Short : India may only reach 10% of its federal green hydrogen target by 2030, highlighting challenges in infrastructure, technology adoption, and investment. To enhance progress, significant policy support and collaboration between public and private sectors are essential for unlocking green hydrogen’s potential as a sustainable energy source.
Detail : Analysis by BloombergNEF shows that most investment proposals are yet to reach the stage of signing binding offtake contracts.
India’s green hydrogen mission has kicked off, but the country may find it hard to meet its production targets as going by the current rate of progress, India is on track to meet only 10% of its stated goal, an analysis by BloombergNEF shows.
According to the analysis, India has so far tendered about 1.1 metric tonnes equivalent of green hydrogen production capacity—over a fifth of the 2030 federal target.
But most investment proposals are yet to reach the binding offtake contracts stage. Coupled with the lack of green hydrogen consumption mandates in industries, BNEF forecasts the clean fuel’s production capacity to reach only 0.5 Mt/year by 2030, based on projects’ progress so far.
The government has also auctioned 3 gigawatts (GW) of annual electrolyser manufacturing capacity. Most of the federal tenders have no sector-specific end-use, giving developers significant flexibility to either sell their fuel locally or export it abroad, while also allowing them to explore different locations in the country to set up their projects, it noted.
On the cost side, the analysis found that the current green hydrogen production costs in India range around $3–5 per kilogram (kg), and federal subsidies can reduce these costs by 70 cents. Upon further utilising the full support offered by Uttar Pradesh, which offers the most generous incentives among all states, green hydrogen production costs can reach $2/kg.
“At these levels, green hydrogen competes with $1.9-2.4/kg for grey hydrogen on an economic basis to be used in petroleum refineries. Most offtake agreements signed—binding or unbinding—rely on the export of the clean fuel from India to advanced economies such as Europe and Japan. In the absence of strong local demand, the export route will help green hydrogen producers build economies of scale and lower their cost of production until the domestic market matures,” it further said.
