Overview of Green Hydrogen in India – Use Cases & Policy Initiatives

Green hydrogen is emerging as a vital component in India’s clean energy transition. As a versatile and clean energy carrier, it holds the potential to decarbonize hard-to-abate sectors like steel, fertilizers, oil refining, heavy transport, and power generation.

Produced using renewable energy sources, green hydrogen supports India’s vision of energy independence and a net-zero future. This article discusses various efforts from the government as well as the industry to explore green hydrogen and its applications in India.

What is green hydrogen?

Green hydrogen is a clean fuel produced by splitting the water molecule (H₂O) into hydrogen and oxygen through electrolysis, utilizing renewable energy sources like solar, wind, or hydropower. This process emits no carbon, making it significantly cleaner than conventional hydrogen production methods (like steam methane reforming). Biomass gasification also offers a low-carbon pathway for producing green hydrogen.

Global & Indian perspective

Globally, green hydrogen is gaining momentum as countries aim for net-zero emissions:

• European Union: Aims to produce 10 million tonnes of green hydrogen annually by 2030 under the REPowerEU plan; nearly €1 billion awarded for 15 projects in 2024 via the European Hydrogen Bank.

• United States: Offers production tax credits up to $3.00/kg and 30% investment tax credits through the Inflation Reduction Act (IRA).

• Australia & Japan: Investing in hydrogen infrastructure and export capabilities.

Against this global backdrop, India aims for energy independence by 2047 and net-zero emissions by 2070, with green hydrogen playing a pivotal role. Launched on January 4, 2023, the National Green Hydrogen Mission (NGHM) targets 5 million metric tonnes of annual production by 2030, supported by an investment of ₹19,744 crore. Leveraging its renewable energy potential, India seeks to decarbonize key sectors, reduce fossil fuel imports, enhance energy security, and foster economic growth. 

In November 2024, the Ministry of New and Renewable Energy (MNRE) launched guidelines for pilot projects under the NGHM to promote green hydrogen use in residential, commercial, and decentralized areas. This initiative supports innovative production methods and applications for cooking, heating, and off-grid power, with a budget of ₹200 crore until 2025-26. These efforts reinforce India’s strategy to test feasibility, ensure safety, and scale adoption.

NGHM objectives & targets

The NGHM aspires to achieve the following by 2030:

• Production Capacity: Develop at least 5 million metric tonnes (MMT) of green hydrogen annually.

• Renewable Energy Addition: Integrate approximately 125 GW of renewable energy capacity dedicated to green hydrogen production.

• Investment Mobilization: Attract investments exceeding ₹8 lakh crore (~$96 billion).

• Employment Generation: Create over 600,000 jobs across the green hydrogen value chain.

• Import Reduction: Achieve a cumulative reduction in fossil fuel imports worth over ₹1 lakh crore (~$12 billion).

• Emission Abatement: Reduce nearly 50 MMT of annual greenhouse gas emissions.

Financial outlay & incentive mechanisms

The mission has a total outlay of ₹19,744 crore (~$2.3 billion), allocated as follows:

Component	Purpose	Allocation
Strategic Interventions for Green Hydrogen Transition	Incentives for electrolyzer manufacturing and hydrogen production	₹17,490 crore
Pilot Projects	Sector-specific demonstration projects (steel, mobility, shipping)	₹1,466 crore
Green Hydrogen Hubs & Other Components	Develop regional hydrogen hubs	₹388 crore
Research & Development	Foster innovation and safety	₹400 crore

Sectoral applications & pilot initiatives

Green hydrogen is being tested and scaled across multiple sectors through pilot projects and industrial partnerships. These initiatives are critical for demonstrating commercial viability, building supply chains, and accelerating market adoption across hard-to-abate industries.

1.  Industrial Decarbonization

• Steel Sector: Pilot projects aim to utilize green hydrogen in steel production to reduce carbon emissions. On February 2, 2024, the Government of India issued guidelines for pilot projects to integrate green hydrogen into steel production, focusing on Direct Reduced Iron (DRI) making and blast furnace operations. This scheme has a budgetary outlay of ₹455 crore until FY 2029-30.

In October 2024, three such projects were approved under the NGHM, with a financial outlay of ₹347 crore, expected to be commissioned within three years:

Project Proponent	Consortium Partners	Project Type	Hydrogen Production Capacity (ton-per-day)	Objective of pilot
Steel Authority of India Ltd (SAIL) (Ranchi)	NA	Hydrogen injection in blast furnaces to reduce coke/coal consumption	3,200	Large-scale pilot for hydrogen injection in blast furnaces
Matrix Gas & Renewables Ltd	Gensol Engineering Ltd, IIT Bhubaneswar, Metsol AB (Sweden)	Direct Reduced Iron (DRI) production using 100% hydrogen in vertical shaft	50	Demonstrate hydrogen DRI production
Simplex Castings Ltd	BSBK Pvt. Ltd., Ten Eight Investment, IIT Bhilai	Direct Reduced Iron (DRI) production using 100% hydrogen	40	Green hydrogen-based DRI production

• Ammonia Production: Green hydrogen also serves as a key input for green ammonia production, which is emerging as a viable energy carrier and industrial feedstock. In a notable development, Coal India Limited (CIL) and AM Green have signed a deal to supply 4,500 MW of renewable energy for green ammonia production, targeting 5 MTPA by 2030.

2. Transportation

Green hydrogen is expected to contribute to clean transport in India by reducing emissions and enhancing energy security.

Use Case	Impact on Clean Transport	Pilot initiatives
Heavy-Duty Transportation	Enables zero-emission trucks and buses where batteries are less effective	– Indian Oil’s hydrogen-powered buses in Delhi (link) – Chhattisgarh has introduced India’s first hydrogen-powered fuel cell trucks, aiming to replace diesel vehicles and reduce emissions. (link)
Green Shipping	Decarbonizes maritime transport using hydrogen/ ammonia as marine fuel	Green Tug Transition Programme – hydrogen tugs at Indian ports by 2025 (more details after the table)
Hydrogen Fuel Cell Electric Vehicles	Provides long-range, fast-refueling transport option ideal for fleets	Toyota Mirai hydrogen powered car pilot with Indian Oil. (link)
Railway Electrification	Clean energy alternative for non-electrified railway routes	Indian Railways exploring hydrogen powered trains by 2030. (link, link)

With respect to Green Shipping, India is accelerating its green maritime transition, aiming to shift all coastal and inland shipping to renewable energy, including hydrogen-powered vessels, within five years. Initiatives include the Green Tug Transition Programme (GTTP), Harit Nauka, and development of hydrogen hubs at major ports by 2030. The recently inaugurated National Centre of Excellence in Green Port & Shipping (NCoEGPS) in Gurugram supports innovation and regulation in this sector. India targets a 30% reduction in carbon emissions per ton of cargo by 2030 and is piloting the IMO’s Green Voyage 2050 project.

International collaborations & private sector engagement

Global partnerships and major corporate investments are playing a vital role in scaling green hydrogen production, innovation, and infrastructure in India.

• IndianOil has finalized the Levelized Cost of Hydrogen (LCoH) for setting up India’s largest green hydrogen project at its Panipat Refinery, with a capacity of 10,000 tonnes per annum. Scheduled for commissioning by December 2027, the project will replace fossil-based hydrogen in refinery operations, significantly cutting carbon emissions.

(The Levelized Cost of Hydrogen or LCoH is the average cost to produce one kilogram of hydrogen over a plant’s lifetime, factoring in capital, operating, and energy costs. It helps assess the long-term cost-effectiveness of hydrogen production methods, such as green hydrogen)

• BPCL & Sembcorp JV: Bharat Petroleum Corporation Limited (BPCL) and Singapore-based Sembcorp have formed a joint venture to develop green hydrogen and renewable energy projects in India. The partnership will also explore green ammonia, port decarbonization, and bunkering solutions. This aligns with India’s goal of 500 GW clean energy capacity and 5 million tonnes of green hydrogen production by 2030. Sembcorp currently operates 5.8 GW of renewable assets in India.

• Adani Group: Plans to invest $70 billion in renewable energy, aiming to become the world’s largest renewable energy company and produce the cheapest hydrogen globally.

Policy Framework & Support Mechanisms

Effective policy and regulatory frameworks are essential to enable market creation and long-term adoption of green hydrogen, including proposed demand mandates and infrastructure development under the National Green Hydrogen Mission.

• Hydrogen Purchase Obligations (HPOs): Domestic hydrogen manufacturers have urged the government to implement HPOs to ensure demand and prevent asset stranding.

• Infrastructure Development: The mission supports the development of supply chains for efficient hydrogen transport and distribution, including pipelines and storage facilities.

Conclusion

The National Green Hydrogen Mission establishes a framework for significant green hydrogen production and deployment by 2030, targeting reduced fossil fuel imports and emissions. Backed by a substantial financial outlay and specific incentives, the mission supports pilot projects in key sectors like steel and transportation. With ongoing government initiatives, private sector investments, and international collaborations, India aims to leverage its renewable energy potential to position itself as a global green hydrogen hub, contributing to energy security and decarbonization goals.

Source links:

• https://nghm.mnre.gov.in

• https://indoen.com/Stories/StoryDetails/indias-green-hydrogen-mission-powering-a-sustainable-future

• https://cdnbbsr.s3waas.gov.in/s3716e1b8c6cd17b771da77391355749f3/uploads/2023/01/2023012338.pdf

• https://www.pib.gov.in/PressReleasePage.aspx?PRID=2105085

• https://ficci.in/press_release_details/4865

• https://energy.economictimes.indiatimes.com/news/renewable/india-aims-for-green-shipping-targets-all-coastal-and-inland-vessels-for-renewable-energy-by-2029/108315086

Also read: Building Green Hydrogen ecosystem