India Unveils Rs 10 Lakh Crore National Green Hydrogen Corridor; Aims Global Leadership

New Delhi, September 25, 2024 – In a landmark decision set to redefine India's energy landscape and industrial future, the Union Cabinet today greenlit the ambitious "National Green Hydrogen Industrial Corridor" project, committing an unprecedented Rs 10 lakh crore (approximately USD 120 billion) over the next decade.

This colossal initiative aims to establish a robust ecosystem for green hydrogen production, consumption, and export, positioning India as a global frontrunner in the nascent but critical clean energy sector.

The policy, spearheaded by the Ministry of New and Renewable Energy, is designed to accelerate the development of green hydrogen production capacities, foster indigenous manufacturing of electrolysers, and create a conducive environment for downstream applications across various sectors, including refining, fertilisers, steel, and heavy-duty transport.

Key points

* **Massive Investment:** A staggering Rs 10 lakh crore outlay over the next 10 years, primarily through a combination of public and private sector investments, with significant government support via viability gap funding and production-linked incentives (PLI) schemes.

* **Production Hubs:** Establishment of three major Green Hydrogen Industrial Zones (GHIZ) strategically located in states with high renewable energy potential and port access, targeting cumulative annual production of 5 Million Metric Tonnes (MMT) of green hydrogen by 2030.

* **Job Creation:** Projected to generate over 12 lakh (1.2 million) direct and indirect jobs across the value chain, from manufacturing and project execution to operations and maintenance.

* **Emission Reduction:** Expected to lead to a cumulative reduction of approximately 50 MMT of CO2 equivalent emissions annually by 2030, significantly contributing to India’s climate change mitigation targets.

* **Export Focus:** The corridor will also facilitate the development of export infrastructure and policies to position India as a major global supplier of green hydrogen and its derivatives, capitalising on burgeoning international demand.

Reported Detail

The National Green Hydrogen Industrial Corridor will see the phased development of infrastructure in identified regions.

The initial phase will focus on developing two primary hubs: one along the western coast, likely in Gujarat or Maharashtra, leveraging existing port facilities for export and catering to industrial demand, and another in the southern states like Andhra Pradesh or Karnataka, tapping into their vast renewable energy resources.

A third hub in the northern plains, potentially Rajasthan or Madhya Pradesh, is envisioned for later stages, focusing on domestic industrial consumption and agricultural applications.

The policy framework includes a comprehensive package of incentives.

A critical component is the extension and enhancement of the Production Linked Incentive (PLI) scheme for electrolyser manufacturing, aiming to bring down the cost of green hydrogen production by promoting domestic innovation and economies of scale.

Furthermore, the government plans to offer land allocation at concessional rates, expedited environmental clearances, and a streamlined regulatory regime to attract both domestic and international investors.

"This is more than just an energy policy; it's an economic revolution," stated Union Minister for New and Renewable Energy, Mr.

R.K.

Singh, during a press conference in New Delhi. "By committing Rs 10 lakh crore, we are not just investing in clean energy; we are investing in India's energy independence, industrial growth, and our leadership in the global fight against climate change.

We envision India becoming the world's most competitive green hydrogen producer and exporter by 2035."

Dr.

Suman Berry, Vice Chairperson of NITI Aayog, elaborated on the strategic implications. "The Corridor approach ensures synergy between renewable energy generation, hydrogen production, and consumption centres.

This integrated strategy will minimise logistical costs and accelerate technology adoption.

Our estimates show that this initiative could add 1-1.5% to our GDP annually once fully operational, creating a new sunrise industry for the nation."

The plan also includes significant investments in research and development, focusing on advanced electrolyser technologies, hydrogen storage, and safe transportation solutions.

Skill development programmes will be launched across various industrial training institutes and universities to prepare a workforce capable of supporting this burgeoning sector.

Mr.

Rajesh Kumar, CEO of Renew Energy India, a leading renewable energy developer, welcomed the announcement. "The clear policy roadmap and substantial financial commitment provide the certainty needed for private sector players to make long-term investments.

The PLI for electrolysers is particularly crucial, as it will drive down costs and make green hydrogen commercially viable faster than anticipated.

We are ready to partner with the government to make this vision a reality."

Background

India has set an ambitious target of achieving net-zero carbon emissions by 2070 and aims to meet 50% of its energy requirements from renewable energy by 2030.

The National Green Hydrogen Mission, launched in early 2023, laid the groundwork for the country's green hydrogen strategy.

Today's cabinet decision to establish the Industrial Corridor is a significant amplification of that mission, moving from conceptualisation to large-scale, concrete implementation.

It builds upon India's robust renewable energy capacity, which has seen exponential growth in solar and wind power over the past decade.

The initiative is also a strategic response to India's high reliance on fossil fuel imports, which currently drain significant foreign exchange reserves.

What it means

This policy decision holds profound implications for India's economy, environment, and geopolitical standing.

**Economic Transformation:** The Corridor is set to catalyse a new wave of industrialisation, creating a vibrant manufacturing ecosystem for electrolysers, fuel cells, and hydrogen-powered applications.

It will significantly reduce India's import bill for crude oil and natural gas, bolstering energy security and stabilising the rupee.

New export opportunities for green hydrogen and ammonia will generate substantial foreign exchange.

The projected job creation will provide a major boost to employment, especially in technical and engineering fields.

**Environmental Decarbonisation:** By transitioning hard-to-abate sectors like steel, cement, and heavy transportation to green hydrogen, India can achieve massive reductions in greenhouse gas emissions.

The replacement of grey hydrogen (produced from fossil fuels) with green hydrogen in fertiliser production alone will have a significant environmental impact.

It marks a decisive step towards achieving national climate goals and contributing to global climate action.

**Strategic Autonomy:** Becoming a major producer and exporter of green hydrogen will enhance India's strategic autonomy in the global energy landscape.

It positions India as a leader in emerging clean technologies, fostering international collaborations and technology transfers.

It also insulates the country from volatile global fossil fuel markets.

**Challenges Ahead:** Despite the immense potential, significant challenges remain.

These include the high initial capital expenditure, ensuring a consistent and cost-effective supply of renewable energy, managing water resources for electrolysis, and developing robust and safe hydrogen storage and distribution infrastructure.

Skill development and public acceptance of new technologies will also be crucial.

Reactions

The announcement has largely been met with optimism, tempered with calls for meticulous implementation.

**Industry Leaders:** Representatives from the energy, manufacturing, and infrastructure sectors have broadly lauded the initiative, expressing readiness to invest. "The government's bold vision is commendable.

We look forward to clear guidelines on incentive disbursement and a stable policy environment," said Ms.

Aditi Sharma, President of the Indian Hydrogen Alliance.

**Environmental Groups:** While welcoming the move towards clean energy, environmental watchdogs have urged caution regarding sustainability. "Green hydrogen must truly be green.

This means ensuring that the renewable energy powering electrolysis does not displace other critical land uses or strain water resources," commented Dr.

Sanjana Roy, Director of the Centre for Environmental Research, urging robust environmental impact assessments for all projects within the corridor.

**Opposition Parties:** Some opposition leaders have questioned the feasibility and transparency of the massive investment. "While the idea of green hydrogen is good, Rs 10 lakh crore is a colossal sum.

The government must ensure that these funds are utilised efficiently, without favouritism, and that the benefits reach all sections of society, not just a few large corporations," stated a prominent Lok Sabha MP from a leading opposition party.

**Economists:** Dr.

Vikram Singh, an independent economic analyst, observed, "This is a long-term play with significant upside.

The initial capital outflow will be substantial, but the returns in terms of energy security, new industries, and environmental benefits are immense.

The success hinges on attracting patient capital and fostering a genuine innovation ecosystem."

What happens next

The Ministry of New and Renewable Energy will now move swiftly to constitute a high-powered steering committee comprising representatives from key ministries, industry, and expert bodies.

This committee will be tasked with finalising the detailed project reports for each Green Hydrogen Industrial Zone.

Over the next 6-12 months, the government is expected to issue a series of tenders for land allocation, renewable energy procurement, and the installation of electrolyser capacity within the designated corridors.

Simultaneously, a national green hydrogen grid planning exercise will commence to ensure efficient distribution.

International collaborations, particularly for technology transfer and export market development, will also be prioritised.

The success of the National Green Hydrogen Industrial Corridor will be closely monitored through a robust framework of key performance indicators, with periodic reviews to ensure targets are met and challenges addressed proactively.