India’s green hydrogen and green ammonia project developers are actively pursuing offtake contracts in Japan and South Korea as the domestic market struggles to take off.
The move aims to provide developers with a steady market for their products, while the local sector remains underdeveloped.
Potential Investments Hinged on International Offtake Agreements
Prashant Vasisht, Senior Vice-President and Co-Goup Head of corporate ratings at ICRA stated, “We could see green hydrogen and ammonia projects in India materialize if there are firm offtake agreements. Large developers are optimistic about signing these contracts by 2025 with off-takers in countries like Japan and South Korea”.
Domestic Market Challenges and Export Focus
Sanjay Gupta, CEO of Apollo Green Energy, acknowledged that India’s market for green hydrogen is not mature enough to accommodate large-scale production. As a result, companies are turning their attention to international buyers.
Gupta pointed out that this shift increases the export bill.
He Said, “The ideal scenario is for green hydrogen to be utilized domestically, similar to solar energy, but until that happens, we must look abroad for markets”.
Gupta remains optimistic about India’s future prospects.
He noted, “If India succeeds in feeding international markets, it will be competing on a global stage. The cost of production must remain competitive to secure a foothold in these markets. Once the domestic market matures, India will offer highly cost-effective hydrogen solutions”.
Challenges in Scaling Green Hydrogen Production
Arjun Mehta, a green hydrogen expert and advisor to GH2 India, highlighted the difficulties developers face in scaling up projects. He explained that while early-stage discussions on offtake contracts are happening, these have yet to materialize into larger, firm agreements.
Mehta added that although government policies have eased production costs, issues such as inadequate transmission infrastructure, limited institutional financing, and supply chain challenges are delaying large-scale project development in India.
India’s Green Hydrogen Goals
Green hydrogen is produced from renewable energy sources like wind and solar. It is crucial for decarbonizing hard-to-electrify sectors, such as heavy transport, chemicals, and steel production.
India has set ambitious goals to develop its green hydrogen sector as part of its broader energy transition strategy.
As reported by theelectricityhub.com, the country aims to reduce carbon emissions. It also seeks to position itself as a global leader in renewable energy production.
