The draft Punjab Green Hydrogen Policy, released by the Punjab Energy Development Agency (PEDA), targets achieving a 100 kilo tons per annum (KTPA) production capacity of green hydrogen and ammonia by 2030.

Per the draft, the existing incentives under the “Punjab Industrial and Business Development Policy 2022” will be extended to new green hydrogen and ammonia ventures and the expansion of existing units.

However, the exact benefits will depend on the project category, e.g., a large-scale project might get different incentives than a small-scale one.

The draft policy highlights the regulatory support available under the state’s “New & Renewable Sources of Energy Policy 2012,” including a full 100% exemption on electricity duty during the construction phase of projects.

It also proposes waiving the change of land use and external development charges for converting agricultural land for industrial purposes related to green hydrogen production. Additionally, it proposes a 100% exemption on stamp duty for land registration and lease transactions.

The draft policy also includes exemptions on energy-related charges to enhance the economic viability of green hydrogen production. Cross-subsidy and additional surcharge will not apply to green energy consumed in producing green hydrogen and ammonia.

The policy proposes concessions in contract demand charges for entities utilizing green energy and a 50% exemption on intra-state transmission and wheeling charges for the green energy used. It also proposes waiving the inter-state transmission charges levied by the Central Transmission Utility for 25 years for green hydrogen and ammonia manufacturers whose projects are commissioned before December 31, 2030.

Additionally, the policy incorporates the renewable purchase obligation (RPO) framework, allowing obligated entities to meet their RPO targets by purchasing green hydrogen or ammonia, with a mechanism for converting green hydrogen to MWh for RPO compliance.

It also states that the Punjab State Power Corporation (PSPCL) may procure and supply renewable energy to green hydrogen and ammonia manufacturers at tariffs determined by the Punjab State Electricity Regulatory Commission (PSERC).

Incentives such as a capital subsidy of up to ₹150 million (~$1.75 million) per project, capped at ₹30 million (~$350,000) ton per day (TPD) for biomass-to-green hydrogen projects with a maximum capacity of 5 TPD are among the incentives proposed. The incentives will be limited to the first 10 such projects.

The policy proposes a 20% capital subsidy, up to ₹5 million (~$58,350) per vehicle, for the initial 100 hydrogen-based fuel cell trucks and buses. It also includes a subsidy of ₹50 (~$0.58)/kg for the first 10 industries in Punjab that consume green hydrogen for five years. It offers a 20% capital cost subsidy, up to a maximum of ₹30 million (~$350,000), for the first 10 hydrogen refueling stations established in the state.

Recently, the Indian government launched five pilot projects under the National Green Hydrogen Mission to introduce hydrogen-fueled buses and trucks.

In October 2024, the government approved three pilot projects to use hydrogen in steel production under the National Green Hydrogen Mission.