India Unveils Ambitious Green Hydrogen Mission, Targeting Global Leadership by 2030 with ₹19,744 Cr Push

New Delhi, 4th April 2024 – In a landmark move poised to reshape India's energy landscape and global green economy standing, the Union Cabinet today approved the ambitious National Green Hydrogen Mission, backed by an initial outlay of ₹19,744 crore.

This strategic initiative aims to position India as a leading global hub for the production, utilisation, and export of green hydrogen and its derivatives, targeting an annual production capacity of 5 million metric tonnes (MMT) by 2030, alongside substantial decarbonisation, job creation, and a significant reduction in fossil fuel imports.

Key points

* **Financial Commitment:** The government has allocated an initial ₹19,744 crore for the mission, encompassing various components like the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme.

* **Production Target:** A key objective is to achieve an annual green hydrogen production capacity of 5 MMT by 2030, a monumental step towards sustainable energy independence.

* **Economic Impact:** The mission is projected to attract over ₹8 lakh crore in total investments, leading to the creation of more than 6 lakh jobs across various sectors.

* **Environmental Goals:** It aims to reduce CO2 emissions by nearly 50 MMT annually and cut down fossil fuel imports by over ₹1 lakh crore by 2030.

* **Strategic Imperatives:** The policy focuses on developing domestic manufacturing capabilities for electrolysers, promoting pilot projects in steel, mobility, and shipping sectors, fostering research and development, and building a robust skill ecosystem.

The National Green Hydrogen Mission, spearheaded by the Ministry of New and Renewable Energy, employs a multi-pronged strategy.

Central to this is the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme, which offers financial incentives for domestic electrolyser manufacturing and green hydrogen production – vital for reducing costs and boosting market competitiveness.

Pilot projects are slated for hard-to-abate sectors like green steel, green mobility, and shipping, serving as crucial demonstration grounds.

The mission also envisages creating dedicated Green Hydrogen Corridors to ensure efficient supply chains.

Significant emphasis is placed on an R&D roadmap to bridge technological gaps, alongside skill development programmes to cultivate a competent workforce, thereby fostering a self-reliant green hydrogen ecosystem.

"This National Green Hydrogen Mission marks a pivotal moment in India's journey towards energy independence and a sustainable future," stated Union Minister for New and Renewable Energy, R.K.

Singh, addressing a press conference in New Delhi. "Our goal is not just to meet our domestic energy needs sustainably, but to emerge as a leading global exporter of green hydrogen.

The ₹19,744 crore initial outlay is a clear testament to our commitment to accelerating the transition to a hydrogen-based economy, creating millions of jobs, and significantly decarbonising our hard-to-abate sectors."

Echoing the sentiment, Sanjiv Puri, President of the Confederation of Indian Industry (CII), remarked, "The mission provides a much-needed policy impetus and a clear roadmap for the industry.

The incentives for manufacturing electrolysers and producing green hydrogen are critical for reducing initial capital costs and improving economic viability.

Indian industry is ready to step up, invest, and innovate to make this mission a resounding success, unlocking immense opportunities for growth and global competitiveness."

Dr.

Indira Devi, a Senior Energy Economist at the Observer Research Foundation, offered a nuanced perspective. "While the targets are ambitious and commendable, the real challenge will lie in the execution.

India needs to ensure a consistent supply of cost-effective renewable energy, particularly solar and wind power, which is the primary input for green hydrogen production.

Addressing the logistics of storage and transportation, especially for exports, will also be crucial.

However, the mission's focus on domestic manufacturing and R&D is a positive step towards building an indigenous ecosystem."

The numerical targets set by the National Green Hydrogen Mission are ambitious and transformative. By 2030, the mission aims to:

* Achieve an annual green hydrogen production capacity of 5 million metric tonnes (MMT).

* Attract total investments exceeding ₹8 lakh crore (approximately US$100 billion).

* Create over 6 lakh (600,000) direct and indirect jobs.

* Result in a cumulative reduction of nearly 50 MMT of annual CO2 emissions.

* Reduce cumulative fossil fuel imports by over ₹1 lakh crore (approximately US$12 billion).

* Add about 125 GW of renewable energy capacity, primarily for green hydrogen production.

These figures underscore the scale of the government's ambition and the potential impact of the mission on India's economy, environment, and energy security.

The ₹19,744 crore initial outlay will primarily fund the SIGHT programme (₹17,490 crore), pilot projects (₹1,400 crore), R&D (₹400 crore), and other mission components (₹364 crore).

Background

India, the world's third-largest emitter and a rapidly growing economy, faces the dual challenge of escalating energy demand and a mandate for cleaner energy.

High dependence on imported fossil fuels (over 85% crude oil, 50% natural gas) burdens the economy and fuels emissions.

At COP26, Prime Minister Modi committed India to Net Zero by 2070, 50% renewable energy by 2030, and 45% carbon intensity reduction.

Green hydrogen, produced via renewable electricity, is key to decarbonising sectors like steel, cement, and heavy transport.

Building on its substantial renewable energy capacity and the 2021 National Hydrogen Energy Mission, today's comprehensive policy offers a clear framework and financial incentives for accelerated adoption.

What it means

* **Economic Impetus:** This mission is a significant economic catalyst.

The projected ₹8 lakh crore investment will fuel growth in manufacturing, engineering, and services, fostering a new industrial ecosystem around green hydrogen.

This bolsters the 'Make in India' initiative for electrolysers, reducing import reliance and promoting indigenous innovation.

The substantial job creation underscores its potential to address employment and skill development.

* **Energy Independence:** By diversifying the energy basket, India enhances its energy security, reducing dependence on volatile imported fossil fuels.

This pathway to energy independence offers insulation from global market fluctuations and geopolitical disruptions.

The projected ₹1 lakh crore reduction in fossil fuel import bills will also strengthen the national exchequer.

* **Climate Leadership:** The mission firmly positions India as a leader in global climate action.

Achieving the target of 50 MMT annual CO2 emission reduction is a critical step towards India's Net Zero commitment and aligns with its 'Panchamrit' pledges.

It provides a viable decarbonisation solution for hard-to-electrify sectors.

* **Innovation & Challenges:** The focus on R&D and pilot projects will foster technological innovation in green hydrogen, potentially leading to breakthroughs in efficiency and storage.

However, significant challenges remain.

High initial capital costs, ensuring consistent and cost-effective renewable energy supply, judicious water management for electrolysis, and developing robust hydrogen storage and transportation infrastructure are critical hurdles that will demand effective implementation and sustained investment.

Reactions

* **Industry Optimism:** Industry stakeholders have largely welcomed the mission. "This clear policy direction and financial commitment are crucial for de-risking investments," stated Dr.

Sunil Mathur, CEO of a leading renewable energy firm, predicting a surge in domestic and foreign investments.

The support for electrolyser manufacturing was particularly highlighted as a key enabler.

* **Environmental Cautions:** Environmental groups praised the decarbonisation potential but urged caution.

Ms.

Pooja Singh, Director of the Centre for Environmental Justice, stressed that renewable energy for hydrogen production must be truly additional and not divert from other electrification needs, also calling for robust environmental impact assessments concerning water usage.

* **Opposition Scrutiny:** Some opposition leaders, while acknowledging the mission's importance, called for greater transparency.

Mr.

Arjun Reddy, MP, emphasised ensuring incentives benefit a wide array of businesses, not just a few large corporations, and advocated for robust monitoring to prevent crony capitalism.

Concerns about long-term financial sustainability without clear cost reduction plans were also raised.

* **International Acclaim:** International energy agencies and diplomatic missions largely lauded India's initiative as a significant contribution to global climate efforts, expecting it to accelerate worldwide green hydrogen technology development.

What happens next

* **Detailed Schemes:** The Ministry of New and Renewable Energy is expected to promptly release detailed scheme guidelines for the SIGHT programme and other mission components, outlining eligibility, application processes, and disbursement mechanisms.

* **Stakeholder Engagements:** Extensive consultations with industry, research institutions, and state governments will refine implementation strategies and identify project sites.

* **Pilot Projects:** Calls for proposals and selection processes for pilot projects in sectors like green steel and mobility will commence, crucial for demonstrating commercial viability and gathering operational data.

* **R&D Roadmap:** A detailed R&D roadmap will be unveiled, specifying areas for technological advancement, funding opportunities, and industry-academia collaborations.

* **Global Outreach:** India will actively host investment roadshows and engage in bilateral discussions to attract foreign direct investment and technological partnerships.

* **Continuous Monitoring:** A robust monitoring and evaluation framework will track progress against targets, with regular reviews to assess policy effectiveness and ensure the mission remains on course for its ambitious 2030 goals.