The Confederation of India Industry (CII) has urged the government to introduce Green Hydrogen Mandates to spur demand, and enable a green hydrogen economy. The proposed Green Hydrogen Blending could be introduced for sectors like refining, fertiliser and natural gas with cost-offset mechanisms.
The sectors that use grey hydrogen extensively are best positioned to pioneer large-scale demand for green hydrogen. However, the cost gap between green and grey hydrogen remains substantial. Greening mandates backed by incentives would help overcome this economic barrier, providing certainty to producers and enabling faster cost declines through economies of scale.
The mandates could be phased and accompanied by cost-offset mechanisms such as carbon credit allocations for emissions saved, cross subsidies (particularly in the fertilizer industry, by offering cheaper natural gas if blended with green hydrogen), and viability gap funding to reduce the burden on consumers and industry.
Chandrajit Banerjee, Director General CII said India should take the next leap in promoting green technologies after it marked a record-breaking year in its clean energy journey in 2025, with non-fossil fuel installed capacity rising to 266.78 GW.
“While this represented a 22.6 per cent increase over 2024 with 49.12 GW of new non-fossil capacity being added over 217.62 GW in 2024, the next level of development will come with important technologies like green hydrogen being promoted,” he said.
Public procurement of green hydrogen-embedded products could also be encouraged. For instance, public infrastructure, such as housing, railways, ports, and bridges, represents a significant channel to boost demand for green hydrogen derivatives. Mandating green procurement would establish predictable, anchored demand, lower green product prices through scale, and de-risk investments by giving producers bankable offtake commitments, as per CII.
The Government, according to CII, could support such clusters through land and capital provisioning, common-use infrastructure (like pipelines, storage, CO₂ transport), renewable energy linkages, and cluster-specific incentives. These could be focused in high-potential regions like Gujarat, Maharashtra, Tamil Nadu, and Odisha through Public Private Partnerships (PPPs).
It said that bilateral trade agreements with key importing countries such as Germany, Netherlands, Japan, and South Korea would be important to promoting exports. Moreover, harmonization of Indian certification standards with international frameworks and simplification of trade documentation would be required.
