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New Hydrogen Policy: Phase 1 to focus on ease of manufacturing green hydrogen; India can be next export hub, says power minister

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New Hydrogen Policy: Phase 1 to focus on ease of manufacturing green hydrogen; India can be next export hub, says power minister


The power minister said there is emerging demand for green hydrogen from different countries. He urged India Inc to take up manufacturing to make India the next hub for export of green hydrogen.

Power Minister RK Singh on Thursday said the country plans to manufacture 5 million tonnes of green hydrogen by 2030 while unveiling the first part of the policy on the same. With the green hydrogen policy, the country seeks to meet its climate targets and turn itself into a green hydrogen export hub.

In an exclusive interview with CNBC-TV18 after the announcement, Singh said the government would encourage competition.
"Phase one of the policy, which we released is what we can do at the level of the Ministry of Power and Ministry of New and Renewable Energy (MNRE) for ease of manufacturing hydrogen--green hydrogen. So, we applied our mind and these are the things which we have decided to do," Singh said.
The policy
The National Hydrogen Mission was launched in 2021 to draw up a road map for using hydrogen as an energy source. The initiative has the potential of transforming transportation.
Under the first phase, the government has offered a waiver of inter-state transmission charges of renewable energy for a period of 25 years for manufacturers of green hydrogen and green ammonia for projects commissioned before June 30, 2025. Renewable energy is used in the production of green hydrogen and ammonia.
The government wants to bring down the cost of green hydrogen to $1 (Rs 75) per kg from the current $3-6.5.
'Facilitating India Inc'
The power minister urged India Inc to take up manufacturing and promised them adequate government support.
"I aim to have a meeting with all the leading industries of the country and propose to tell them that our decision (on the policy) will make life very easy for them--free transmission for 25 years, open access without the additional surcharge, and no cross-subsidy and banking, etc.," Singh said.
Minister says demand is strong
He said there was strong demand from other nations.
"I propose to them to start manufacturing green hydrogen because demand is now coming from different countries. Different countries want to sign on and enter into agreements for the procurement of green hydrogen and we want those contracts to be signed by Indian companies," Singh said.
On this note, Singh also outlined the government's plan to make India the next hub for export of green hydrogen.
'Want to become an early startup'
"The minister of shipping has agreed to provide bunkering facilities at the ports for storing green hydrogen and green ammonia, for ease of refuelling. With bunkers,  it will be simpler for exporting green hydrogen to different countries. Now, our target is not limited, it is virtually limitless, we want to emerge as the next hub for the export of green energy, and so, we want to become an early startup," he said.
Singh further said the manufacturers will be allowed to set up capacity themselves or procure it from the energy exchange. He said transmission cost will be zero--the government is giving it for free--while the cost of energy will be very low. "Those who want to manufacture green hydrogen will need renewable energy capacity so they can set it up by themselves," Singh said. 
Singh emphasised the need for open access to allow transmission through states and said the Centre will soon set up a centralised portal For applications. Singh--who said the benefit of RPO will be available to states--said several companies have already expressed interest and said he is confident that the sector will take off soon.
Industry reactions
Rajat Seksaria, CEO, ACME Group, told CNBC-TV18 he was glad some industry demands had been accepted for Phase 1, which would help players plan their commercial structures.
"But the government must come out with its mandate soon. Phase 2 is the real part of the hydrogen policy," Seksaria said. "We don't know what the exact economics will be as we are currently dependent on natural gas. Government support is necessary for hydrogen purchase options. Have asked for a PLI equitably policy for hydrogen as a finished product."
Debasish Mishra, partner, Deloitte India, said the policy would help players organise themselves with respect to production, logistics, and investments.
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