India’s Green Hydrogen Revolution: Insights from the Global Hydrogen Review 2024

Current Demand and Usage in India

• Hydrogen Demand: In 2023, India's hydrogen demand grew by over 5% year-on-year, driven primarily by the refining and steel sectors.
• Sectorial Breakdown: Refining leads with 43 Mt global hydrogen demand in 2023, and India’s steel sector, in particular, is expanding hydrogen use. However, this demand is nearly all met through hydrogen from unabated fossil fuels, underscoring the opportunity for low-emission hydrogen alternatives.

Policy Initiatives and Regulatory Framework

• National Hydrogen Mission: India’s goal under the Hydrogen Energy Mission includes installing 5 Mt of green hydrogen production annually by 2030, with targets emphasizing production for domestic use and international trade.
• Investment Support: To help bridge the cost gap, the Indian government plans to allocate subsidies for green hydrogen adoption, potentially influencing project costs by 30-50%. Additionally, India's participation in the Clean Energy Ministerial Hydrogen Initiative (CEM H2I) aligns its policies with international standards and certification processes.

Production Capacity and Project Pipeline

• Electrolyzer Capacity: India has announced 1.3 GW in electrolyzer projects, significantly contributing to the global total of 520 GW announced capacity for low-emission hydrogen by 2030.
• Annual Production Target: India aims to produce 5 Mt of green hydrogen per year by 2030, representing a considerable increase from today’s near-zero levels. The report suggests scaling production at a compound annual growth rate (CAGR) of 90% over the next six years to meet these ambitious targets.

Challenges in Scaling Green Hydrogen

• Cost Competitiveness: The production cost of low-emission hydrogen is estimated at $2-9 per kg by 2030, roughly 50% lower than current costs. This remains higher than fossil-based hydrogen, which is produced at $1-3 per kg today, making subsidies essential to bridge this cost gap.
• Infrastructure Investment: The article estimates that achieving India’s hydrogen potential will require $10-15 billion in infrastructure investments, including pipelines, storage, and refueling stations. As of 2024, only $100 billion in hydrogen infrastructure investment has been committed globally, highlighting a funding gap for India and other emerging economies.

Demand Creation and Industrial Hubs

• Demand Growth: India’s current policy landscape could drive demand for low-emission hydrogen to 6 Mtpa by 2030, although the Net Zero Emissions by 2050 Scenario (NZE Scenario) calls for 65 Mtpa in global demand by 2030.
• Offtake Agreements: Indian corporations are increasingly engaging in offtake agreements. For example, the Solar Energy Corporation of India (SECI) has initiated a 750 ktpa green ammonia tender, equivalent to 135 ktpa of hydrogen, for a 10-year supply to select fertiliser production sites.

Future Potential and Export Opportunities

• Cost-Effective Production: Given India’s solar resources, green hydrogen production costs could drop significantly. The report notes that with 520 GW in global electrolyzer capacity by 2030, India could emerge as a top exporter, particularly in hydrogen-based ammonia.
• Export Potential: By 2030, India’s exports could reach 1 Mtpa, depending on cost reductions and alignment with international certification standards. India has also announced a 10-year subsidy plan to encourage export partnerships, primarily targeting Europe and Southeast Asia.

Recommendations for Green Hydrogen Scale-Up in India

• Incentivize Demand: India should strengthen demand-side policies, aiming for 10 Mt annual demand by 2035 through quotas and contracts for difference, similar to EU and German models.
• Infrastructure Development: Initial infrastructure investment could focus on repurposing existing 10,000 km of gas pipelines, reducing upfront costs.
• Public-Private Collaboration: Utilizing public-private partnerships could reduce project risk by 20-30% and attract additional private capital to scale hydrogen production quickly.

India has the potential to become a global leader in green hydrogen, leveraging its vast renewable energy resources and ambitious national targets. However, achieving this will require coordinated efforts across policy, infrastructure, and industry. The cost gap between green and fossil-based hydrogen must be bridged through effective subsidies and financial incentives. Moreover, infrastructure development, especially pipelines and storage, is critical to enabling hydrogen trade both domestically and internationally.

India’s current focus on industrial hubs and offtake agreements is a positive step, but it will need to significantly scale up production and consumption to meet its targets. The commitment of 5 Mt of green hydrogen production by 2030 is achievable if the government ensures a conducive regulatory environment and supports private-sector investment.

In the long term, India must also focus on building strong export partnerships, especially in regions like Europe and Southeast Asia, where demand for low-carbon hydrogen is rising. With the right investments and policies, India can not only meet its decarbonization goals but also emerge as a significant player in the global green hydrogen economy.

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