The government is taking steps to reduce the manufacturing cost of green hydrogen in India, aiming to establish the country as a global hub for its production, usage, and export. The National Green Hydrogen Mission (NGHM) is a key initiative driving these efforts, with a target of achieving a green hydrogen production capacity of 5 million metric tonnes per annum by 2030, supported by an additional 125 GW in renewable energy capacity.
To incentivize cost-effective production, the government has introduced measures such as incentives for electrolyser manufacturing. Fifteen companies have been granted a total manufacturing capacity of 3,000 MW per annum under this scheme, with a total incentive amounting to Rs 4,440 crore. Electrolysers play a crucial role in green hydrogen production by facilitating the electrolysis process using renewable energy sources.
Moreover, under the incentive scheme for green hydrogen production, 18 companies have been allocated a combined production capacity of 8,62,000 tonnes per annum. Additionally, two companies have been awarded a total capacity of 20,000 tonnes per annum for the procurement of green hydrogen specifically for refineries. The government has also set prices for the production and supply of green ammonia to fertiliser units, emphasizing the integration of green hydrogen into industrial applications.
Various measures have been implemented to further reduce costs, including exemptions from Inter-State Transmission System (ISTS) charges for green hydrogen and green ammonia plants commissioned before December 31, 2030, that utilize renewable energy sources. Duty benefits have been extended for units installing renewable energy equipment exclusively for green hydrogen production, and the government is focusing on expanding low-cost renewable energy sources to optimize the energy mix for green hydrogen production.
In line with these efforts, exemptions from certain model approval requirements have been granted for renewable equipment in special economic zones or export-oriented units supplying power to green hydrogen plants. The government is also promoting 100% foreign direct investment under the automatic route to support the growth of green hydrogen production in India. These initiatives, coupled with the development of green energy corridors and transmission infrastructure, aim to drive affordable and scalable green hydrogen production, contributing to India’s clean energy transition and reducing reliance on fossil fuels.
