Hydrogen Energy in India: Roadmap and Implementation of the National Hydrogen Mission

Hydrogen energy is emerging as a pivotal piece in the global shift towards sustainable energy solutions, particularly as the world grapples with an urgent need to combat climate change. As the simplest and most abundant element in the universe, hydrogen finds application in numerous applications: transportation, power generation and industrial processes. Its application as a clean energy carrier is particularly promising, especially when used in fuel cells. It produces only water vapour and is thus a zero-emission substitute for fossil fuels. In 2019, renewables (renewable energy sources) already held a share of 72% of the worldwide alternative power source expansion, as confirmed by the International Renewable Energy Agency (IRENA). This indicates the increasing importance of clean energy sources. Hydrogen complements these global endeavours well, especially in hard-to-decarbonise sectors including heavy industries such as steel, cement, and chemicals. 

India started its National Hydrogen Mission on 4 January 2023, aiming to become a global leader in green hydrogen production by 2030, with at least 5 million metric tonne (MMT) annual capacity, attracting more than Rs. 8 lakh crore (US$ 95.9 billion) in investments. The initiative aims to reduce the country’s dependence on fossil fuels, develop job opportunities and foster economic growth. Hydrogen will play a leading role in future energy systems as part of the transition to a low-carbon economy, ability to store excess renewable energies and supply these as required cleanly and affordably. 

Importance of Green Hydrogen in Combating Climate Change

Green hydrogen is pivotal in the fight against climate change, particularly in heavy industries that are significant contributors to global carbon emissions. For example, 22% of the world’s total CO2 emission can be attributed to the production of steel, cement, and chemicals. Replacing fossil fuels with green hydrogen in energy-intensive processes can significantly decrease these emissions. India recently hosted the 41st Steering Committee Meeting of the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE). The existence of the committee underscores the global effort to fast-track the hydrogen economy. At the event, experts stressed that research and technology need to be pursued collaboratively to affordably scale up the production of green hydrogen. The Indian government has committed to promoting green hydrogen under its National Green Hydrogen Mission, highlighting its potential as a future fuel alternative. This not only helps the environment but is also economically viable – for example, it creates employment in new green sectors and enhances energy security by diversifying energy sources. Furthermore, it becomes an effective storage medium concerning renewable energy, helping to balance the electricity grid and load supply during peak load hours.

Current Global Trends in Hydrogen Energy

The global landscape of hydrogen-based energy is rapidly evolving, with significant trends indicating a shift towards cleaner hydrogen production methods. In the Global Energy Perspective 2023, McKinsey projects that the demand for clean hydrogen will rise sharply, potentially representing 73-100% of total hydrogen demand by 2050. This transition would be driven by increasing regulatory pressures and advancements in technology that make green hydrogen economically viable. Currently, most of the hydrogen applied worldwide is grey. However, this will diminish over time when industries increasingly turn to blue and green hydrogen. In fact, by 2025, McKinsey & Company estimates that almost all new hydrogen production should be clean, marking a vital turning point in the hydrogen economy. Asia will remain the largest user of hydrogen due to the expected demand from the chemical sector, while Europe is aiming to phase out grey hydrogen completely by 2050. The anticipated increase in hydrogen trade will connect hydrogen-rich regions with high-demand regions, thus forming a global hydrogen market. In summary, green hydrogen will be the key to reaching climate objectives and ensuring a sustainable energy future. The hydrogen economy with investments in technologies and infrastructure will emerge as one of the most important parts of the global transition.

The National Green Hydrogen Mission

• Overview of the NHM’s launch and strategic importance for India

The Indian government launched the National Green Hydrogen Mission (NHM) on 4 January 2023, a landmark mission, which seeks to position India on the global map for the production, use and export of green hydrogen. With an initial investment of Rs. 19,744 crore (US$ 2.37 billion) to incentivise commercial production of green hydrogen, the mission helps the country in transitioning towards a cleaner energy future. The NHM is not just a response to domestic energy needs but also a proactive measure to tap the burgeoning global hydrogen market poised to cross demand of over 100 million metric tonnes (MMT) by 2030. The establishment of the NHM becomes strategic due to a host of reasons: to begin with, it dovetails neatly into the broader goals India has set for itself in the context of attaining energy independence and reducing the country's dependency on imports of fossil fuel. 

India currently relies on imports to meet more than 40% of its primary energy needs, costing the country over US$ 90 billion annually. In promoting the application of green hydrogen, it aims to meet domestic energy requirements and establish itself as a key player in the world hydrogen market. This will also create large economic opportunities, including jobs for more than 600,000 people, while also contributing to reduction in GHG emission. The mission has been designed to create demand for green hydrogen, add to the existing production capacities, and also enable its use in sectors. Together, these aspects form a holistic approach toward establishing a robust hydrogen economy in India, a country strategically located with abundant renewable energy resources, primarily from solar and wind power. NHM aims to produce a minimum of 5 MMT of green hydrogen each year by the year 2030. If there is sufficient demand in export markets, this capacity could potentially be doubled. The NHM has to be rolled out in a phased manner to achieve these ambitious targets.

• Phase I (2022-2023 to 2025-2026): This phase focuses on creating demand while enabling adequate supply by increasing domestic electrolyser manufacturing capacity. The use of green hydrogen will be stepped up in refineries, fertilisers, and city gas to ensure sustained demand. Pilot projects will be started for the green transition of steel production, heavy-duty mobility, and shipping. A framework of regulations and standards that would facilitate sector growth will also be established.
• Phase II (2026-2027 to 2029-2030): By this phase, the cost of green hydrogen is expected to equal that of competing fossil alternatives in key areas, allowing a rapid upscaling in production and support of commercial-scale projects in sectors like steel, mobility, and shipping. Pilot projects will also be launched in emerging sectors such as railways and aviation, with strong emphasis on advancing R&D activities that drive continuous development.

In addition, NHM will develop the necessary infrastructure for the storage, transportation, and use of green hydrogen. This translates into the formation of hydrogen hubs, refuelling stations, and pipelines for bulk transport – all steps that will make upscaling the hydrogen economy a reality. Also, the mission outlines the pivotal role of research and development in bringing technologies related to electrolysis and hydrogen production closer to realisation. 

It is particularly important for India to achieve energy independence by 2047 – at least in terms of a net-zero emission economy by 2070. The NHM is a critical step to meet such ambitious climate goals. By using its enormous renewable energy resources, India can not only fulfil its own energy needs but also ensure its place as a leader in the production and export of green hydrogen as part of the global clean energy transition.

Roadmap for Hydrogen energy in India

India’s journey towards becoming a leader in hydrogen energy is marked by several key milestones, including the establishment of pilot projects and the scaling up of production capacities. A significant development in this regard is the commissioning of India’s first green hydrogen plant by GAIL in Madhya Pradesh, inaugurated in May 2024. The plant is built with a capacity to produce 4.3 tonnes of green hydrogen per day, increasing India’s global capacity for green hydrogen. The plant is made to operate on renewable power for the process of electrolysis, so the hydrogen manufactured attains a purity level of 99.999%. In the initial phase, the generated hydrogen will be used along with natural gas for some of the processes in the existing Vijaipur plant, and in due course, it will be supplied to retail customers close to the facility. This is among the first concrete steps under the NHM, which aims to create a production capacity of 5 MMT per annum by 2030. Besides this plant, India has embarked on three pilot projects focused on demonstrating the potential of using green hydrogen in critical sectors like shipping, steel manufacturing and transportation. These pilot projects aim not only to demonstrate technical feasibility but also to work on the infrastructure needed and create demand in these emission-intensive sectors.

In the Union Budget 2024-25, the National Green Hydrogen Mission received a significant allocation of Rs. 600 crore (US$ 71.93 million), marking a substantial 102% increase from last year’s allocation of Rs. 297 crore (US$ 35.60 million). This funding is particularly striking when compared with the revised estimate of Rs. 100 crore (US$ 11.99 million), indicating a remarkable 500% rise. The mission, initially launched with an outlay of Rs. 19,744 crore (US$ 2.37 billion) includes funding for various initiatives: Rs. 17,490 crore (US$ 2.10 billion) for the SIGHT programme, Rs. 1,466 crore (US$ 175 million) for pilot projects, Rs. 400 crore (US$ 48 million) for research and development, and Rs. 388 crore (US$ 46.51 million) for other components. This considerable investment demonstrates a strong commitment to advancing green hydrogen technologies and supporting sustainable energy initiatives in India.

The Indian government is actively crafting policies to incentivise investment in hydrogen infrastructure, which is essential for the success of the NGHM. Key among these is the Strategic Interventions for Green Hydrogen Transition (SIGHT), underway since June 2023. The programme offers financial incentives for domestic manufacturing of electrolysers and green hydrogen production. The programme carries an outlay of Rs 17,499 crore (US$ 2.1 billion) and would include mechanisms to support not just the production but also the infrastructure required for the use of hydrogen. The government also issued tenders to enable the production of green hydrogen totalling 412,000 tonnes per annum and established an electrolyser manufacturing capacity of 1,500 MW per annum. These policies aim to attract private investments in the development of a strong hydrogen economy in the nation. The government is also actively looking at various innovation financing models, including the Contract for Difference (CfD) mechanism, which will bridge the gap between market prices and pre-determined strike prices to ensure an economic value in green hydrogen projects. It is further believed that successful implementation of hydrogen technologies in India can be realised when there are well-developed and comprehensive regulatory frameworks. The Indian government has taken the initiative to define the standards for production of green hydrogen so the hydrogen produced can meet some threshold levels, known as the “green” level. While the basic standards have been fixed, detailed methodologies of measurement, reporting, monitoring, and certification are still in the pipeline. These regulatory frameworks are key in creating a transparent and accountable hydrogen market that, in turn, instils confidence in investors and stakeholders. The government is also working to rectify gaps within its mandates to support the establishment of hydrogen infrastructure, including storage, distribution, and safety standards. 

India, through the setting up of a clear regulatory regime, envisions a step towards enabling hydrogen technologies to grow and integrate within the energy landscape safely and efficiently. At the crux of realising India’s roadmap for hydrogen energy is cooperation: its realisation calls for active engagement of state governments and industries in driving implementation. The Indian government understands that, to achieve the huge objectives of the NHM, there has to be a dedicated partnership among all stakeholders in the public and private sectors at various levels of governance. These partnerships would involve public-sector undertakings, private-sector organisations, technology providers and civil society organisations in a coordinated attempt to pull in a range of expertise and resources for the development of hydrogen infrastructure and technologies. The pilot projects on shipping, steel manufacturing and transportation are already designed to involve several stakeholders, to provide lessons learned that can be shared and scaled as needed. The government is also encouraging state governments to implement conducive policies and incentives that align with the national mission – to further improve prospects for hydrogen energy adoption. Through these collaborations, India envisions building a full-fledged hydrogen ecosystem that fosters innovation, investment, and sustainable growth in the hydrogen domain.