Launched in 2021, the National Green Hydrogen Mission is gathering pace with a series of recent developments. The initiative seeks to accelerate the production and adoption of green hydrogen and ammonia, which are critical to India’s renewable energy ambitions.
Incentives Driving Investment
Under the mission’s incentive scheme, the government allocated 1.2 million tons per annum (mtpa) of green hydrogen and ammonia. The move is expected to trigger nearly $18 billion (₹1.6 lakh crore) in investments. It will also boost renewable energy generation capacity by about 30 gigawatts (GW).
Major industrial players such as Adani Enterprises, Reliance Industries, and Larsen & Toubro (L&T) have emerged as key beneficiaries. Adani has secured incentives for 0.3GW of electrolyser manufacturing capacity, while Reliance and L&T received support for green hydrogen and electrolyser projects, according to ICICI Securities.
New Bidding Phase Targets Key Sectors
The latest round of bids, designed by aggregating demand from end users like refineries and fertiliser companies, marks a turning point in the mission. These industries currently rely on grey hydrogen, and the government is encouraging a gradual shift to green hydrogen with minimal cost impact. ICICI Securities noted that the bidding attracted a diverse set of winners. L&T secured a contract to supply green hydrogen to Indian Oil Corporation Limited (IOCL), while NTPC Green won large capacities in green ammonia production.
Price Discovery Highlights Economic Challenges
The bidding process also revealed crucial insights into pricing. Green hydrogen was discovered at $3.5–4 per kilogram, significantly higher than grey hydrogen at below $2 per kilogram. This price gap underscores the economic hurdles that must be overcome for green hydrogen to compete with conventional alternatives.
Emerging Export Potential
India is also positioning itself as a future export hub for green ammonia. Collaborations such as L&T’s partnership with Itochu for ammonia offtake are paving the way for international opportunities. However, ICICI Securities cautions that not all proposed capacities are likely to materialize. A more realistic expectation stands at about 0.5 mtpa, reflecting the challenges of scaling up.
Outlook: Policy, Technology, and Cost Will Decide Success
While the Green Hydrogen Mission has made significant strides, its long-term success will depend on sustained policy support, breakthroughs in technology, and cost reductions. ICICI Securities views the early progress as a critical foundation for building a robust green hydrogen ecosystem. As reported by businesstoday.in, by aggregating demand and incentivizing production, the government has shown its commitment to clean energy transition, strengthening India’s position as a global player in the green energy landscape.
