Ministry of New and Renewable Energy (MNRE) Unveils Bold Initiative to Boost Green Hydrogen Production

Ministry of New and Renewable Energy (MNRE) Unveils Bold Initiative to Boost Green Hydrogen Production

The Ministry of New and Renewable Energy (MNRE) in India has unveiled guidelines and incentives to promote the adoption of green hydrogen as part of the National Green Hydrogen Mission. The initiative allocates Rs 17,490 crore to the Strategic Interventions for Green Hydrogen Transition (SIGHT) program, aimed at boosting domestic electrolyser manufacturing and green hydrogen production. These incentives are geared towards facilitating cost reduction and rapid expansion within the sector.

Implemented under Mode-2B, an approach adopted by MNRE for the SIGHT scheme, the strategy involves aggregating demand and soliciting bids for green hydrogen and its derivatives through a competitive selection process to achieve the lowest cost. Tranche I of Mode 2B allows for a bidding capacity of 200,000 million tonnes per annum.

The execution of the scheme will be entrusted to agencies nominated by the Ministry of Petroleum and Natural Gas (MoPNG), primarily oil and gas companies, under the guidance of the Centre for High Technology (CHT). Oil and gas entities will seek competitive bids for either single or multiple refineries, with CHT providing secretarial, managerial, and implementation support. Green hydrogen is crucial for removing sulfur content in crude oil to produce petrol and diesel.

Indian Oil Corporation has previously announced plans to convert 50% of its grey hydrogen to green hydrogen by 2030, establishing green hydrogen plants in all its refineries. Similarly, Hindustan Petroleum Corporation is reportedly constructing a 370-tonnes-per-annum green hydrogen plant at its Visakhapatnam refinery.

To qualify for incentives, bidders must adhere to the criteria outlined in the ‘National Green Hydrogen Standard’ as notified by MNRE. The scheme offers a direct incentive over three years from the start of production and supply, with rates of Rs 50/kg of green hydrogen in the first year, Rs 40/kg in the second year, and Rs 30/kg in the third year.

The scheme document outlines, “The bidder quoting the lowest price of supply will be allocated its admissible capacity first. Subsequently, the bidder quoting the next lowest price of supply will be allocated its admissible capacity, continuing until the total available capacity is exhausted.”

Moreover, the document specifies that the net worth of the bidder should be equal to or greater than Rs 15 crore per thousand MT per annum of quoted production and supply capacity of green hydrogen.

A scheme monitoring committee, co-chaired by the secretary of MoPNG, secretary of MNRE, mission director of the National Green Hydrogen Mission, and other experts, will periodically review the implementation status and performance of capacities awarded or established under the scheme. The committee will also facilitate and recommend measures to address challenges.

A recent report by the World Economic Forum titled “Green Hydrogen: Enabling Measures Roadmap for Adoption in India” highlighted limited on-the-ground traction for green hydrogen and noted that key players are mostly adopting a ‘wait-and-watch’ approach. Despite global efforts to pursue green hydrogen to combat emissions, concerns about potential greenwashing, land-use conflicts, and water resource issues have been raised by environmental organizations.