India has witnessed a steady rise in energy demand over the past few years. Meeting this demand in line with net zero targets while ensuring energy security has been a focus area of various stakeholders. In line with this, various alternative sources are being utilised to meet these demands, including the blending of alternative fuels to reduce emissions, the use of natural gas and the deployment of cleaner production methods for hydrogen.
Liquefied natural gas (LNG) and green hydrogen have garnered particular attention as pivotal elements of India’s energy transition. The country continues to be one of the top importers of LNG, with applications ranging across industries, including the transport sector. Concurrently, robust progress has been made in the green hydrogen segment, reflecting its significant potential for facilitating sustainable and low-carbon emission operations.
LNG Current capacity
The country currently imports LNG through eight operational onshore LNG terminals. These are two terminals by Petronet LNG Limited (at Dahej and Kochi), and one each of Shell Energy India Private Limited (at Hazira), Konkan LNG Limited (at Dabhol), Indian Oil LNG Private Limited (at Ennore), GSPC LNG Limited (at Mundra), Adani Total Private Limited (at Dhamra), and the most recently commissioned terminal by HPCL LNG Limited (at Chhara). As of July 1, 2025, these terminals had a total capacity of 52.7 million metric tonnes per annum (mmtpa). Capacity utilisation rates, however, vary across these terminals, from 89.9 per cent at the Petronet LNG terminal at Dahej to 17.6 per cent at the GSPC terminal at Mundra and 4 per cent at the new HPCL terminal. During 2024-25, LNG imports reached 35,720 million standard cubic metres (mmscm), marking a 12 per cent rise from 2023-24, while imports for April-June 2025 stood at 8,778 mmscm. Notably, June 2025 alone recorded a 26 per cent rise in imports compared to the previous year.
Recent developments
With the rising demand for natural gas, India has experienced a notable increase in LNG imports, encouraging industry players to expand their import capabilities through strategic long-term agreements. Recently, GAIL (India) Limited and Vitol Asia Private Limited formalised a long-term sales and purchase agreement, following an earlier term sheet signed in January 2024. The move would see around 1 mmtpa of LNG being delivered by Vitol to GAIL for 10 years starting in 2026. Additionally, in February 2025, ADNOC Gas signed a sales purchase agreement with Indian Oil Corporation Limited (IOCL), building on a prior heads of agreement, which will see up to 1.2 million tonnes per annum (mtpa) of LNG delivered to India, over a 14-year period beginning in 2026. Amidst growing expansion and import initiatives, promoting competition between entities and ensuring sufficient infrastructure availability have become increasingly important. In light of this, the Petroleum and Natural Gas Regulatory Board (PNGRB) has introduced the Registration for Establishing and Operating Liquefied Natural Gas Terminals Regulations, 2025. Under these new regulations, any plans for establishing new LNG terminals or expanding the existing ones would now require prior approval from the PNGRB.
LNG for long-haul trucking
LNG is gaining momentum as the preferred fuel for long-haul freight transportation, essentially for reducing emissions relative to diesel. Given that long-haul trucking accounts for a substantial share of road-based emissions, LNG offers the benefit of lower pollution compared to diesel. Leading logistics companies are increasingly recognising and leveraging LNG’s potential as a viable substitute for diesel in long-haul transportation. While compressed natural gas (CNG) trucks have also gained traction, the deployment is not viable for long-range travel, hence putting forth a use case for LNG.
According to the PNGRB, the use of LNG trucks in India is projected to increase, reaching 30,000-50,000 in number by 2030. In anticipation of this demand, companies are gearing up to set up LNG stations across the country. THINK Gas recently launched three LNG fuelling hubs, with two located in Andhra Pradesh and one in Tamil Nadu. These hubs are expected to commence operations in September 2025. In November 2024, BPCL inaugurated its first LNG fuelling station at Ghar Outlet BP-Avinashi in Tamil Nadu.
Challenges
Although the use of LNG presents many advantages, its large-scale adoption faces several challenges. Further, LNG consumption is import-dependent, making prices vulnerable to geopolitical disruptions. Moreover, there are concerns that LNG may face increased competition from other energy sources. Other challenges include limited infrastructure, high capital costs, and the underutilisation of existing infrastructure.
Green hydrogen
The green hydrogen segment has been one of the focus areas in the government’s efforts towards decarbonisation. The launch of the National Green Hydrogen Mission has been a notable step in this direction. The mission objectives are to establish India as a hub for its production, consumption, and export. It envisions producing 5 mmt of green hydrogen by 2030, installing an electrolyser capacity of 60-100 GW, and having in place 125 GW of additional renewable energy capacity for hydrogen production, among other things. The mission expects to see a cumulative carbon abatement of 50 mmt. As of May 2025, the country had allocated a production capacity of 862,000 tonnes per annum (tpa) to 19 companies. Further, 15 firms have been awarded an annual electrolyser manufacturing capacity of 3,000 MW. India plans to become a major global green hydrogen exporter by 2030.
Another development was the launch of the Green Hydrogen Certification Scheme of India (GHCI) by the government in April 2025. This scheme marks an important step towards formulating a robust framework for certifying green hydrogen production while also focusing on transparency, traceability, and market credibility.
These developments highlight positive advancements in the segment. In January 2025, the foundation stone for the first green hydrogen hub was laid for NTPC Green Energy Limited’s Green hydrogen hub project at Pudimadaka in Andhra Pradesh. The facility will have a production capacity of 1,500 tonnes per day (tpd) of green hydrogen, 7,500 tpd of green hydrogen derivatives, and a renewable energy capacity of 20 GW. It will target the export market. Adani New Industries Limited recently commissioned the country’s first off-grid green hydrogen pilot plant at Kutch in Gujarat. The 5 MW plant is entirely powered by solar energy, has an integrated battery energy storage system (BESS), and also features a fully automated closed-loop electrolyser.
Further, the Ministry of Ports, Shipping and Waterways (MoPSW) has identified Kandla, Paradip and Tuticorin ports to be developed as green hydrogen hubs.
Green hydrogen in transportation
Green hydrogen has also made headway into the transport sector, targeted towards reducing fossil fuel dependence and ensuring energy security. In line with this, the Ministry of New and Renewable Energy sanctioned five pilot projects in the sector. The trials would see the deployment of 37 buses and trucks running on 10 routes across the country, and nine hydrogen refuelling stations. Moreover, the first fleet of hydrogen-powered truck trials, comprising three hydrogen-powered heavy-duty trucks, were flagged off at New Delhi in March 2025. In line with this, IOCL is setting up hydrogen refuelling stations at Faridabad, Vadodara, Pune and Balasore.
Natural gas blending
Various pilot projects have been set up for the blending of green hydrogen with natural gas, marking an important step towards decarbonising the energy mix. For instance, Adani Total Gas Limited started blending 2.2-2.3 per cent of green hydrogen in the piped natural gas (PNG) pipeline at Shantigram, Ahmedabad. Moreover, GAIL was among the first few companies to carry out hydrogen blending into the natural gas pipeline at Indore.
In March 2025, Hero Future Energies commissioned a green hydrogen facility for Rockman Industries. The facility is capable of blending green hydrogen with both PNG (3 per cent) and LPG (up to 10 per cent), and features a 300 kW PEM electrolyser powered by a 1.1 MWp rooftop solar plant, with the output targeted for industrial furnace applications.
In sum
India has made significant progress in both the LNG and green hydrogen segments in the past few years. However, challenges persist over concerns about the long-term deployment of LNG as a replacement for coal, and its broader adoption as an alternative fuel, primarily due to issues concerning capital costs, prices, and infrastructure challenges. Addressing these bottlenecks will be crucial for India to achieve its goal of increasing the share of natural gas in the overall energy mix to 15 per cent by 2030. While the green hydrogen ecosystem continues to benefit from robust policy support and applications across sectors, challenges remain. According to industry reports, repurposing existing LNG terminals for the export of green hydrogen derivatives, such as ammonia, could result in significant cost savings, in turn, supporting India’s broader decarbonisation targets.
