Mandatory green hydrogen plan may go to cabinet soon

NEW DELHI : Industries such as refineries and fertilizer makers may soon have to follow a green hydrogen consumption mandate, with the ministry of new and renewable energy (MNRE) set to approach the union cabinet with a proposal.

Addressing the BloombergNEF Summit here, minister for new and renewable energy R.K. Singh said talks are still underway on the green hydrogen consumption mandate level, which is yet to be decided.

“We amended the Energy Conservation Act, which gives power to government to lay down mandates for changing the feedstock from fossil to non-fossil. So I can mandate fertilizer, petroleum etc. for instance. I can ask fertilizers and petroleum (refineries) that you are using grey hydrogen or grey ammonia and a certain percentage of that has to be green from this year onwards, gradually escalating it so that 100% of that is green," Singh said.

“We have had discussions with the concerned ministries on this. Basically, that mandate fixing is in process. By and large, we have had the discussions and we have come up with some figures, and we will go to the cabinet soon."

The plan to boost demand for green hydrogen comes a couple of months after the ministry rolled out incentive schemes worth ₹ 17,000 crore for production of green hydrogen and manufacturing electrolyzers.

The mandate was expected to be announced with the rollout of the green hydrogen mission, but was delayed amid disagreements over the mandate level.

The minister said that manufacturing capacity of 5.8 million tonne green hydrogen is already in different stages of installation and that the “low cost" of renewable energy in India would lead to production of the cheapest green hydrogen globally.

Recently, the ministry rolled out the standard for green hydrogen produced in the country.

The government has mandated that manufacturing units cannot emit more than 2 kg of carbon dioxide per kg of hydrogen.

Earlier this year, the union cabinet approved the National Green Hydrogen Mission with an aim to produce 5 million tonne green hydrogen annually and make India a global green hydrogen hub.

In June, the government notified the Strategic Interventions for Green Hydrogen Transition Programme (SIGHT), under which ₹13,050 crore would go for incentivizing production of green hydrogen, and another ₹4,440 crore would go for electrolyzer production.

In January, the union cabinet approved the National Green Hydrogen Mission, allocating ₹19,744 crore. Apart from the SIGHT scheme to support production of electrolyzers and green hydrogen, government would allocate ₹ 1,466 crore for pilot projects, ₹400 crore for research and development, and ₹388 crore for other mission components.

Under the ambitious green hydrogen mission, Centre aims to make India a global hub for production, usage and export of green hydrogen and its derivatives.The government aims to take India’s green hydrogen capacity to 5 million metric tonne per annum, with an associated renewable energy capacity addition of about 125 GW.

Green hydrogen would be used in a number of sectors including petroleum refineries, fertilizer and steel makers, which are called “hard-to-abate" sectors in terms of carbon emission. The use of green hydrogen gains significance as several export oriented industries including steel are preparing to avoid the disruption which may be caused with the implementation of Carbon Border Adjustment Mechanism (CBAM).

India is already exploring tariff and non-tariff measures to counter EUs Carbon Border Adjustment Mechanism (CBAM) that proposes to put tax on embedded carbon imports from various sectors, including steel, aluminium, cement, hydrogen, electricity, and fertiliser from January 1, 2026. Starting October, companies would have to submit carbon emission details of their exports to EU.