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HomeBusinessRs 19,744 crore incentive makes India global green hydrogen hotspot

Rs 19,744 crore incentive makes India global green hydrogen hotspot


NEW DELHI: The Rs 19,744 crore, or over $2 billion, incentive for green hydrogen (GH2) along with the projected production capacity of 5 million tonnes by 2030 positions India amongst the top three investment hotspots globally for ‘fuel of the future’, industry players and analysts said.
India is the latest to incentivise GH2. The US recently extended support to GH2 under its Inflation Reduction Act. Germany, UK and Japan also have announced programmes to support clean hydrogen.
“The incentive will make the green molecule from India competitive and help the country become a global export hub of GH2 and green ammonia,” said ACME group CEO Rajat Seksaria, whose company is building green hydrogen and ammonia plant in India and Oman.
According to Hemant Mallya of CEEW, incentive scheme for electrolysers will help establish India as an electrolyser manufacturing hub and tap into the global electrolyser market of $425 billion.
IEEFA South Asia director Vibhuti Garg saw the allocation for pilot projects and strategic interventions, especially if focussed on electrolysers, improving the feasibility of such projects and helping attract private sector investments.
However, Deloitte India’s Shubranshu Patnaik said the government will also need to create adequate demand by making hard-to-abate user industries transition to GH2 by giving incentives and putting obligations to use the green fuel.
Mallya said a subsidy of 50 US cents per kg of GH2 to end-users will help achieve parity with grey hydrogen obtained from natural gas and potentially back out 68% of India’s LNG imports. “It will create the necessary demand-side pull and catalyse the production of GH2, which is essential to develop the ecosystem and establish India as a leader in this new energy space.”
Solar industry too expected to benefit from a rapid development of GH2 ecosystem. Since GH2 needs renewable power, producers can bank on solar power. This will support the domestic solar power industry and component manufacturers, Gautam Mohanka, MD of solar module manufacturer Gautam Solar, said.
The incentive, Seksaria said, is required for the initial projects to create green hydrogen hubs, which will allow supply chains to be established and production to be scaled up.
Additionally, Mallya said, the funds allocated for piloting are critical to establish the viability of green hydrogen use in new applications like green steel, thermal equipment and mobility.



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