The Government of Bihar has set a target of producing 100,000 metric tons of green hydrogen and green ammonia by 2031. To achieve this, Bihar plans to develop approximately 1 GW of electrolyzer capacity and 2.5 GW of renewable energy capacity linked to hydrogen projects.
In its Green Hydrogen Policy 2026, Bihar seeks to support decarbonization, enhance energy security, and promote the use of renewable energy across sectors such as fertilizers, refineries, transport, and energy storage.
The policy will be valid for five years and will cover the entire value chain, including production, storage, transportation, and consumption of green hydrogen, as well as electrolyzer manufacturing.
It aims to establish green hydrogen hubs, industrial clusters, and export-oriented infrastructure to position the state as a preferred destination for hydrogen production and related industries.
The policy aims to attract nearly ₹160 billion (~$1.71 billion) in investment over the next five years.
The government had announced the draft Green Hydrogen Policy in October last year.
To improve the ease of doing business, the state has proposed a single-window clearance mechanism, along with fast-track approvals for environmental, industrial, and grid-connectivity requirements.
The government will support investors through land allocation, water supply, and transmission infrastructure.
The Bihar Renewable Energy Development Agency (BREDA) will act as the nodal agency responsible for implementing the policy, facilitating project approvals, and coordinating with stakeholders.
Eligibility for Setting Up Green Hydrogen/Green Ammonia Projects
All green hydrogen/green ammonia projects set up within the state will be eligible for benefits under this policy.
Projects must source renewable energy from any one of the following sources:
- A captive route from a co-located or differently located renewable energy project within the state.
- Third-party mode under open access within the state.
- Distribution licensee
- Power exchange
Land Availability
Government land will be made available in accordance with the existing state government policy. If the land is not used for the establishment of green hydrogen or green ammonia projects within six months of the allotment date, the State Empowered Committee will initiate a review, and if the Committee recommends returning the land, it will be returned to the government mandatorily.
Incentives
The policy offers a range of financial incentives to encourage investment.
These include a 10% capital subsidy for electrolyzers and associated infrastructure, capped at ₹10 million (~$106,555)/MW, with eligibility limits of 5 MW per project at a single location and 10 MW per beneficiary.
Additional incentives will be provided for biomass-based hydrogen projects, hydrogen refueling stations, and the adoption of hydrogen-powered vehicles, with support of up to ₹2.5 million (~$26,638)/vehicle for initial deployments for the first 50 green hydrogen-based passenger buses to BSRTC and city municipal corporations.
Industries will receive a 5% reimbursement for procuring green hydrogen or ammonia from manufacturing units based in Bihar for five years.
The developers will be eligible for 20% of the sanctioned production-linked incentives, subject to an overall cap of ₹50 million (~$532,775)/project.
In terms of regulatory and fiscal support, the policy provides multiple exemptions and benefits, including an exemption from the electricity duty, SGST reimbursement, a waiver of transmission and wheeling charges for renewable energy used in hydrogen production, and exemptions from stamp duty and land conversion charges. Projects will also benefit from open-access facilitation, energy-banking provisions, and must-run status.
Additionally, green hydrogen projects will be classified under the ‘White Category,’ simplifying environmental clearances and reducing compliance requirements.
The policy places strong emphasis on research and development, innovation, and skill development, aiming to reduce the cost of green hydrogen and build local capabilities.
It encourages startups, promotes domestic electrolyzer manufacturing, and supports the creation of R&D centers and pilot projects.
Last October, the Bihar Electricity Regulatory Commission set a target of meeting 43.33% of its energy requirements from renewable sources by the financial year 2030.
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