Green Hydrogen: A Vital Resource for Achieving India’s Low-Carbon Growth

Riya Bhandari, April 10, 2023

The pace of India’s clean energy transition has accelerated with the announcement of India’s short and long-term climate goals at the Conference of Parties (COP)-26 in Glasgow. The 500 GW target of non-fossil installed capacity, reduction of emission intensity by 45% by 2030, and schemes such as Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, Production-linked Incentives (PLI), show that there is a strong push for fulfilling these commitments. Promoting initiatives such as solar, wind, batteries, and energy efficiency have bought momentum in reducing emissions from power, buildings, and transport sectors.

However, achieving low-carbon growth in hard-to-abate sectors such as refineries, fertilisers, iron, steel, and heavy-duty trucking is still a distant dream with the current low-carbon technologies. Various scientific research has shown that Green hydrogen can play a major role in the hard-to-abate sectors to achieve carbon neutrality and make India an energy-independent economy. Adoption of green hydrogen can enable India to abate 3.6 gigatons of CO2 emissions cumulatively between now and 2050 [1].

Hydrogen is the simplest and most abundant element on Earth but it is not found naturally. It can be produced from diverse resources, based on which there are numerous terminologies given to the type of hydrogen produced. Hydrogen production using coal, gas, clean energy source, and coal/gas with carbon capture and utilization (CCUS) is known as brown, grey, green, and blue hydrogen respectively. Further, there are varied other types of hydrogen-like pink, turquoise, black, etc. based on its source of development.

India’s Hydrogen Evolution

India’s hydrogen journey started in 2003 with the formation of the National Hydrogen Energy Board under the Ministry of New and Renewable Energy (MNRE). In 2006, MNRE laid out the National Hydrogen Energy Roadmap which identified transport and power sectors as key for green hydrogen application[2]. Currently, India produces grey hydrogen (about 6 million tonnes) using the steam methane reforming (SMR) method, largely consumed by fertilizers and refineries industries for ammonia production and fuel desulphurization.

Honorable Prime Minister Shri Narender Modi announced the National Hydrogen mission on India’s 75th Independence Day to make India the world’s largest hydrogen hub. This is geared to make India’s energy independent before the country completes 100 years of its independence in 2047. The draft mission focused on five key pillars such as research and development, demand creation, hydrogen usage in industry, creating an ecosystem for green hydrogen, and bringing the industry on board with international partnerships.

After this announcement, the Ministry of Power (MOP) disclosed the first part of the Green Hydrogen Policy on  February 17, 2022. The policy largely aims at easing hydrogen manufacturing by waiving inter-state transmission charges for 25 years, providing access to power markets, banking unconsumed renewable energy for 30 days for green hydrogen production, setting up manufacturing zones, allowance of green hydrogen storage in bunkers near ports for exports and counting of renewable energy consumed in the production towards RPO compliance. MNRE will also plans to set up a single portal for all statutory clearances and permissions required for the manufacture, transportation, storage, and distribution of green hydrogen[3]. The first phase of the hydrogen policy primarily focuses on renewable energy procurement, hydrogen production, storage, and distribution.

In January 2023, The Union Cabinet approved the National Green Hydrogen Mission with an initial outlay of Rs 19,744 crores, including Rs 17,490 crore for the SIGHT[4] programme, Rs 1,466 crore for pilot projects, Rs 400 crore for R&D, and Rs 388 crore towards other Mission components. The Mission envisages the following outcomes by 2030:

  • Development of green hydrogen production capacity of at least 5 million metric tonne per annum with an associated renewable energy capacity addition of about 125 GW,
  • Over Rs Eight lakh crores in total investments
  • Creation of six lakh jobs
  • Cumulative reduction in fossil imports over Rs one lakh crore
  • Abatement of nearly 50 million metric tonne of annual GHG emissions

The Government of India is strongly pushing for mainstreaming the production and usage of green hydrogen. Through a phased manner, the mission will enable the activities like regulations, standards, and pilot projects while also initiating the demand and deployment.

Challenges and Possible Solutions to Upscale Green Hydrogen

There are significant bottlenecks that can come in the way of hydrogen transition such as high technology costs, supply chain complexity, absence of policy and regulations, infrastructure, etc. To address these issues, several efforts such as designing the right policy levers to support its planning and operationalizing, participation of private players, etc., are essential. The required efforts to address the challenges of upscaling green hydrogen are explained below:

Attracting Investment Opportunities

The cost of production to the end-use of hydrogen requires huge infrastructure investment. Presently, electrolzer technology is mainly used for green hydrogen production, which is dominated by alkaline and polymer electrolyte membranes (PEM). India’s electrolyzer manufacturing ecosystem is at a very nascent stage and as per KPMG estimates, current grey hydrogen costs are about INR 160-200/kg while green hydrogen costs around INR 320-330/kg. Therefore, there is a need to take crucial steps like production-linked incentives, demand creation, storage, etc. which will attract public as well as private investments. As per various modelling studies, green hydrogen costs will potentially fall to INR 160-179/kg coming at cost parity with grey hydrogen by 2030[5].

Promoting Technological Innovation

Hydrogen due to its low density needs a larger space storage tank equivalent to three times the size used for methane and ten times the size used for petrol[6]. Transportation of hydrogen is another challenge due to its high flammability. Therefore, innovation is required such as repurposing existing gas pipelines with an opportunity to blend them with natural gas, robust storage tanks, etc. which is highly dependent on accelerated demand creation.

Enabling Demand and Supply Creation

Scaling up the green hydrogen developments in the country requires huge market shifts to meet the expected price reduction and its mass-scale production. There is a need to develop near-term and long-term policy pathways for providing demand incentives and promoting research & development on domestic manufacturing of electrolyzers.

The right policy push on both the demand and supply side, effective public-private partnerships increased financing interest from investors and enhanced industrial action towards the adoption of green hydrogen with the revised regulations for its production, can lead to low-carbon growth of the country of being a prominent player in hydrogen transition.


[1] Harnessing Green Hydrogen – RMI

[2] “National Hydrogen Energy Road Map: Pathway for Transition to Hydrogen Energy for India”, National Hydrogen Energy Board, Ministry of New and Renewable Energy, Government of India, 2006

[3] Green_Hydrogen_Policy.pdf (

[4] Strategic Interventions for Green Hydrogen Transition (SIGHT) include a comprehensive incentive programme to facilitate the Green Hydrogen industry value chain in the country. At this stage, there are two financial incentive mechanisms for supporting the domestic manufacturing of electrolysers and production of green hydrogen.

[5] India’s Green Hydrogen Ambition – Setting the wheels in motion (


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