Cabinet approves Rs 19,500 cr for National Green Hydrogen Mission

The Union Cabinet on Wednesday approved an initial outlay of Rs 19,500 crore for the National Hydrogen Mission, which was launched by the Prime Minister in his speech on the 75th Independence Day in 2021. The mission will have four components which would aim to enhance the domestic production of green hydrogen and promote manufacturing of electrolysers – a key component for making green hydrogen.

The initial outlay for the Mission will include Rs 17,490 crore for the SIGHT programme, Rs 1,466 crore for pilot projects, Rs 400 crore for R&D, and Rs 388 crore towards other mission components, the Centre said in a statement. The initial target is to produce five million tonnes of green hydrogen annually.

Strategic Interventions for Green Hydrogen Transition Programme or SIGHT would include two financial incentive mechanisms for domestic manufacturing of electrolysers and production of green hydrogen.

The Mission will also support pilot projects in emerging end-use sectors and production pathways. Regions capable of supporting large scale production and/or utilization of hydrogen will be identified and developed as ‘Green Hydrogen Hubs’.

An enabling policy framework will be developed to support establishment of the Green Hydrogen ecosystem, said the government. “A robust Standards and Regulations framework will also be developed. Further, a public-private partnership framework for R&D (Strategic Hydrogen Innovation Partnership – SHIP) will be facilitated under the Mission,” said the statement.

In February last year, the ministry of power notified the Green Hydrogen/Ammonia Policy which aims at the production of 5 million tonnes of green hydrogen by 2030. The same target remains in the final mission as well. According to the policy drafted by the ministry of power, green hydrogen/ammonia manufacturers can set up green energy projects or procure the same from energy exchanges. Several waivers including inter-state transmission charges, ease of getting open access and transmission connectivity was provided under the policy.

Every leading conglomerate which has interest in the energy sector to new age renewable energy companies and even automobile makers have announced either investment or consumption plans for green hydrogen. Adani Enterprises, Reliance Industries Ltd (RIL), Tata Group, JSW Energy, L&T, ACME Group, ReNew Power and many others have announced their investment plan. Ashok Leyland which is India’s leading commercial vehicle paper is looking at a tie-up to run a section of their fleet on green hydrogen.

However, the sector has been demanding sovereign support as the cost of electrolysers and the overall cost of manufacturing green hydrogen is high. The current cost of green hydrogen in the country is around $5 per kg.

“The incentive programme makes the green molecule from India competitive. This is required for the initial few projects and creates green hydrogen hubs, which will allow supply chains to be established and scale of production to increase. Several nations have already come up with green hydrogen subsidy and support programs,” said Rajat Seksaria, CEO, ACME Group.

The nodal department for the mission would be the Ministry for New and Renewable Energy. To meet the 5-million-tonne target, it is estimated that an associated renewable energy capacity of close to125 Gw would be required. The Centre expects close to 50 million tonnes per annum of carbon emissions to be averted by 2030.

Industry interest in Green Hydrogen

  • RIL, as part of its Rs 75,000 crore green investment push, will set up electrolysers for manufacturing green hydrogen. Aim – 1-1-1 = 1 kg hydrogen at $1 in 1 decade

  • Adani New Industries Ltd to invest $50 billion along with Total Energies in building a green hydrogen ecosystem

  • ACME to invest $1.5 trillion in Tamil Nadu, Karnataka and Oman over the next 7 years for green hydrogen production

  • L&T commissioned its first green hydrogen manufacturing unit to produce 45 kg daily

  • ReNew Power to signs pact with Egypt government for setting up green hydrogen manufacturing worth $8 billion

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