IH2A seeks expanded Union Budget support for National Green Hydrogen Mission, Creation of National H2 Transition and Development Fund

Proposes USD 5 Bn Hydrogen Transition and Development Fund for Large-Scale Projects and H2 Hubs, Supply Chain, Sectoral H2 Transition Plans, National Skilling and H2 Infrastructure Development

NEW DELHI/ MUMBAI, January 23 2024: The India Hydrogen Alliance (“IH2A”) has submitted a proposal to the Ministry of Finance, Government of India, for increasing budgetary support for the National Green Hydrogen Mission (NGHM) and creating a USD 5 bn National Hydrogen Transition and Development Fund, similar to the EU Green Hydrogen Fund, to support large-scale hydrogen projects and H2 hub development, H2 supply chains beyond electrolyser manufacturing, sectoral hydrogen transition plans, skilling and hydrogen infrastructure development in the country.

IH2A’s proposed National Hydrogen Transition Funding mechanism is akin to the EU Green Hydrogen Fund which supports green hydrogen projects of national importance and hydrogen hubs. IH2A has recommended five areas that the proposed National Hydrogen Transition and Development Fund should support:

  1. Co-development of at least 5 large National H2 Hubs (beyond the 2 Hubs planned in the existing NGHM), together with state government and project developers (both private and state-owned); offtake-linked incentives for Anchor Industrial Offtake entities and Contracts-for-Difference (CfD) funding.
  2. Provide CAPEX support for greenfield hydrogen infrastructure such as H2 pipelines and storage facilities that will lower the cost of green hydrogen supply to offtake users.
  3. Support state governments in developing domestic hydrogen equipment and supply chain equipment manufacturing clusters, for Balance of Plant (BoP) Equipment (beyond Electrolysers)
  4. Support sectoral hydrogen transition plan with CAPEX incentives and offtake incentives, in Steel and Chemicals, in line with the SIGHT Mode 2 guidelines for Fertilizer and Refinery sectors.
  5. Build a National Hydrogen Transition Skilling programme to create more hydrogen engineering design and engineering services professionals, working with engineering colleges and research institutions

Speaking about IH2A’s submission to the Government of India for greater budgetary support, Jillian Evanko, President and CEO, Chart Industries (NYSE: GTLS) and Founding Member, IH2A, said, “We are very pleased to see the Government of India taking the first step towards demand aggregation and offtake incentives in fertilizer and refinery sectors, with the Mode 2A and 2B Guidelines under the NGHM SIGHT Scheme. The time is right to raise public funding to match the needs of a large economy that has high ambitions for accelerating the hydrogen transition. A USD 5 bn India Hydrogen Transition Fund would put India at par with the EU, from public funding perspective, which is still short of India’s real requirement as the entire value chain needs to be developed in the country. India needs more hydrogen hubs, accelerated sectoral decarbonization in steel and chemicals, hydrogen infrastructure and domestic equipment manufacturing and specialized skill development. These should be five key priorities for developing the hydrogen economy in India in 2024. We look forward to working with all stakeholders to making this a reality.”

On funding the National Hydrogen Transition and Development Fund, Amrit Singh Deo, Secretariat Lead, India Hydrogen Alliance (IH2A), said, “A USD 5 bn hydrogen transition fund can be put together by pooling multilateral funding and government energy transition sources, such as allocating a proportion from energy transition fund constituted by Ministry of Petroleum and Natural Gas, and tapping sovereign green bonds.”

Last year, in June, IH2A submitted a plan to develop five USD 5 bn Green Hydrogen Hubs to the Government of India, as economically viable projects. Subsequently, the IH2A Hydrogen Equipment Manufacturing, Exports and Services report estimated a USD 50 bn domestic manufacturing opportunity for India, over 2024-2030 period, on the conservative side, being deployed over 135 domestic hydrogen projects, producing 1 MT green hydrogen production (a fifth of the 5 MMT national target as per the National Green Hydrogen Mission). Both reports are available on the IH2A website.


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