Government plans purchase obligation for green hydrogen, PLI for electrolysers

The union government plans to bring in mandatory green hydrogen purchase obligation for the industry and production-linked incentive scheme for the manufacture of electrolysers.

The government has drawn up a cabinet note for mandating the use of green-hydrogen in industries such as fertilisers and refining. The steel sector may also be roped in later. It is estimated that it the mandatory purchase was fixed at 10 per cent of hydrogen consumption, then 8,800 MW of electrolyser capacity would be needed. At present, there are no electrolyser manufacturers in India. To encourage the manufacture of electrolysers in India, the government proposes to extend the PLI scheme. The PLI scheme can begin with manufacturing capacity of around 10,000 MW which may require investments between Rs 150-200 billion. The government also proposes to come up with viability gap funding (VGF) for green hydrogen in heavy mobility.

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