrogen Policy on February 17, 2022. The policy aims to meet the target of producing 5 million tons of Green Hydrogen by 2030 and replace fossil fuels by Green Hydrogen and Ammonia.
Features of the Policy
- Waiver of Transmission charges: The inter-state transmission charges are waived for a period of 25 years for the producers of Green Hydrogen/ Ammonia for the projects which are commissioned before 30th June 2025.
- Sourcing: Green Hydrogen / Ammonia can be produced by a developer by purchasing Renewable Energy from the power exchange or a co-located Renewable Energy plant, or sourced from a remotely located Renewable Energy plants, whether set up by themselves, or a third party.
- Open access: Green Hydrogen/ Ammonia plants will be granted Open Access for sourcing of Renewable Energy within 15 days of receipt of application complete in all respects. The Open Access charges shall be in accordance with Rules as laid down.
- Banking of unconsumed Renewable Energy: The Producer may bank unconsumed renewable energy with the distributor up to 30 days and take it back when required.
- Connectivity: at the generation end and the Green Hydrogen / Green Ammonia manufacturing end, to the ISTS for Renewable Energy capacity set up for the purpose of manufacturing Green Hydrogen / Green Ammonia shall be granted on priority under the Electricity (Transmission system planning, development and recovery of Inter State Transmission charges) Rules 2021.
- Storage: Manufacturers of Green Hydrogen / Ammonia shall be allowed to set up bunkers near Ports for storage of Green Ammonia for export / use by shipping. The land for the storage purpose shall be provided by the respective Port Authorities at applicable charges. The Government of India proposes to set up Manufacturing Zones. Green Hydrogen /Ammonia production plant can be set up in any of the Manufacturing Zones.
- Count towards Renewable Purchase Obligation (RPO) compliance: Renewable Energy consumed for the production of Green Hydrogen / Green Ammonia shall count towards RPO compliance of the consuming entity. The renewable energy consumed beyond obligation of the producer shall count towards RPO compliance of the DISCOM in whose area the project is located.
- Supply by Distribution Licensees: Distribution licensees may also procure and supply Renewable Energy to the manufacturers of Green Hydrogen / Green Ammonia in their States. In such cases, the Distribution licensee shall only charge the cost of procurement as well as the wheeling charges and a small margin as determined by the State Commission.
- Single Portal: Ministry of New and Renewable Energy (MNRE) will establish a single portal for all statutory clearances and permissions required for manufacture, transportation, storage and distribution of Green Hydrogen / Green Ammonia. The concerned agencies/authorities will be requested to provide the clearances and permissions in a time-bound manner, preferably within a period of 30 days from the date of application.
- Land allotment: Land in Renewable Energy Parks can be allotted for the manufacture of Green Hydrogen / Green Ammonia. In order to achieve competitive prices, MNRE may aggregate demand from different sectors and have consolidated bids conducted for procurement of Green Hydrogen/Green Ammonia through any of the designated implementing agencies.
Latest Updates on Green Hydrogen
The use of green hydrogen is gaining momentum across the world, and India is not far behind. The Indian government is taking various steps to promote the use of green hydrogen, and the latest developments are as follows:
- The Rajya Sabha passed the Energy Conservation (Amendment) Bill, 2022, aimed at encouraging use of green hydrogen and renewable energy and promoting carbon trading. The bill was passed by the Lok Sabha in August.
- India’s largest oil refining company, Indian Oil Corporation, has recently announced that it will set up a green hydrogen plant in its refinery in Mathura. The plant will have a capacity of 100 megawatts, and it will produce green hydrogen.
- From a legal perspective, the Indian government has taken various initiatives to promote the use of green hydrogen. In August 2021, the Ministry of New and Renewable Energy (MNRE) issued guidelines for the implementation of the Production-Linked Incentive (PLI) Scheme for Green Hydrogen. Under this scheme, financial incentives will be provided to manufacturers of green hydrogen for a period of five years to boost domestic production and reduce import dependence.
- Furthermore, it has been announced by the government that the Green Hydrogen Auction Scheme will be launched to encourage the development of green hydrogen projects. This scheme aims to promote the use of green hydrogen in various sectors such as transportation, industry, and power generation. An update regarding the same has been received about the beginning of quarterly auction for the green hydrogen projects.
- From a technical perspective, various companies and organizations in India have been investing in green hydrogen technology. For instance, Indian Oil Corporation Ltd. (IOCL) has partnered with Phinergy, a company that is based in Israel, to develop an aluminium-air battery system that can produce electricity using water and air. This technology can be used for various applications, including the production of green hydrogen.
- Another example is Tata Motors, which has collaborated with Tata Power to set up a solar-powered green hydrogen production plant. This plant will produce green hydrogen using electrolysis of water and renewable energy generated from solar panels.
Green hydrogen is gaining momentum globally as a clean and sustainable alternative to traditional hydrogen. The Indian government’s initiatives, such as the Green Hydrogen Mission and 2023 Budget Allocations, demonstrate its commitment to the development and adoption of green hydrogen in the country. The mission’s focus on developing a green hydrogen ecosystem and the budget allocation for the development of infrastructure and incentives for key sectors will create opportunities for businesses and investors in the sector. The promotion of green hydrogen will also contribute to India’s energy security, reduce its carbon footprint, and create a cleaner and sustainable future. However, it is expected that the Government will issue notifications and clarifications to rule out any ambiguity relating to the policies.
Author – Shyamli Shukla, Associate
Co-Author – Namanveer Singh Sodhi, Intern