Green Hydrogen Policy

The National Hydrogen Mission was launched on India's 75th Independence Day (i.e. 15th August , 2021). The Mission aims to aid the government in meeting its climate targets and making India a green hydrogen hub.  The Mission aims to aid the government in meeting its climate targets and making India a green hydrogen hub. This will help in meeting the target of production of 5 million tonnes of Green hydrogen by 2030 and the related development of renewable energy capacity. 

In line with the above announcements, a Green Hydrogen Policy have been framed and notified during February 2022 by Government of India for compliance/implementation by all the concerned stakeholders.

Hydrogen as a fuel

Hydrogen and Ammonia are envisaged to be the future fuels to replace fossil fuels. Production of these fuels by using power from renewable energy, termed as green hydrogen and green ammonia, is one of the major requirements towards environmentally sustainable energy security of the nation. Government of India is taking various measures to facilitate the transition from fossil fuel / fossil fuel based feed stocks to green hydrogen / green ammonia. The notification of this policy is one of the major steps in this endeavour. 

There is an increased consensus around the world that concerted steps need to be taken to reduce global warming to levels less than 2° C and if possible to cap it at 1.5° C higher than pre-industrial levels. Various countries have pledged their Nationally Determined Contributions in order to ensure energy transition and reduce emissions. Most large economies including India have committed to net zero targets. Transition to Green Hydrogen and Green Ammonia is one of the major requirements for reduction of emissions, especially in the hard to abate sectors. Government of India have had under consideration a number of policy measures in order to facilitate the transition from fossil fuel /fossil fuel based feed stocks to Green Hydrogen/ Green Ammonia both as energy carriers and as chemical feed stock for different sectors.

National Hydrogen Mission

The broad objective of the mission is to scale up Green Hydrogen production and utilisation and to align India’s efforts with global best practices in technology, policy and regulation. Accordingly, the Government of India has allotted Rs 25 crore in the Union Budget 2021–22 for the research and development in hydrogen energy. The Mission will focus both on the short term and the long term (10 years and more). The aim is to develop a global hub for hydrogen technologies manufacturing; to this end, a framework to support manufacturing via incentives and facilitation will be developed. The Government will also facilitate demand creation in specific areas, including mandates for the use of green hydrogen in industry (fertilizer, steel, petrochemicals etc.), and its demonstration in transport applications. The NHM will focus on the generation of hydrogen from green power resources and link India’s growing renewable capacity with the hydrogen economy. 

Green Hydrogen Policy details

The Green Hydrogen Policy provides as under:

• Green Hydrogen / Green Ammonia shall be defined as Hydrogen /Ammonia produced by way of electrolysis of water using Renewable Energy; including Renewable Energy which has been banked and the Hydrogen/Ammonia produced from biomass.
• The waiver of inter-state transmission charges shall be granted for a period of 25 years to the producer of Green Hydrogen and Green Ammonia from the projects commissioned before 30th June 2025.
• Green Hydrogen / Green Ammonia can be manufactured by a developer by using Renewable Energy from a co-located Renewable Energy plant, or sourced from a remotely located Renewable Energy plants, whether set up by the same developer, or a third party or procured renewable energy from the Power Exchange. Green Hydrogen/Green Ammonia plants will be granted Open Access for sourcing of Renewable Energy within 15 days of receipt of application complete in all respects. The Open Access charges shall be in accordance with Rules as laid down.
• Banking shall be permitted for a period of 30 days for Renewable Energy used for making Green Hydrogen /Green Ammonia.
• The charges for banking shall be as fixed by the State Commission which shall not be more than the cost differential between the average tariff of renewable energy bought by the distribution licensee during the previous year and the average market clearing price (MCP) in the Day Ahead Market (DAM) during the month in which the Renewable Energy has been banked.
• Connectivity, at the generation end and the Green Hydrogen / Green Ammonia manufacturing end, to the ISTS for Renewable Energy capacity set up for the purpose of manufacturing Green Hydrogen / Green Ammonia shall be granted on priority under the Electricity (Transmission system planning, development and recovery of Inter State Transmission charges) Rules 2021.
• Land in Renewable Energy Parks can be allotted for the manufacture of Green Hydrogen / Green Ammonia .
• The Government of India proposes to set up Manufacturing Zones. Green Hydrogen / Green Ammonia production plant can be set up in any of the Manufacturing Zones.
• Manufacturers of Green Hydrogen / Green Ammonia shall be allowed to set up bunkers near Ports for storage of Green Ammonia for export / use by shipping. The land for the storage purpose shall be provided by the respective Port Authorities at applicable charges.
• Renewable Energy consumed for the production of Green Hydrogen / Green Ammonia shall count towards RPO compliance of the consuming entity. The renewable energy consumed beyond obligation of the producer shall count towards RPO compliance of the DISCOM in whose area the project is located.
• Distribution licensees may also procure and supply Renewable Energy to the manufacturers of Green Hydrogen / Green Ammonia in their States. In such cases, the Distribution licensee shall only charge the cost of procurement as well as the wheeling charges and a small margin as determined by the State Commission.
• Ministry of New and Renewable Energy (MNRE) will establish a single  portal for all statutory clearances and permissions required for manufacture, transportation, storage and distribution of Green  Hydrogen /Green Ammonia.  The concerned  agencies/authorities  will be requested to provide the clearances and permissions in a time-bound manner, preferably within a period of 30 days from the date of application.
• In order to achieve competitive prices, MNRE may aggregate demand from different sectors and have consolidated bids conducted for procurement of Green Hydrogen/Green Ammonia through any of the designated implementing agencies.

To access the policy document, click here.

Source : Ministry of Power

Related resources

1. Harnessing Green Hydrogen - NITI Aayog report