The Union Cabinet has approved the National Green Hydrogen Mission to facilitate demand creation, production, utilization, and export of green hydrogen with an initial outlay of ₹197.44 billion (~$2.3 billion).

The largest portion of the funding — ₹174.9 billion (~$2.1 billion) — is earmarked for the Strategic Interventions for Green Hydrogen Transition Programme (SIGHT) program.

The rest of the outlay has been divided among other initiatives including ₹14.66 billion (~$177 million) for pilot projects, ₹4 billion (~$48.3 million) for research and development, and ₹3.88 billion (~$46.8million) towards other mission components.

Under the SIGHT program, separate financial incentives for the domestic manufacturing of electrolyzers and the production of green hydrogen would be provided, the government said in a statement.

The mission seeks to promote the development of green hydrogen production capacity of 5 million tons per year with an associated renewable energy capacity addition of about 125 GW in the country by 2030. To achieve this, 60 – 100 GW of electrolyzer capacity will be established.

The mission envisages an investment of over ₹8 trillion (~$96.5 billion) and the creation of over 600,000 jobs by 2030.

It is expected to result in the cumulative reduction in fossil fuel imports of over ₹1 trillion (~$12.07 billion) and the abatement of nearly 50 million tons of annual greenhouse gas emissions by 2030.

Implementation of the mission

The Ministry of New and Renewable Energy (MNRE) will be responsible for the overall implementation of the mission and will formulate the guidelines of the respective components.

“India aims to become the global hub of production and exportation of green hydrogen. Within the power sector this will make the country self-reliant and go in tune with the vision of Aatmanirbhar Bharat and become an inspiration for the clean energy transition globally,” Union Minister Anurag Thakur said while briefing about the Cabinet’s decisions.

The minister added that the pilot projects would be introduced to identify industries such as refining, steel, shipping, and long-range mobility where green hydrogen can be put into use.

Regions capable of supporting large-scale production and/or utilization of hydrogen would be identified and developed as green hydrogen hubs.

The mission has proposed that the green hydrogen manufacturers and consumers would be brought under one roof to save on transportation costs and benefit from economies of scale.

Further, to encourage research and development, a public-private partnership framework would be put in place with support from a dedicated fund with contributors from the government, private sector and venture capital funds.

The minister said the mission would create export opportunities for green hydrogen and its derivatives, decarbonize industries, reduce dependence on imported fossil fuels and feedstock, and develop indigenous manufacturing capabilities.

Rajat Seksaria, CEO, of green energy provider ACME Group, told Mercom “The decision offers a great opportunity for India to become a global export hub of green hydrogen and ammonia. The incentive program makes the green molecule from India competitive. This is required for the initial few projects and to create green hydrogen hubs, which will allow supply chains to be established and scale production up.”

In July 2022, NITI Aayog prescribed ten steps to make India a global green hydrogen hub.