• India has committed to 50% electricity capacity from non-fossil sources by 2030. But an energy transition in industry is needed at the same time. Most industrial greenhouse gas emissions in India come from steel, cement, fertilizers and petrochemicals.
  • Green hydrogen holds the promise of fuelling industrial growth while simultaneously reducing industrial emissions. Splitting water into hydrogen and oxygen is energy-intensive. When this energy comes from renewable/non-fossil sources, we get green hydrogen.
  • It can serve as an energy source (heavy industry, long-distance mobility, aviation, and power storage) and an energy carrier (as green ammonia or blended with natural gas).
  • India is targeting at least five million tonnes of production by 2030, which is larger than that of any single economy.
  • This would create demand for 100-125 gigawatts (GW) of renewable energy, 60-100 GW of electrolysers, investment opportunity of ₹8 lakh crore, and cut 50 MMT of annual emissions.
  • With abundant sunshine and significant wind energy resources, India is geographically blessed to become one of the lowest-cost producers of green hydrogen.

Five priorities

  • For the vision to convert into reality, government and industry must act in sync along five priorities.
  • First, domestic demand is critical. If we are not a big player domestically, we cannot be a major player in the international market.
  • The mission introduces a Strategic Interventions for Green Hydrogen Transition (SIGHT) fund for five years, with ₹13,000 crore as direct support to consume green hydrogen.
  • This will encourage heavy industries to increase demand, offering economies of scale by which suppliers can reduce prices.
  • Blending mandates for refineries can be another demand trigger. Urea plants have been exempted. Over time, targets can be ratcheted up with blending mandates rising (including for urea fertilizers).
  • Another approach is to leverage government procurement. As the second-largest steel producer in the world, can India aspire to become the largest green steel producer
  • Costs of green steel, made from green hydrogen, are currently much higher, but could be reduced with economies of scale and changes in production technologies. A share of government procurement of steel could be nudged towards green steel. India could later position itself as a green steel exporter.
  • Second, India can be an attractive destination for domestic and foreign investment. Green hydrogen production projects announced/underway in India are far fewer compared to others.
  • Green hydrogen is difficult and expensive to transport. The mission envisions green hydrogen hubs to consolidate production, end use and exports. A mission secretariat can ensure project clearance is streamlined and reduce financial risks.
  • Third, the SIGHT fund offers ₹4,500 crore to support electrolyser manufacturing under the performance-linked incentive scheme. Currently, manufacturers are importing stacks and assembling them.
  • We must become more competitive — with targeted public funding — in manufacturing the most critical and high-value components of electrolysers in India. Not targeting value addition would result in electrolyser technologies and production again getting concentrated.
  • China could end up controlling 38% of electrolyser capacity by 2030. Electrolyser technology must be improved to achieve higher efficiency goals, specific application requirements, be able to use non-freshwater, and substitute critical minerals.
  • Fourth, establish bilateral partnerships to develop resilient supply chains. Globally, about 63 bilateral partnerships have emerged; Germany, South Korea and Japan have the most. Using yen- or euro-denominated loans for sales to Japan or to the EU, respectively, could reduce the cost of capital and help us become export competitive.
  • Many bilateral deals focus on import-export but few deal with technology transfer or investments.
  • India must cooperate with like-minded countries on trade, value chains, research and development, and standards.
  • The mission allocates ₹400 crore for R&D, which can be leveraged to crowd in private capital into technology co-development. Indian companies should consider joint projects in countries with good renewable energy resources and cheap finance.
  • Finally, India must coordinate with major economies to develop rules for a global green hydrogen economy.
  • In the absence of common global frameworks, attempts for rules and standards are being driven by collectives of private corporations rather than through structured intergovernmental processes.
  • There are already signs of conflicting regulations and protectionist measures in major markets. These put India’s ambitions at risk.
  • India’s G20 presidency is an opportunity to craft rules for a global green hydrogen economy. These rules must address operational threats, industrial competitiveness and strategic threats.
  • India should promote a global network on green hydrogen via which companies could collaborate. Green hydrogen will be a critical industrial fuel of the 21st century. India is well-positioned to show leadership — in our collective interest and that of the planet.


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