In a bid to cut emissions and become a major export player in the field, India is planning a $2 billion incentive programme for the green hydrogen industry, sources close to the government said on Tuesday.
Two of the sources, a senior government official and an industry manager working in renewable energy said the 180-billion-rupee ($2.2 billion) incentive aims to reduce the production cost of green hydrogen by a fifth over the next five years, and the government would do this in part by increasing the scale of the industry.
The United States and the European Union have already approved incentives worth billions of dollars for green hydrogen projects which is a fuel free of greenhouse emissions as hydrogen can be used as a fuel by splitting water with an electrical process known as electrolysis.
When the devices do that, electrolysers, are powered by renewable energy, the product is called green hydrogen.
Read also: NCAA cautions local operators on safety as bad weather disrupts flights globally
The Indian aid could be announced in the Feb. 1 budget for the fiscal year beginning April 1, said the government official.
Indian companies such as Reliance Industries (RELI.NS), Indian Oil (IOC.NS), NTPC (NTPC.NS), Adani Enterprises (ADEL.NS), JSW Energy (JSWE.NS) and Acme Solar (ACMO.NS) have big plans on green hydrogen.
Already, Adani, led by the world’s third-richest person, Gautam Adani, had said in June that it and France’s TotalEnergies (TTEF.PA) would jointly create the “world’s largest green hydrogen ecosystem”.
Sources also said the Indian government expects industry to invest 8 trillion rupees in green hydrogen and its derivative green ammonia which is made by combining nitrogen with hydrogen using renewable energy sources and can be used by the fertiliser industry or as a fuel or convenient means of transporting hydrogen, by 2030.
The green hydrogen proposal is likely to be called “Strategic Intervention for Green Hydrogen Transition (SIGHT)” and will be split into 45 billion rupees for electrolyser manufacturing for five years and the 135 billion rupees for green hydrogen and green ammonia production for three years, the manager and second official said.
The incentive for making green hydrogen is likely to be 50 rupees per kg for three years, the sources said.
India aims to sell 70% of the production to countries such as South Korea, Japan and in the European Union, an industry official said, adding that derivatives, including green ammonia, had an equally strong demand.
The government is estimating global demand for green hydrogen will exceed 100 million tonnes by 2030, from just under 75 million tonnes now, according to other industry sources.
In February the government announced plans for India to make 5 million tonnes of green hydrogen annually by 2030, a figure that the first government official said could be doubled, depending on international demand.
Story was adapted from Reuters.
