New Delhi / Mumbai, January 22 2025: The India Hydrogen Alliance (IH2A), an industry coalition of global and Indian companies committed to the creation of a green hydrogen economy in India, has submitted recommendation to the Government of India to increase budgetary support for the National Green Hydrogen Mission (NGHM), with an additional USD 2.5 bn allocation in addition to the USD 2.3 bn already allocated to NGHM. The IH2A recommendation is for additional funds for supporting demand side incentives, capital expenditures for building hydrogen infrastructure and hydrogen hub development.
The IH2A submission to the Government of India highlight industry concerns about slow project
development and the lack of offtake agreement for green hydrogen. To address these concerns, IH2A has
recommended the following:
1. Demand Side Incentives to offtake entities in end-use industrial sectors, specifically in Refineries, Fertilizer, Steel, Chemicals and Heavy-Duty Transport sector.
2. Capex subsidies to project developers building shared Hydrogen Infrastructure at Hydrogen Hubs across India.
3. Establishment of Green Hydrogen Development Corporations (GHDCs), to support large-scale green hydrogen project development in the states, and help build Green Hydrogen Hub Development with Shared Hydrogen Infrastructure.
4. The public finance and funding support for development of five more National Hydrogen Hubs incollaboration with state government and project developers (both private and state owned).
Commenting on the IH2A recommendation on increasing budgetary support for the National Green Hydrogen Mission, Amrit Singh Deo, Secretariat Lead, IH2A, said, “Potential green hydrogen offtake entities are holding back on committing to long-term offtake due to high price of Green Hydrogen. We are proposing increasing the budgetary allocation for NGHM by an additional USD 2.5 bn. This increased funding should help provide offtake-linked demand side incentives to industrial entities in the refinery, fertilizer, steel and chemical sectors, as well as in heavy duty transport sectors. This is expected to increase development of more green hydrogen projects and ensure India meets its Green Hydrogen ambitions and 2030 targets. The recommendations made by IH2A are intended to support growth and development of India’s green hydrogen economy.”
About India H2 Alliance (IH2A)
The India H2 Alliance is an industry coalition of global and Indian companies committed to the creation of a hydrogen value-chain and economy in India. IH2A collaborates with private sector partners, the government and the public to ensure that costs of hydrogen production are brought down, a local supply chain for hydrogen and related applications grows and India is able to achieve its net-zero carbon ambitions by developing a hydrogen economy that complements its national renewable energy and EV/battery-technology plans. More information on IH2A and its activities, is available at www.IH2A.com.
IH2A SUBMISSION TO MINISTRY OF FINANCE, GOVERNMENT OF INDIA INCREASING BUDGETARY ALLOCATION FOR NGHM, TOWARDS DEMAND-SIDE INCENTIVES & CAPEX SUPPORT FOR HYDROGEN INFRASTRUCTURE IN H2 HUBS, IN UNION BUDGET FOR 2025-26.
The India Hydrogen Alliance (IH2A) on behalf of the industry, members and partners, would like to request for increasing budgetary allocation to the National Green Hydrogen Mission (NGHM), with an additional allocation of USD 2.5 bn for demand side incentives and Hydrogen Hub development.
BACKGROUND
India needs combined investments of USD 25 bn+, from public and private sectors, to create a domestic hydrogen supply chain with installed electrolyser capacity of 25 GW producing 5 MT of Green Hydrogen by 2030. Coordinated public-private actions are required for developing large-scale commercial hydrogen projects – matching supply with guaranteed long-term offtake. Most announced green hydrogen projects have not been able to reach Final Investment Decision (FID) stage due to lack of offtake agreements, slowing project development. The National Green Hydrogen Mission (NGHM) initial allocation of USD 2.3 bn and SIGHT Schemes (Mode 1, 2A and 2B) has focused primarily on supply side incentives to promote green hydrogen and electrolyser production.
INDUSTRY CONCERNS
There is a concern amongst industry players and green hydrogen project developers that India’s Green Hydrogen ambitions and 2030 targets are likely to be missed, without:
a) Demand side incentives similar to those provided as supply-side incentives, provided by the USD 2.3 bn SIGHT Scheme of the NGHM, to support green hydrogen offtake in end-use industries, specifically
in Refineries, Fertilizer, Steel and Chemicals sector. Potential offtake entities are holding back on committing long-term offtake due to the high price of Green Hydrogen and seeking offtake-linked incentives. IH2A has made submissions to the Government of India earlier, making the case for providing public finance support for demand-side incentives @ USD 2/ kg to industrial offtake entities in Refineries, Fertilizer, Steel and Chemical sectors.
b) Public finance support for creation of Shared Hydrogen Infrastructure at Green Hydrogen Hubs, in the form of CAPEX subsidies. Creation of shared hydrogen infrastructure is critical for large scale Green Hydrogen Hub Development and to attract project developers to build Green Hydrogen Hubs.
INDUSTRY SUBMISSION TO THE GOVERNMENT OF INDIA
IH2A, on behalf of its industry members, would like to make the following submissions to the Ministry of New and Renewable Energy (MNRE) and the Ministry of Finance, Government of India:
1. Ministry of Finance (MoF) and Ministry of New and Renewable Energy (MNRE), Govt of India,
should consider increasing budgetary support for National Green Hydrogen Mission (NGHM)
in Union Budget 2025-26, and allocate an additional USD 2.5 bn to the NGHM towards:
a. Demand Side Incentives to offtake entities in end-use industrial sectors, specifically in Refineries, Fertilizer, Steel, Chemicals and Heavy-Duty Transport sector; and
b. CAPEX subsidies to project developers building Shared Hydrogen Infrastructure in Hydrogen Hubs in India.
2. Support creation of Green Hydrogen Development Corporations (GHDCs), to support large
scale green hydrogen project development in the states, and help build Green Hydrogen Hub
Development with Shared Hydrogen Infrastructure.
3. Public finance and funding support for an additional Five National Hydrogen Hubs (beyond the
two Hydrogen Hubs planned under the existing NGHM plan), together with state government
and project developers (both private and state-owned).