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India relies on green hydrogen to reduce CO2 emissions

India is launching a $2 billion program to encourage green hydrogen fuel producers, offering incentives of at least 10% of production costs to companies using renewable energy. This program aims to reduce carbon dioxide emissions and make India a major exporter in the green hydrogen sector.

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India has announced plans to launch a $2 billion program by the end of June to encourage green hydrogen fuel producers.

India pledges to become a major exporter of green hydrogen with a Rs. 130 billion incentive plan

The government will offer incentives of at least 10% of their costs to companies producing green hydrogen from renewable energy rather than fossil fuels. This initiative is part of India’s commitment to reduce carbon dioxide emissions and become a major exporter in the green hydrogen sector.

The cost of manufacturing green hydrogen in India is currently about Rs. 300 per kg. The government plans to offer incentives of at least 30 Indian rupees per kg for the production of green hydrogen fuel. Incentives will be awarded through a competitive auction process, and the amount of incentives will gradually decrease each year. The government plans to support approximately 3.6 million tons of hydrogen production capacity over the next three years under this program.

Of the total incentive package for the sector, about 130 billion rupees will be allocated for green hydrogen production, with the remainder going to the manufacture of electrolyzers, which are used to separate hydrogen and oxygen molecules using electricity. The government will invite bids in three tranches for green hydrogen supply and two tranches for electrolyzers, each tranche for electrolyzer manufacturing with a probable capacity of 1,500 megawatts (MW). The incentive for electrolysers will be set at Rs. 4,440 per kilowatt.

India creates opportunities for renewable energy and hydrogen companies

The auction for the supply of green hydrogen should be open to companies with renewable energy plants or producing hydrogen and ammonia. Companies seeking the lowest incentives will be awarded the contracts, according to a government official involved in the discussions.

Indian companies such as Reliance Industries, Indian Oil, NTPC, Adani Enterprises, JSW Energy, ReNew Power and Acme Solar that have already announced plans for green hydrogen are expected to be interested in the contracts. The government hopes that this program will help absorb new technologies, achieve cost reductions while helping India reach its goal of achieving net zero carbon emissions by 2070.

Overall, this program is a significant step towards reducing India’s dependence on fossil fuels and promoting the use of renewable energy.

By encouraging the production of green hydrogen, the government is not only promoting renewable energy, but also creating opportunities for green hydrogen companies.

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