India’s green hydrogen mission: Powering a sustainable future

Posted on 11 Mar 2025

Synopsis:
India’s Green Hydrogen Mission is set to revolutionise its energy landscape by reducing carbon emissions and enhancing energy security. As the world’s third-largest energy consumer, India aims to cut its heavy reliance on fossil fuel imports, which reached $190 billion in 2024. The mission targets 5 million tonnes of green hydrogen production by 2030, leveraging India’s abundant solar and wind resources. Key challenges include high production costs, infrastructure development, and global competition. With strong policy support, corporate investments, and export opportunities, India is positioning itself as a global leader in green hydrogen, driving both sustainability and economic growth.

In the global race to achieve net-zero emissions, India stands at the threshold of a transformative clean energy revolution. Green hydrogen, a fuel produced through water electrolysis using renewable sources, has captured attention for its immense potential to cut carbon emissions and drive economic growth.

As a cleaner alternative to conventional grey hydrogen, green hydrogen releases no greenhouse gases during production, making it a key component of the world’s efforts to combat climate change.

Why green hydrogen is India’s game changer

India’s energy story is one of rapid growth and escalating demand. As the world’s third-largest energy consumer, India’s energy needs are expected to rise by 35% by 2030. The nation’s heavy reliance on imported fossil fuels has resulted in an energy import bill that touched $190 billion in 2024.

Simultaneously, India has pledged to achieve net-zero carbon emissions by 2070, adding urgency to the search for sustainable energy solutions. Green hydrogen, with its potential to decarbonise high-emission sectors, offers a pathway to achieving these twin goals of energy independence and environmental sustainability.

The green hydrogen production process uses renewable electricity to split water molecules into hydrogen and oxygen. Unlike grey hydrogen, which relies on carbon-emitting fossil fuels, this method is carbon-free. India’s abundant solar and wind resources can serve as a foundation for green hydrogen production, providing the country with an opportunity to become a global leader in this emerging sector. However, realising this vision will require overcoming substantial economic and logistical challenges.

Bridging the cost gap: The key challenge

One of the primary hurdles facing green hydrogen adoption in India is its cost. Producing green hydrogen currently costs between $4 and $5 per kilogram—about double the cost of grey hydrogen. Achieving cost parity is essential for mass adoption and will require reducing costs to around $2 per kilogram. Several factors drive these high costs, including the expense of round-the-clock (RTC) renewable energy needed for production and the high price of electrolyser technology.

According to a report Green Hydrogen: Enabling Measures Roadmap for Adoption in India, the key to making green hydrogen cost-competitive lies in rapidly expanding India’s renewable energy capacity and cutting down transmission and distribution (T&D) charges. Reducing the cost of electrolysers, which currently make up 30–50% of production costs, is another crucial step. Policymakers, private investors, and technology innovators will all play a role in achieving these reductions.

Building a domestic ecosystem: The national green hydrogen mission

In early 2022, the Indian government launched the National Green Hydrogen Mission with a planned outlay of $2.3 billion. The mission’s primary goal is to produce 5 million tonnes of green hydrogen annually by 2030, driven by incentives for production, infrastructure development and market expansion. Most of India’s current hydrogen usage, such as in refineries and fertiliser manufacturing, relies on grey hydrogen. The mission aims to convert these sectors to green alternatives and expand the use of green hydrogen to other industries, such as steel production and transportation.

Leading Indian companies like Indian Oil Corporation, Adani Group, and Reliance Industries are investing heavily in green hydrogen projects, reflecting a growing interest in the sector. By setting up dedicated green hydrogen facilities, these companies are paving the way for widespread adoption and helping to create a stable demand base that can drive down costs.

Exporting green hydrogen: India’s global opportunity

While domestic adoption is critical, India’s potential as an exporter of green hydrogen and its derivatives, such as ammonia and methanol, presents an exciting economic opportunity. Global demand for green hydrogen is rising, driven by countries like the European Union, Japan, and South Korea, which are seeking cleaner energy sources to meet their climate commitments.

India’s access to low-cost renewable energy and its strategic geographical position make it a strong contender in this burgeoning market.

Exporting green hydrogen could provide Indian producers with better value realisation, spur infrastructure development, and attract foreign investment. However, building the necessary export infrastructure, including port facilities and hydrogen conversion plants, will be crucial. Establishing international agreements and harmonised standards for green hydrogen derivatives can further position India as a key supplier in this global market.

Policy support and incentives: Laying the foundation

The success of India’s green hydrogen initiative hinges on effective policy support and targeted incentives. Measures such as a 25-year waiver on renewable energy interstate transmission charges for green hydrogen projects are already in place. Additional steps could include expanding production-linked incentives (PLIs) for electrolysers, reducing GST and import duties on renewable energy components, and encouraging research and development in innovative hydrogen technologies tailored to Indian needs.

The importance of demand-side mandates cannot be overstated. Policymakers could introduce requirements for industries like steel, cement, and transportation to incorporate green hydrogen into their processes, creating a predictable market and reducing investment risks. This approach has proven successful in the solar sector, where renewable purchase obligations drove rapid capacity expansion and cost reductions.

Challenges on the ground: Storage and transport

Green hydrogen’s potential is tempered by challenges related to storage and transportation. Hydrogen is a volatile, low-density molecule that requires specialised infrastructure for safe handling. Building dedicated hydrogen pipelines, developing storage solutions, and creating conversion facilities for derivatives like ammonia will require significant investment and coordination.

One proposed solution is the creation of hydrogen clusters—areas where production, storage, and consumption are closely integrated. Such clusters can reduce infrastructure costs and drive collaboration among industry players. For example, Adani Enterprises is setting up a massive green hydrogen cluster in Khavda, Gujarat, with plans to integrate production and industrial consumption.

Counterarguments and criticisms

Despite its promise, green hydrogen faces skepticism. Critics argue that the high cost of production and limited infrastructure make it less viable compared to other renewable energy sources, such as solar power or biofuels. Others caution against over-reliance on green hydrogen as a panacea, emphasising the need for a diversified energy mix. Addressing these concerns requires a balanced, long-term approach that prioritises innovation, cost reduction, and strategic investments in multiple energy solutions.

Connecting to global trends

Globally, green hydrogen is a topic of intense debate and rapid innovation. Countries like Germany, Japan, and the United States are investing billions in hydrogen technology, exploring its potential in transportation, industrial processes and energy storage. India’s progress in this sector will not only contribute to its domestic goals but also shape and be shaped by these international developments.

Collaboration with global partners, sharing best practices and fostering technological exchanges can accelerate India’s journey toward green hydrogen leadership. This exchange of knowledge and resources will be crucial as the country works to scale up production, reduce costs and establish itself as a global green hydrogen hub.

A vision for a greener future

India’s pursuit of green hydrogen represents more than just an energy transition; it is a vision for a cleaner, more resilient and economically vibrant future. By investing in green hydrogen, India can reduce its carbon footprint, enhance energy security and create new economic opportunities. The road ahead is challenging, but the potential rewards are immense—offering hope for a sustainable future powered by clean energy.

The journey to a greener future starts with bold steps, and India is taking them. As it works to build a thriving green hydrogen ecosystem, it can inspire the world to dream bigger and act faster in the pursuit of sustainability.

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