The Union cabinet on Wednesday has approved a Rs 19,744-crore incentive plan to manufacture green hydrogen to cut emmissions.
India aims to produce 5 million tonnes (mt) of green hydrogen per annum in the next five years and the incentives would help bring down the cost.
Hydrogen, made by splitting water with an electrical process called electrolysis, can be used as a fuel. If the electrolysers are powered by renewable energy, the product is called green hydrogen. Information and broadcasting minister Anurag Thakur said India plans to build electrolyser capacity of 60-100 gigawatts to help produce green hydrogen.
The incentive by the government aims to make green hydrogen affordable and bring down its production cost, currently at Rs 300 to Rs 400 per kg, according to industry sources. Fertiliser, refining and iron and steel units currently consume grey hydrogen, made through fossil fuels, of 5 million tonnes per annum, according to industry sources.
Grey hydrogen costs around Rs 200 per kg to produce, sources added, as gas costs have pushed the prices from Rs 130 per kg. To promote the use of green hydrogen, Thakur said obligations — such as mandatory targets for green hydrogen consumption — would be required of fertiliser units, petroleum refineries and city gas distribution networks.
The ministry of new and renewable energy will formulate the scheme guidelines for implementation. The initial outlay for the mission will be Rs 19,744 crore, including an outlay of Rs 17,490 crore for the strategic Interventions for the green hydrogen transition (SIGHT) programme, Rs 1,466 crore for pilot projects, Rs 400 crore for R&D and Rs 388 crore towards other mission components.
Reliance Industries, Indian Oil, NTPC, Adani Enterprises, JSW Energy and Acme Solar have big plans on green hydrogen. Rajat Seksaria, chief executive officer of ACME Group, said: “The incentive programme 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.”
With inputs from agencies
