- 28 Dec 2022
- ICICIdirect Research
GOVERNMENT PLANS $2-BILLION INCENTIVE PROGRAMME FOR GREEN HYDROGEN INDUSTRY
India is planning a $2 billion incentive programme for the green hydrogen industry. The incentive aims to reduce the production cost of green hydrogen by a fifth over the next five years, said an official. The current cost in India is Rs 300-400 per kg. The Indian aid could be announced in the February 1 Budget for FY24, said the official. The government expects industry to invest Rs 8 trillion in green hydrogen and its derivative green ammonia by 2030. The green hydrogen proposal is likely to be called "Strategic Intervention for Green Hydrogen Transition (SIGHT)" and will be split into Rs 4500 crore for electrolyser manufacturing for five years and Rs 13500 crore for green hydrogen and green ammonia production for three years. The incentive for making green hydrogen is likely to be Rs 50 per kg for three years. India aims to sell 70% of the production to countries such as South Korea, Japan and in the European Union, adding that derivatives, including green ammonia, had an equally strong demand. The government is estimating global demand for green hydrogen will exceed 100 million tonnes by 2030, from 75 million tonnes now, according to sources.
This announcement or incentive will be beneficial for players like RIL, Adani, L&T, NTPC that have mega plans to capitalise on the green hydrogen opportunity for production of electrolysers and green fuel.