Centre clears Rs 19,744-cr National Green Hydrogen Mission

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New Delhi: Prime Minister Narendra Modi-led Cabinet on Wednesday approved a Rs 19,744 crore incentive plan to promote the manufacturing of green hydrogen in the country in a bid to cut emissions.

Information and Broadcasting Minister Anurag Thakur said the Cabinet approved the National Green Hydrogen Mission which is expected to attract Rs 8 lakh crore of investment in the green hydrogen chain.

India aims to produce 5 million tonnes of green hydrogen per annum in the next five years and the incentives would help bring down the cost.

"The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved National Green Hydrogen Mission," Thakur said while briefing reporters about the Cabinet decisions.

Carbon-free hydrogen, which can be used as fuel in automobiles and as an energy source in industries such as oil refineries and steel plants, is produced by splitting water. When electricity generated from renewable sources such as the sun is used to split water through electrolysis, green hydrogen is produced. Oxygen is a by-product of such a process.

The initial outlay for the mission will be Rs 19,744 crore, including an outlay of 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 towards other mission components.

The Ministry of New and Renewable Energy (MNRE) will formulate the scheme guidelines for implementation.

The mission seeks to promote development of green hydrogen production capacity of at least 5 MMT (Million Metric Tonnes) per annum with an associated renewable energy capacity addition of about 125 GW in the country by 2030.

It envisages an investment of over Rs 8 lakh crore and creation of over 6 lakh jobs by 2030.

It will also result in cumulative reduction in fossil fuel imports of over Rs 1 lakh crore and abatement of nearly 50 MMT of annual greenhouse gas emissions by 2030.

Commenting on the move, Rajat Seksaria, CEO of ACME Group, said it offers a great opportunity for India to become a global export hub of green hydrogen and ammonia.

He further said "the incentive program makes the green molecule from India competitive. This is required for the initial few projects and create green hydrogen hubs, which will allow supply chains to be established and scale of production to increase." Several nations have already come up with green hydrogen subsidy and support programs. Recently, the US announced a big support plan for clean hydrogen through Inflation Reduction Act. Germany, UK and Japan are also providing support to clean hydrogen through state support programs, he added.

The Mission will have wide ranging benefits -- creation of export opportunities for green hydrogen and its derivatives; decarbonisation of industrial, mobility and energy sectors; reduction in dependence on imported fossil fuels and feedstock; development of indigenous manufacturing capabilities; creation of employment opportunities; and development of cutting-edge technologies, an official statement said.

The Mission will facilitate demand creation, production, utilisation and export of green hydrogen. Under the Strategic Interventions for Green Hydrogen Transition Programme (SIGHT), two distinct financial incentive mechanisms -- targeting domestic manufacturing of electrolysers and production of green hydrogen -- will be provided under the Mission.

The Mission will also support pilot projects in emerging end-use sectors and production pathways. Regions capable of supporting large scale production and/or utilisation of hydrogen will be identified and developed as Green Hydrogen Hubs, the minister added.

An enabling policy framework will be developed to support establishment of the green hydrogen ecosystem. A robust standards and regulations framework will be also developed.

Further, a public-private partnership framework for R&D (Strategic Hydrogen Innovation Partnership - SHIP) will be facilitated under the Mission. R&D projects will be goal-oriented, time bound, and suitably scaled up to develop globally competitive technologies. A coordinated skill development programme will also be undertaken.

All concerned ministries, departments, agencies and institutions of the central and state governments will undertake focussed and coordinated steps to ensure successful achievement of the Mission objectives.

The Ministry of New and Renewable Energy will be responsible for overall coordination and implementation of the Mission, he stated.

Avaada Group Chairman Vineet Mittal said, "It will provide a much-needed boost to encourage the green hydrogen industry. This intervention is even more significant because it comes at a time when India has the G20 presidency, clearly showcasing India's commitment to lead the global energy transition." Indian hydrogen demand is anticipated to see a five-fold jump to 28 MT by 2050, along with tremendous opportunities that exist for exports, he noted.

This intervention will help Indian developers cater to the requirement and augment the ongoing efforts to reach the target of 500 GW of renewable energy by 2030 and net zero emissions by 2070, he opined.

Shubhranshu Patnaik, Energy, Resources and Industrials Partner, Deloitte India said, "The announcement of incentives under the National Hydrogen Mission Plan, along with the scale of likely hydrogen demand in India, positions the country as one of the few attractive nations globally for green hydrogen demand and production. It is a crucial policy measure in establishing India as a regional manufacturing and production hub for green hydrogen." Gautam Mohanka, Managing Director, Gautam Solar, said given that India currently imports more than 80 per cent of its oil requirement, green hydrogen along with solar and wind could be the answer to the future, with this initial outlay being projected to curtail fossil fuel imports of over Rs 1 trillion by 2050.

The production of green hydrogen can rely on electricity generated by solar plants, and in a way, this is a boost to the renewable sector, he added.