India’s $2 Billion Investment in Green Hydrogen: A Major Step towards Sustainability
India is planning a $2 billion incentive program for the green hydrogen industry. The 180 billion rupees ($2.2 billion) initiative aims to reduce the production cost of green hydrogen by 20% over the next five years through an increase in the industry’s scale. Green hydrogen is made through electrolysis powered by renewable energy and is a fuel with no greenhouse gas emissions. The current cost of green hydrogen production in India is 300 to 400 rupees per kg. The United States and the European Union have already approved incentives worth billions of dollars for green hydrogen projects.
The Indian aid could be announced in the February 1 budget for the fiscal year beginning April 1, according to a senior government official and an industry manager working in renewable energy. The program, called “Strategic Intervention for Green Hydrogen Transition (SIGHT),” will be split into 45 billion rupees for electrolyzer manufacturing for five years and 135 billion rupees for green hydrogen and green ammonia production for three years. The incentive for green hydrogen production is expected to be 50 rupees per kg for three years.
Indian companies such as Reliance Industries, Indian Oil, NTPC, Adani Enterprises, JSW Energy, and Acme Solar have expressed interest in the green hydrogen industry. In June, Adani and France’s TotalEnergies announced plans to create the “world’s largest green hydrogen ecosystem.” The Indian government expects the industry to invest 8 trillion rupees in green hydrogen and its derivative, green ammonia, by 2030. Green ammonia is made by combining nitrogen with hydrogen using renewable energy sources and can be used by the fertiliser industry or as a fuel or convenient means of transporting hydrogen.
The government aims to sell 70% of the production to countries such as South Korea, Japan, and the European Union, according to an industry official. Derivatives of green hydrogen, including green ammonia, also have strong demand. The government estimates the global demand for green hydrogen will exceed 100 million tonnes by 2030, up from nearly 75 million tonnes currently. In February, the government announced plans for India to produce 5 million tonnes of green hydrogen annually by 2030, a figure that could potentially be doubled depending on international demand. The government also plans for the country to achieve an electrolyzer manufacturing capacity of 15 gigawatts in phases by 2030, almost 10 times the current global capacity.
U.S.-based Ohmium International has already commissioned India’s first green hydrogen factory in Bengaluru, and other companies including Reliance Industries, Larsen & Toubro, Greenko, and H2e Power have announced plans to build gigawatt-scale factories. Indian oil refineries and fertiliser and steel plants currently use 5 million tonnes of hydrogen made from natural gas, called grey hydrogen, each year. The production of grey hydrogen releases carbon dioxide and the cost has risen to around 200 rupees per kg due to higher gas prices.
The green hydrogen industry has the potential to significantly reduce emissions and contribute to a more sustainable energy future. The $2 billion incentive program in India is a major step towards the development and growth of the industry and will hopefully serve as a model for other countries to follow.
Prachi, an accomplished Chief-Editor at The Sustainable Brands Journal, has 15+ years of experience in Europe, the Middle East, and India, managing 90+ global sustainable brands. She’s a prolific writer in sustainability, contributing to various publications. Prachi’s unwavering passion and expertise make her a recognized authority, driving positive change and inspiring a sustainable future.
