What’s the story
India’s hydrogen demand is expected to double to nearly 12 million tons per annum (mtpa) by 2030, a Nuvama Institutional Equities report has said.
The increase will be mainly driven by the fertilizer, refining, and petrochemical sectors.
The report predicts that fertilizers will account for over half of this demand at around 6.1 mtpa by 2030 while refineries could require some 4.5 mtpa.
Petrochemicals and future sectors driving hydrogen demand
The petrochemical sector could contribute another 1.3 mtpa as new capacities come online.
The report also highlights that green hydrogen (GH2) could be adopted in steel production, long-haul heavy-duty transportation, shipping, and power generation in the long run.
This potential expansion of GH2 consumption sectors indicates a growing trend toward sustainable energy solutions across various industries.
National Green Hydrogen Mission: A catalyst for growth
India’s push toward a hydrogen-fueled future is being led by the National Green Hydrogen Mission, which aims to create infrastructure for green hydrogen.
The mission has an outlay of around ₹197 billion ($2.4 billion), most of which is linked to the SIGHT scheme that promotes green hydrogen production and consumption as well as electrolyzer manufacturing.
State-level initiatives complement national efforts
Since the introduction of India’s green hydrogen policy in 2022 and the mission in early 2023, 13 states have launched their own support schemes.
These range from power transmission waivers to subsidies, interest support, training programs, and assistance with land and state taxes.
Together, these central and state initiatives could create a support pool of nearly $61 billion for the green hydrogen sector.
Cost reduction remains a key challenge
Despite the strong policy support, cost remains a major hurdle for green hydrogen adoption.
Currently, green hydrogen costs $3.5-4 per kg while gray hydrogen is priced at around $2.2 per kg.
The report suggests that policy measures and market improvements could bring down green hydrogen costs by as much as $1.9 per kg, with waivers on power banking/open access charges potentially cutting nearly one-fourth of the cost alone.
