The BGA India Team, led by Managing Director Ratan Shrivastava, wrote an update to clients about new policy guidelines concerning India’s green hydrogen production and electrolyzer manufacturing incentive schemes.

Context

  • India’s Ministry of New and Renewable Energy (MNRE) on June 29 released guidelines on green hydrogen production and electrolyzer manufacturing incentive schemes to consolidate India’s green hydrogen policy framework. The guidelines build upon previous policy announcements, such as the 2021 National Hydrogen Mission and the 2022 National Green Hydrogen Mission (NGHM), which sets targets and establishes initiatives and a governance framework to make India a global hub for the production, use and export of green hydrogen.
  • Green hydrogen has become an important part of India’s renewable energy policy as the government seeks to produce 5 million metric tons of annual green hydrogen by 2030, become energy independent by 2047 and achieve net-zero emissions by 2070. Green hydrogen will facilitate India’s transition to a low-carbon economy and reduce its dependence on fossil fuel imports. The government has allocated INR 350 billion ($4.3 billion) for priority capital investments that advance energy-transition and net-zero objectives.

Significance

  • Research and development are key components of India’s green hydrogen plans as the government creates mechanisms to foster domestic and international collaboration. The MNRE launched a draft road map with research plans to develop new technology, including safe and cost-effective green hydrogen storage methods. India has established bilateral mechanisms with the United States, Australia and France to drive research, commercial and trade opportunities and leverage multilateral platforms, such as its Group of 20 presidency, to highlight its green hydrogen initiatives. India and the United States released a comprehensive joint statement announcing bilateral agreements in key strategic and economic sectors.
  • The transport and storage of green hydrogen are major challenges and will require government capital expenditure toward infrastructure development to reduce costs. Using existing natural gas pipelines and building storage capacity with tanks and geological formations are alternatives the government will likely explore. These deals are expected to strengthen investment, trade and security and boost India’s indigenous defense capabilities.

Implications

  • India’s green hydrogen space will likely see major investments as the government seeks to create an enabling policy environment and green hydrogen financing gains salience over the next decade. The government is reaching out to countries bilaterally and through multilateral forums to foster collaboration, innovation and financing in the green hydrogen space. With announcements expected on demand mandates, transportation and storage, businesses will likely gain a first-mover advantage by engaging India’s green hydrogen and energy transition stakeholders.
  • India’s new guidelines on green hydrogen production and electrolyzer manufacturing incentive schemes position the country to become a leading producer and exporter of green hydrogen. Companies, businesses and industries will likely benefit as first movers with the help of government subsidies, incentives and policy support. Indian public and private sector entities have announced production targets, and public sector entities are working on pilot projects and memorandums of understanding to develop green hydrogen production capacity. Given the government’s policy thrust, companies, businesses and industries will likely benefit as first movers with the help of government subsidies, incentives and policy support.

We will keep you updated on relevant developments. If you have questions or comments, please contact BGA India Managing Director Ratan Shrivastava at ratan@bowergroupasia.com.

Best regards,

BGA India Team

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Managing Director

Ratan is a senior executive and management consulting professional who has a proven track record in government, consulting and industry across India and Southeast Asia, with a wide network across stakeholders. He has been instrumental in developing and implementing growth strategies for both the public and private sector and has led diverse teams to secure new market opportunities. Prior to joining BGA, Ratan was at KPMG India where he helped the integration of the small and medium industry clusters, with the domestic and global aerospace, defense and space supply chains. He also served as an advisor at the Federation of ... Read More