India’s information minister on Wednesday said that the country has approved an incentive plan of 174.9 billion rupees ($2.11 billion) to promote green hydrogen in a bid to cut emissions and become a major exporter in the field.
As one of the world’s biggest greenhouse gas emitters, the move is targeted at helping India achieve its net-zero carbon emissions goal by 2070.
The minister, Anurag Thakur said India aims to produce 5 million tonnes of green hydrogen annually by 2030, thereby cutting about 50 million tonnes of carbon emissions and saving one trillion rupees on fossil fuel imports, adding that India aims to establish itself as a global hub of green hydrogen and will make efforts to get at least 10% of the global demand for green hydrogen by 2030.
According to industry sources, the incentive by the government aims to make green hydrogen affordable and bring down its production cost, currently at 300 rupees to 400 rupees per kg.
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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 200 rupees per kg to produce, sources added, as gas costs have pushed the prices from 130 rupees 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 government expects investments totalling 8 trillion Indian rupees ($96.65 billion) in the green hydrogen sector by 2030, Thakur said, adding that incentives will be given for the manufacturing of electrolysers and the production of green hydrogen.
In providing policy incentives for green hydrogen production, India is following the lead of many other countries such as China, the European Union and the United States. Energy analysts expect manufacturing costs for green hydrogen to fall significantly in the next few years and estimate the green hydrogen market will grow 20-fold to $80 billion by the year 2030.
The government’s incentive programme named the “Strategic Interventions for Green Hydrogen Transition Programme (SIGHT)”, will also need additional government spending of 14.66 billion rupees for pilot projects and about 8 billion rupees towards research and other expenses.
Story was adapted from Reuters.
