H2 Roadmap: Government greenlights the National Green Hydrogen Mission

The year 2023 started with a bang for the country’s fledgling green hyd­ro­gen sector. On January 4, 2023, the Union Cabinet approved the Na­tio­nal Green Hydrogen Mission with an initial budget outlay of Rs 197,440 million, which led to excitement amon­gst in­dustry players. The landmark anno­unce­ment was followed by the release of the detailed mission document a few days later, giving an over­view of the overall mission goals, strategies to de­ve­lop the green hy­drogen ecosystem, various components under the mission, the governance framework, the im­plementation roadmap, ex­pec­ted outcomes and the financial outlay. Nee­dless to say, the approval of this transformative mission and the related budget allocation has been a much-awaited and necessary intervention to generate confidence in India’s emerging green hydrogen market.

The National Hydrogen Mission had first found a mention in the finance minister’s budget speech in February 2021. It was then formally launched by the pri­me minister on India’s 75th Indepen­dence Day the same year, the­reby showing the strategic importance of the sector. A formal policy announcement ca­me a few months later, in Feb­ruary 2022. It laid out many encouraging provisions for gre­en hydrogen and green ammonia manufacturers, inclu­ding the waiver of interstate transmi­ssion char­ges till June 2025, priority for grid connectivity, grant of open access, energy banking and renewable purchase obligation benefits. However, this policy document was just the first phase of the la­rg­er policy framework and more policy interventions are expected soon.

Mission aims and approaches

Green hydrogen is an important piece of the energy landscape in the current glo­bal energy crisis owing to its versatile ap­plications and its potential to help decarbonise hard-to-abate industries, as well as the transport and power sectors. This powerful fuel is non-polluting and is generated using renewable energy and water, thereby addressing the twin challenges of emission reduction and energy security. The main aim of the mission is to scale up the production and consu­m­ption of green hydrogen in the country and further make it a global hub for gre­en hydrogen export. To achieve this goal, the mission will en­able the scale-up of gr­e­en hydrogen ca­pacities to at least 5 mi­llion metric ton­nes per annum (mmt­pa) by 2030, with a further potential to reach 10 mmtpa. This will be supported by the growth of associated renewable en­ergy capacity of about 125 GW.

As the country aims to be net zero by 2070, this mission has been formulated to make all major fossil fuel-based pro­cesses switch to renewable energy and green hydrogen application. This will include the replacement of hydrogen produced from fossil fuel sources in various industrial processes such as ammonia production, steel manufacturing and petroleum refining with green hydrogen. Further, green hy­drogen is proposed to be blended in city gas distribution systems and green hy­dro­gen derivatives can replace fossil fuels in various sectors including mobility, shipping and aviation. To ensure secure eq­uip­ment su­pply chains and promote domestic manufacturing of key components, this mission will support technology advan­ce­ments and the scale-up of electrolyser production as well.

The green hydrogen industry is at a nascent stage not just in India but at a global level, with a lack of proven case stu­dies and experiences. Therefore, this missi­on strategy will focus on ensuring str­eamlined development of the green hy­drogen market. Interventions will be aimed at demand creation to make gre­en hydrogen competitive for both do­m­estic consumption and exports. Further, su­pply-si­de constraints will be address­ed through an incentive framework. An enab­ling eco­system will be created th­rough the requir­ed demand- and supp­ly-related interventions. To facilitate this, the mission is proposed to be im­plemented in two phases:

  • Phase I (2022-23 to 2025-26): This will focus on green hydrogen dep­loy­ment in sectors that are al­rea­dy using fossil fuel-based hydrogen. These include refine­ries, fertilisers and city gas distribution. Pilot projects will be taken up in green hydrogen application in steel production, long-haul heavy duty mo­bility and shipping. While these will help in creating demand for gr­een hy­drogen, there will be adequate fo­cus on increasing dom­es­tic electrolyser manufacturing capacity on the supply side. Further, the formulation of regulations and standards will commence in this phase.
  • Phase II (2026-27 to 2029-30): The cost of green hydrogen is expected to be­come more competitive by the beginning of the second phase, increasing the scope for greater adoption. In this pha­se, green hydrogen projects will be taken up in the steel, mobility and shipping sectors. Their potential will be explored across railways and aviation as well. Further, R&D initiatives will con­­ti­­nue to increase green hydrogen penetration across various sectors for the decarbonisation of the economy.

The actual implementation of these plans will require massive investments from bo­th public and private entities. Fu­r­ther, significant risk mitigation str­a­tegies will have to be formulated by the government to allow such large investments to take place in a niche area with the lack of historical data. According to the mission do­cument, the total budget outlay of Rs 197,440 million comprises an allocation of Rs 174,990 million for the Strategic Inter­ven­tions for Green Hy­drogen transition (SIGHT) Programme, Rs 14,660 million for pilot projects, Rs 400 million for R&D, and Rs 388 million to­wards other components. This inclu­d­es two financial incentives that are being planned under the SIGHT programme for domestic manufacturing of electrolysers and production of green hydrogen. Further, support will be provided for pilot projects and green hydrogen hubs will be developed.

Owing to the far-reaching applications of green hydrogen development in the country, the mission will witness the in­volvement of various central and state government agencies. The Ministry of New and Renewable Energy will be res­ponsible for the overall coordination. An empowered group chaired by the cabinet secretary will be formed. It will comprise high-ranking officials including the principal scientific ad­viser to the Go­vernment of India, chief executive officer of NITI Aayog, secreta­ries of various ministries and departments as well as industry experts. This group will be responsible for overseeing the activities under the mission, monitor its pro­g­ress and provide policy recommendations wherever required.

In the near future, an enabling policy fra­mework will be developed along with a robust standards and regulations framework. Continued technological advance­me­nts are necessary to develop cost-competitive technologies. In view of this, the Strategic Hydrogen Inno­vation Part­ner­ship (SHIP), a public-private partnership framework for R&D, is planned to be facilitated under the mission. A national portal is also being proposed for green hy­drogen project application, sanction, and funds disbursal wherever required. This will also help create awareness and facilitate the connection of stakeholders. In the past year, the government has la­un­­ched portals for rooftop solar and open access projects, which have proven to be successful in building sector confidence. This same is envisaged for the green hydrogen space as well.

As these plans come to fruition, it is ex­pected that the mission will be successful in facilitating over Rs 8 trillion in total investments and creating 600,000 jobs. Moreover, it will lead to a cumulative reduction in fossil fuel imports of Rs 1 trillion and 50 mmtpa of greenhouse gas emissions.


The recent financial outlay for the Na­tional Green Hydrogen Mission and the detailed mission document with an im­plementation roadmap have come out a few days be­fore the Union budget add­re­ss by the fi­nance minister in the mon­th of Fe­bruary. The clean energy industry, which had been expecting certain budget provisions for green hydrogen, can now confidently move ahead in its project planning with the upcoming po­licy and capital boost in the sector.

While this mission and the related budget have been widely appreciated across the clean energy industry, a few concerns have been raised, especially regarding the actual implementation of the proposed plan as well as the timely formulation of the required supportive policy and regulatory regime. While green hydrogen mandates for industries are required to create dema­nd, incentives are also required to promote domestic manufacturing of electrolysers. Some industry experts have also voi­ced concerns regarding the cost competitiveness of green hydrogen versus grey hydrogen. For this, it is critical to have do­mestic ca­pabilities for producing cost-effective yet world-class electrolysers.

In addition, the affordable cost of round-the-clock renewables is essential for running green hydrogen electrolysers. It is imperative to have proper transmission infrastructure, large tracts of land for setting up additional renewable energy projects, as well as generation balancing me­­chanisms in the form of battery storage and pumped storage. The challenges that have long slowed down renewable energy developments, especially those linked to approvals, contracts, grid and land acquisition, need to be urgently ad­dressed so that they do not become an impediment to green hydrogen uptake as well. Another key issue that needs to be tackled well in advance is the requirement of large volumes of clean water to produce green hy­drogen on electrolysis. Thus, projects need to be planned in re­gions that have sufficient reserves of wa­ter, but wastage of this precious resource must be avoided.

On a positive note, India is planning to develop large green hydrogen hubs or clusters that will be located close to demand centres. They will reduce the iss­ues associated with bringing renewables and water to the projects as well as transporting ready hydrogen to industries and ports for export.

India is one of the first countries to an­nounce such an extensive policy road­map specifically for green hydrogen. It is expected that this mission will help the country build large capacities and be­co­me a green hydrogen leader on the global stage. n

Khushboo Goyal