India’s green hydrogen initiative is highly ambitious but lacks the necessary funding to be successful. If New Delhi wants to become a major H2 hub, it will need to increase support in the form of grants, carbon fees, and procurement regulations.
Consider the nation’s first green hydrogen tender at the federal level, which is providing incentives for fuel production as part of the government’s Rs19,744 crores hydrogen program. The goal was to make India a centre for the production of green hydrogen, a major supplier of affordable, clean fuels to the rest of the world, and to produce 5 million tonnes of green hydrogen annually by the year 2030.
In comparison to what Western powers are providing, the subsidy per unit of green hydrogen supply is negligible and unattractive for domestic uptake. The tenders were moreover frequently postponed. After introducing the National Green Hydrogen Mission in January 2022, New Delhi requested proposals 18 months later. However, the tenders still came out undercooked, and bidders repeatedly asked for explanations, which caused a three-delay in the bid submission process, according to government records.
India uses about 6 million tonnes of hydrogen annually, of which 3.25 million tonnes are used to make fertilizer and the most is used in refineries. According to estimations from the industry, the demand for hydrogen may increase to 28 million tonnes by 2050, of which 80 percent may be green. Delhi set a goal to produce at least 5 million tonnes of green hydrogen annually by 2030, along with an additional 125 GW of renewable energy capacity. This increased the demand for electrolyzers.
India will provide subsidies for 3GW of annual electrolyser production capacity and 3 million tonnes of annual fuel production capacity. Without procurement regulations or carbon levies, India’s underfunded green hydrogen auctions are largely useless, according to industry sources. Only if enterprises are compelled to purchase green hydrogen can a lower incentive structure-function.