The Confederation of Indian Industry (CII) urged the government to introduce green hydrogen mandates backed by targeted incentives to accelerate India’s clean energy transition. According to CII, policy-led demand creation is essential to unlock large-scale adoption and support the country’s decarbonisation goals.
Hard-to-Abate Sectors Poised for Early Adoption
CII highlighted that industries currently dependent on grey hydrogen, including oil refining, fertilisers, and natural gas, are well positioned to shift to green hydrogen at scale. However, the industry body cautioned that cost competitiveness remains a critical challenge. “The price gap between green and grey hydrogen is a major barrier. Mandates supported by incentives can bridge this gap by providing demand certainty and enabling faster cost reductions through economies of scale,” CII said.
Phased Mandates and Cost-Offset Mechanisms Proposed
To address cost concerns, CII recommended phased adoption mandates combined with cost-offset mechanisms. These include carbon credit allocations for emissions reductions, cross-subsidisation in the fertiliser sector through blending cheaper natural gas with green hydrogen, and viability gap funding to ease the financial burden on consumers and industry. Together, these measures would help accelerate adoption while managing near-term cost pressures.
Public Procurement Can Anchor Early Demand
CII also proposed leveraging public infrastructure projects—including housing, railways, ports, and bridges—to create predictable demand for green hydrogen-based materials. Mandating that 10–15% of inputs such as steel, cement, and ammonia used in government projects come from green hydrogen routes could significantly lower production costs through scale and reduce investment risks for producers.
Green Hydrogen Clusters to Support Industry and MSMEs
To widen adoption, CII recommended developing industrial green hydrogen clusters with shared infrastructure. Such clusters would support MSMEs in sectors like ceramics, glass, and chemicals, which currently face high grey hydrogen costs and limited access to clean alternatives.
Strengthening Export Competitiveness
Looking beyond domestic markets, CII called for bilateral trade agreements with countries including Germany, the Netherlands, Japan, and South Korea to boost green hydrogen exports. Key recommendations include harmonising Indian standards with global norms, simplifying trade documentation, and granting green hydrogen products ‘deemed export’ status to enable access to export-linked incentives.
Mobilising Capital Through Financial Innovation
Finally, CII emphasised the need to attract private investment into early-stage green hydrogen projects. As reported by knnindia.co.in, developing innovative financial instruments and risk-mitigation mechanisms would make Indian projects more globally competitive and accelerate commercial adoption.
