Prime Minister Narendra Modi’s Cabinet approved a Rs 19,744 crore incentive plan on Wednesday to promote green hydrogen manufacturing in the country in order to reduce emissions.
Anurag Thakur, Minister of Information and Broadcasting, stated that the Cabinet approved the National Green Hydrogen Mission, which is expected to attract Rs 8 lakh crore in investment in the green hydrogen chain. In the next five years, India hopes to produce 5 million tonnes of green hydrogen, and the incentives will help bring the cost down.
“The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the National Green Hydrogen Mission,” Thakur said in a press conference following the Cabinet decisions.
Hydrogen As an Energy Source
Splitting water produces carbon-free hydrogen, which can be used as a fuel in automobiles and as an energy source in industries such as oil refineries and steel plants. Green hydrogen is produced when electricity generated from renewable sources such as the sun is used to split water via electrolysis. A byproduct of such a process is oxygen.
What Does the Mission Aim to Do?
- The mission’s initial budget will be Rs 19,744 crore, which includes Rs 17,490 crore for the SIGHT programme, Rs 1,466 crore for pilot projects, Rs 400 crore for R&D, and Rs 388 crore for other mission components.
- The scheme’s implementation guidelines will be developed by the Ministry of New and Renewable Energy (MNRE).
- The mission aims to promote the development of green hydrogen production capacity of at least 5 MMT (Million Metric Tonnes) per year in the country by 2030, with an associated renewable energy capacity addition of approximately 125 GW.
- It plans to invest over Rs 8 lakh crore and create over 6 lakh jobs by 2030.
- It will also result in a reduction of over Rs 1 lakh crore in fossil fuel imports and a reduction of nearly 50 MMT of annual greenhouse gas emissions by 2030.
How It Will Benefit
According to Rajat Seksaria, CEO of ACME Group, the move presents an excellent opportunity for India to become a global export hub for green hydrogen and ammonia.
“The incentive programme makes India’s green molecule competitive. This is required for the initial few projects that will create green hydrogen hubs, allowing supply chains to be established and production scale to increase.” Several countries have already established green hydrogen subsidy and support programmes. The United States recently announced a significant support plan for clean hydrogen through the Inflation Reduction Act. Germany, the United Kingdom, and Japan are also supporting clean hydrogen through state-sponsored programmes,” he told PTI.
According to an official statement, the Mission will have a wide range of benefits:
- creation of export opportunities for green hydrogen and its derivatives
- decarbonization of the industrial, mobility, and energy sectors
- reduction of reliance on imported fossil fuels and feedstock
- development of indigenous manufacturing capabilities
- creation of employment opportunities
- development of cutting-edge technologies
The Mission will make it easier to create demand for, produce, use, and export green hydrogen. Under the Strategic Interventions for Green Hydrogen Transition Programme (SIGHT), the Mission will provide two distinct financial incentive mechanisms aimed at domestic manufacturing of electrolysers and green hydrogen production.
In addition, the Mission will fund pilot projects in emerging end-use sectors and production pathways. Green Hydrogen Hubs will be identified and developed in regions capable of supporting large-scale hydrogen production and/or utilisation, according to the minister.
Policy Framework
To aid in the establishment of the green hydrogen ecosystem, an enabling policy framework will be developed. A solid framework of standards and regulations will also be developed.
The Mission will also facilitate a public-private partnership framework for R&D (Strategic Hydrogen Innovation Partnership – SHIP). To develop globally competitive technologies, R&D projects will be goal-oriented, time-bound, and appropriately scaled up. A coordinated skill development programme will be implemented as well.
All concerned ministries, departments, agencies, and institutions of the federal and state governments will take focused and coordinated actions to ensure the Mission’s success.
The Ministry of New and Renewable Energy will be in charge of the Mission’s overall coordination and implementation.
What Experts Have Said
“It will be a much-needed boost for the green hydrogen industry. This intervention is even more significant because it occurs during India’s G20 presidency, emphasising India’s commitment to leading the global energy transition.” According to him, Indian hydrogen demand is expected to more than fivefold to 28 MT by 2050, with tremendous opportunities for exports,” Vineet Mittal, Chairman of Avaada Group, told PTI.
This intervention, he believes, will assist Indian developers in meeting the demand and supplementing ongoing efforts to achieve the target of 500 GW of renewable energy by 2030 and net zero emissions by 2070.
Deloitte India’s Energy, Resources, and Industrials Partner Shubhranshu Patnaik told PTI, “The announcement of incentives under the National Hydrogen Mission Plan, combined with the magnitude of likely hydrogen demand in India, positions the country as one of the few attractive nations in the world for green hydrogen demand and production. It is an important policy step toward establishing India as a regional manufacturing and production hub for green hydrogen.”
According to Gautam Mohanka, Managing Director of Gautam Solar, given that India currently imports more than 80% of its oil needs, green hydrogen, along with solar and wind, could be the answer to the future, with this initial investment expected to reduce fossil fuel imports by more than Rs 1 trillion by 2050.
Green hydrogen production can rely on electricity generated by solar plants, which benefits the renewable sector, he says.
With inputs from PTI
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