Globally, in all discussions concerning energy and environmental issues, there is a broad consensus that the ultimate solution lies in augmenting renewable energy production capacity and developing eco-friendly, green projects such as green hydrogen, green ammonia, and green methanol as rapidly as possible. The expectation is that such projects will help reduce harmful emissions, including carbon dioxide, sulphur dioxide, and nitrous oxide, by eliminating reliance on fossil fuels. This view is certainly appropriate given the pressing environmental challenges facing the world today.
Several countries have announced pilot projects for the production of green hydrogen, green ammonia, and green methanol, with considerable attention focused on fine-tuning process technologies and optimising production costs. These initiatives are seen as vital steps towards achieving scalable and economically viable green energy solutions.
Hydrogen is classified based on its source and production process. Brown hydrogen is produced from coal, grey hydrogen from crude oil and natural gas, green hydrogen through water electrolysis using renewable electricity, and blue hydrogen incorporates carbon capture technologies. Currently, the majority of hydrogen produced globally is grey hydrogen, derived from steam reforming of fossil fuels. In China, a significant portion is also produced from coal, classifying it as brown hydrogen.
Eco-friendly green hydrogen has the potential to serve as a crucial source of energy, a transportation fuel, and a feedstock for various products such as green ammonia and green methanol. Its use can significantly reduce emissions and help alleviate the impending crisis posed by global warming, which contributes to natural hazards such as melting ice caps, rising sea levels, and climate variations.
Efforts to fine-tune electrolyser technology for the production of green hydrogen through water electrolysis are underway across the world. Improving electrolyser efficiency is key to reducing the production cost of green hydrogen. Several technologies currently exist for this purpose. The most established is the alkaline water electrolyser (AWE), which uses a potassium hydroxide (KOH) alkaline electrolyte. Another popular technology is the proton exchange membrane electrolyser (PEMEL), known for its ability to integrate with renewable sources and quickly adjust production based on energy availability. Other emerging technologies include the solid oxide electrolyser (SOEL), which employs a ceramic electrolyte, and the anion exchange membrane electrolyser (AEMEL), which seeks to combine the advantages of AWE and PEMEL.
Research and development efforts are increasingly directed towards producing green hydrogen using microbial electrolytic cells, where electrochemically active microbes grow on anodes and oxidise organic matter. The catalytic steps currently require expensive materials such as platinum and iridium. However, it has been reported that the Jawaharlal Nehru Centre for Advanced Scientific Research in India has designed nickel-nickel hydroxide–graphite electrodes with water-splitting capabilities comparable to platinum electrodes, which could significantly reduce costs.
In May 2022, GAIL awarded a contract to build a green hydrogen project using proton exchange membrane electrolyser technology in the Guna district of Madhya Pradesh. In December 2021, GAIL announced plans to commission 10 MW of electrolyser capacity, producing approximately 4.3 tonnes of green hydrogen per day. Indian Oil Corporation is setting up a 100 kW electrolyser plant at its Jorhat oil field in Assam to manufacture green hydrogen. National Thermal Power Corporation (NTPC) is developing a hydrogen-to-electricity project using Bloom Energy’s solid oxide electrolysers and fuel cell technology, with its floating solar plant powering the electrolysers to produce green hydrogen, which will then be converted into carbon-neutral electricity.
In April 2022, Gujarat Industries Power Company Limited (GIPCL) issued an expression of interest to set up 5 MW to 10 MW electrolyser capacity for a green hydrogen project and associated facilities in Gujarat. Indian Railways has also developed a hydrogen-powered train, which will rely on hydrogen produced by a 1 MW polymer electrolyte membrane electrolyser at Jind, Haryana, that generates 430 kg of hydrogen daily.
Several companies in India have announced plans to establish green hydrogen production projects. Reliance Industries declared a capital outlay of ₹75,000 crore over the next three years to develop manufacturing capacities for clean energy technologies, including green hydrogen. In April 2022, ReNew Power announced a joint venture with Indian Oil Corporation and Larsen & Toubro for a green hydrogen project. Indian Oil Corporation aims to produce 70,000 tonnes of green hydrogen annually by 2030. The Adani Group and French oil and gas company TotalEnergies announced a partnership to invest US$50 billion over 10 years in green hydrogen production.
In September 2025, the first green hydrogen pilot project at the VOC Port in Thoothukudi was inaugurated, making it India’s first port to produce green hydrogen. The project, established at a cost of ₹3.87 crore, will supply hydrogen to power streetlights and an electric vehicle charging station within the port colony. Additionally, a 400 kW rooftop solar plant costing ₹1.46 crore was installed, increasing the total rooftop solar capacity at the port to 1.04 MW.
Indian Railways recently announced that a hydrogen-powered train developed at the Integral Coach Factory in Chennai had successfully completed all tests. The train will refill its fuel tanks with hydrogen, where fuel cells convert the hydrogen into electricity to power the motors.
The current production cost of brown hydrogen is approximately USD 2.20 per kilogram, while blue hydrogen can be produced at costs as low as USD 1.50 per kilogram in some regions. In contrast, green hydrogen costs range from USD 3.50 per kilogram and above, with a significant portion of the cost driven by renewable electricity prices. It is reported that around 50% of global hydrogen production is priced below USD 2.50 per kilogram.
In India, grey hydrogen produced from natural gas costs roughly ₹150 to ₹200 per kilogram, depending on the natural gas price. The current production cost of green hydrogen is estimated at around ₹350 to ₹450 per kilogram. Reliance Industries aims to reduce this cost to below USD 1 per kilogram by the end of this decade through advancements in electrolyser technology. However, it remains uncertain to what extent production costs can be lowered to ensure that green hydrogen becomes competitively priced relative to grey hydrogen, which is currently much cheaper.
Several projects are also being proposed for green ammonia and green methanol production in India. Sembcorp plans to produce 200,000 tonnes per annum of green ammonia at Tuticorin for export. ACME Solar, a part of the ACME Group, has commissioned a pilot plant in Bikaner, Rajasthan, integrating green hydrogen and green ammonia production. In June 2022, ACME Group signed a memorandum of understanding with the Karnataka government to develop a solar-to-green hydrogen-to-green ammonia facility worth ₹52,000 crore, targeting 1.2 million tonnes per year of green hydrogen production by 2027.
Gujarat Alkalies and Chemicals Limited signed an MoU with NTPC to establish green ammonia and green methanol plants. A pilot green methanol bunkering and refuelling facility costing ₹35.34 crore, with a capacity of 750 m³, was inaugurated at the VOC Port in Thoothukudi. The production process for anhydrous ammonia involves combining nitrogen and hydrogen under high temperature and pressure using a catalyst to produce ammonia. Currently, almost all ammonia production relies on hydrogen derived from fossil fuels such as natural gas and coal.
India’s annual installed capacity for ammonia stands at 19.8112 million tonnes, while production has increased from 15,195 thousand tonnes in 2020–21 to 19,521.1 thousand tonnes in 2023–24. Despite this growth, India remains a net importer of ammonia, with imports rising from 2,175,803 tonnes in 2023–24 to 2,535,796 tonnes in 2024–25. The average annual CIF price for imported ammonia has been around ₹35,000 per tonne.
Methanol production involves the catalytic conversion of synthesis gas (a mixture of hydrogen and carbon monoxide or carbon dioxide) at high pressure and moderate temperatures. Ammonia-derived hydrogen and nitrogen are used in some synthesis processes. Presently, Assam Petrochem Chemical is the only operational methanol producer in India, as other plants have ceased production due to the lack of price competitiveness against imports. India’s methanol production is approximately 122,240 tonnes per annum, whereas imports have increased from 2,815,925 tonnes in 2022–23 to 3,066,223 tonnes in 2023–24, with an average CIF price of around ₹25 per kilogram.
One of the major uncertainties surrounding green hydrogen projects is the availability of renewable power. Producing one tonne (1,000 kg) of green hydrogen via water electrolysis requires approximately 50 to 55 MWh of electricity, or about 50–55 kWh per kilogram. This electricity must come from renewable sources such as solar and wind power rather than fossil fuels. The Government of India has set a target to achieve 500 GW of installed renewable energy capacity by 2030, having already reached 250 GW. However, the average capacity utilisation is only around 20% due to seasonal and other constraints, meaning that only about 100 GW of renewable power would be effectively available at any time. This capacity will not be sufficient to meet the energy needs of targeted green hydrogen production, and using electricity derived from fossil fuels would negate the eco-friendly intent of such projects.
Another uncertainty is the cost of production. India currently consumes approximately 5 to 6 million tonnes of hydrogen per annum, primarily grey hydrogen. The production cost of green hydrogen is significantly higher than the current market price for grey hydrogen, making it uneconomical for industries to switch to green hydrogen given current price disparities.
The uncertainty extends to green ammonia and methanol projects as well, because producing ammonia and methanol requires large quantities of hydrogen. One tonne of ammonia needs about 0.824 tonnes of hydrogen, while one tonne of methanol requires between 180 and 200 kg of hydrogen, depending on the technology used. Additionally, producing one tonne of methanol may require 0.25 to 0.3 tonnes of ammonia, depending on the process. Since hydrogen costs account for a major share of the production cost for both ammonia and methanol, the higher price of green hydrogen compared to grey hydrogen makes the production of green ammonia and methanol highly uneconomical.
India remains a large importer of both ammonia and methanol, and its green ammonia and methanol projects would need to compete with imported alternatives, which are often produced using cheaper grey hydrogen. Until green hydrogen becomes competitively priced, it is unlikely that these projects will be viable.
Looking ahead, the ecosystem for green ammonia and green methanol will have to wait until the cost of green hydrogen production aligns with that of grey hydrogen. At present, initiating green ammonia and green methanol projects would be premature, akin to putting the cart before the horse. While efforts are ongoing to reduce the cost of green hydrogen, aided by falling renewable electricity prices, it is difficult to predict when or how production costs will be lowered to competitive levels.
Although demand for green hydrogen is not a concern, the cost of production is. The Indian government launched the National Green Hydrogen Mission in January 2023 with an outlay of ₹19,744 crore and a target to produce 5 million tonnes of green hydrogen annually by 2030. Incentives such as single-window clearance for faster project approvals are being offered, but without competitive production costs, these incentives alone will not make green hydrogen projects viable. Moreover, there has been little visible progress on the ground, as investors remain cautious, waiting to see if announcements are backed by active implementation.
It would be prudent not to encourage green ammonia and methanol projects in India until there is a breakthrough in reducing the cost of green hydrogen production. Until then, pursuing such projects would be impractical and financially unsustainable.
