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India said to plan a $2 bn incentive for the green hydrogen industry

  • Published
    28th Dec, 2022
  • India is planning a $2 billion incentive programme for the green hydrogen industry, in a bid to cut emissions and become a major export player in the field.

Key Objective:

  • Reducing the production cost of green hydrogen by a fifth over the next five years.
    • The current cost in India is ?300 to ?400 per kg.
      • This will be done in part by increasing the scale of the industry.
      • The incentive for making green hydrogen is likely to be ?50 per kg for three years.

Strategic Intervention for Green Hydrogen Transition (SIGHT)

  • The green hydrogen proposal is likely to be called "Strategic Intervention for Green Hydrogen Transition (SIGHT)".
  • It will be split into Rs 45 billion for electrolyzer manufacturing for five years and
  • The Rs 135 billion for green hydrogen and green ammonia production for three years.

How is the west approaching it?

  • The United States and the European Union have already approved incentives worth billions of dollars for green hydrogen projects.

About Green Hydrogen:

  • Hydrogen can be used as fuel.
  • It is made by splitting water with an electrical process, electrolysis.
  • If the devices that do that - electrolyzers - are powered by renewable energy, the product is called green hydrogen, a fuel-free of greenhouse emissions.

Major Indian companies Involved

  • Reliance Industries, Indian Oil, NTPC, Adani Enterprises, JSW Energy, and Acme Solar have big plans for green hydrogen.
  • The Adani Group has partnered with France's TotalEnergies to create a green hydrogen ecosystem.

Green-hydrogen factories in India:

  • S.-based Ohmium International has commissioned India's first green-hydrogen factory in Bengaluru.
  • Reliance Industries, Larsen & Toubro, Greenko, and H2e Power last year announced plans to build gigawatt-scale factories.

Focus on Green ammonia

  • Projections:
  • Industry to invest ?8 trillion in green hydrogen and its derivative green ammonia by 2030.
  • Global demand for green hydrogen will exceed 100 million tonnes by 2030. Presently it is 75 million tonnes.

About Green Ammonia:

  • Green ammonia is made by combining nitrogen with hydrogen using renewable energy sources.
  • Green ammonia production is where the process of making ammonia that is 100% renewable and carbon-free.
  • It can be used by the fertilizer industry or as a fuel or convenient means of transporting hydrogen.


  • India aims to sell 70% of its production to countries such as South Korea, Japan, and the European Union.
  • To achieve an electrolyzer manufacturing capacity of 15 gigawatts in phases by 2030. That would be almost 10 times the current global capacity.
  • To make 5 million tonnes of green hydrogen annually by 2030.

Green Hydrogen Policy

  • Under the policy, the government is offering to set up manufacturing zones for production, connectivity to the ISTS (Inter-State Transmission System) on a priority basis, and free transmission for 25 years if the production facility is commissioned before June 2025.
  • Manufacturers of Green hydrogen and ammonia are allowed to purchase renewable power from the power exchange or set up Renewable Energy (RE) capacity themselves or through any other developer, anywhere.
  • It provides a facility for producers to bank any surplus renewable energy generated with discoms (power distribution companies) for up to 30 days and uses it as required.
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