Green Hydrogen Policy Announced: India Takes First Major Step To Replace Fossil Fuels

The government is actively looking at green fuel alternatives like Hydrogen and Ammonia to replace fossil fuels. Prime Minister Narendra Modi had launched the National Hydrogen Mission on August 15, 2021 and now the Ministry of Power has taken the first major step in this direction by announcing the “green hydrogen / green ammonia” policy.

Green hydrogen is seen as one of the enablers for India to meet its climate targets and is looking forward to producing 5 million tonnes of green hydrogen by 2030 and the related development of renewable energy capacity.

As per the policy, green hydrogen and ammonia manufacturers “may purchase renewable power from the power exchange or set up renewable energy capacity themselves or through any developer, anywhere.” The government will provide an “open access”within 15 days of receipt of application.

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“The Green Hydrogen / Ammonia manufacturer can bank his unconsumed renewable power, for up to 30 days, with a distribution company and take it back when required. Distribution licensees can also procure and supply Renewable Energy to the manufacturers of Green Hydrogen / Green Ammonia in their States at concessional prices which will only include the cost of procurement, wheeling charges and a small margin as determined by the State Commission,” said the Ministry of Power in a statement to the media.

Government will waive inter-state transmission charges for a period of 25 years for the projects commissioned before 30th June 2025. Manufacturers will also get connectivity to the grid on priority basis to avoid any procedural delays.

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“The benefit of Renewable Purchase Obligation (RPO) will be granted incentive to the hydrogen/ammonia manufacturer and the distribution licensee for consumption of renewable power,” it added. Manufacturers will also be allowed to set up bunkers near Ports for storage of Green Ammonia for export / use by shipping. “The land for the storage for this purpose shall be provided by the respective Port Authorities at applicable charges,” it said.

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