Green Hydrogen Financing 1718957414

Financing Green Hydrogen in India
Private Sector Considerations to Strengthen India’s Enabling

Environment for a Competitive Green Hydrogen Economy
Shri Raj Kumar
Pralhad Singh,
Joshi,
Minister of Power,
New andNew and Renewable
Renewable Energy Energy
Atal Akshaya Urja Bhawan,
CGO Complex, Lodhi Road
New Delhi – 110003, India
Dear Shri Raj Kumar

Pralhad Singh
Joshi Ji, Ji,
We are pleased to present this Climate Finance Leadership Initiative (CFLI) India report on Financing
Green Hydrogen in India in support of the National Green Hydrogen Mission ((NGHM)NGHM) spearheaded by the
Ministry of New and Renewable Energy (MNRE). The NGHM establishes an ambitious vision for the future
of green hydrogen in India that builds on the country’s trailblazing efforts to deploy renewable energy at
scale. We look forward to working with the stakeholders of India’s energy transition to help spur domestic
demand and cement the country’s position as a leading producer and, in time, a global export hub of
green hydrogen.
CFLI India’s Members, comprising 10 leading Indian and international financial institutions and
corporates, with the objective of mobilising private capital towards the Government of India’s climate
priorities, are honoured to share a set of considerations that offer a private-sector view on the incentives
deployed under the NGHM
NGHM.. These considerations, shared at the request of the MNRE, are informed
by engagements with stakeholders from across the green hydrogen value chain. They focus on creating
demand for green hydrogen, the enabling infrastructure that is needed, and suggest ways to reduce
financing costs – in line with the policy’s mission.
In the last year, India’s hydrogen market has seen important developments and secured multiple investor
commitments towards the manufacturing of green hydrogen and its derivatives, despite a challenging
macro-environment and the uncertainties inherent to a sector still at an early stage. We believe that
with proactive policies, partnerships between key private and public sector participants, and innovative
financial solutions, India can become a global leader in green hydrogen.
On behalf of CFLI India, we thank you for your leadership and commitment to India’s climate ambitions.
Our Members look forward to working with you to advance India’s green hydrogen transition.
Sincerely,
N. Chandrasekaran Shemara Wikramanayake

CFLI India Co-Chair Co-Chair
CFLI India Co-Chair
Chairman Managing Director
Director & Chief
CEO Executive Officer
Table of Contents
1 Section 1.
Preamble
4 Section 2.
Key Trends and Emerging Opportunities for Green Hydrogen in India
5 Policy support
6 Current trends in India’s grey hydrogen market
6 Emerging trends in India’s green hydrogen market
13 Section 3.
Challenges to Scaling Green Hydrogen in India
14 Challenge 1: Incentivising demand
16
Challenge 2: Limited enabling infrastructure for green hydrogen deployment
17 Challenge 3: High financing costs in emerging markets
18 Section 4.
Private Sector Considerations for Policymakers
19 Consideration 1: Reducing green hydrogen production costs
21 Consideration 2: Catalysing sustainable demand for green hydrogen
23 Consideration 3: Leveraging critical enablers for a thriving ecosystem
25 Section 5.
Initial Learnings on Green Hydrogen Financing
26 Learning 1: Standardise medium-term offtake agreements
26 Learning 2: Mitigate offtake risk with real options
26 Learning 3: Manage currency risk with proven hedging products
26 Learning 4: Scale use of concessional capital, guarantees, and viability gap funding
26 Learning 5: Invest in project preparation and capacity building
27 References
29 Appendix 1: Abbreviations
30 Appendix 2: Cost Curve Assumptions
34 Appendix 3: Major Policy Milestones
36 Appendix 4: List of Figures and Tables
Section 1. Preamble
Section 1.
Preamble
Section 2.
Key Trends and Emerging Opportunities for
Green Hydrogen in India In pursuit of sustainable growth, governments are turning to clean technologies to support
Policy support their development. As countries raise ambition on climate and set ‘net zero’ targets to curtail
Current trends in India’s grey hydrogen emissions, decarbonising hard-to-abate sectors will be a critical means to this end. Green
market hydrogen – hydrogen produced through renewable energy – has sparked interest among
Emerging trends in India’s green hydrogen policymakers, given its potential to contribute to a cleaner economic growth trajectory,
market especially in hard-to-abate sectors. To date, 53 countries have hydrogen strategies, and
Section 3. another 30 are developing similar policies to transition to it (BloombergNEF 2024).
Challenge 1: Incentivising demand As India assumes a prominent role in the global economy, the adoption of alternative fuels
hallenge 2: Limited enabling infrastructure
C such as green hydrogen in its industries will be critical to mitigating global greenhouse gas
for green hydrogen deployment
emissions. Beyond mitigation, green hydrogen also provides a transition pathway for India
hallenge 3: High financing costs in emerging
C to reduce its reliance on imported fossil fuels and establish export opportunities. To this
markets
end, the Government of India’s Ministry of New and Renewable Energy (MNRE) launched
Section 4. the National Green Hydrogen Mission (NGHM) in 2023 aiming to promote demand for
Private Sector Considerations for
green hydrogen, facilitate an increase in production, and aid in developing key enablers for
Policymakers
the sector. However, the economics of green hydrogen in India remain challenging due to
Consideration 1: Reducing green hydrogen
production costs significant capital costs, the nascency of the sector, the higher cost of renewable energy, and
Consideration 2: Catalysing sustainable
its intermittent nature. Therefore, public–private engagement will be essential to build on
demand for green hydrogen India’s success in renewables and fuel its green hydrogen ambitions.
Consideration 3: Leveraging critical enablers
for a thriving ecosystem We – the Climate Finance Leadership Initiative (CFLI) India – offer a private sector view
Section 5. of practical next steps for consideration by the Government of India in deploying policy
Initial Learnings on Green Hydrogen Financing incentives to develop India’s green hydrogen industry and realise its ambitions of becoming a
Learning 1: Standardise medium-term offtake global production and export hub.
agreements
Learning 2: Mitigate offtake risk with real
options
Learning 3: Manage currency risk with proven
hedging products
Learning 4: Scale use of concessional capital,
guarantees, and viability gap funding
Learning 5: Invest in project preparation and
capacity building
References
Appendix 1: Abbreviations
Appendix 2: Cost Curve Assumptions
Appendix 3: Major Policy Milestones
Appendix 4: List of Figures and Tables
Financing Green Hydrogen in India 1

Section 1.
Preamble
Development and scope of the Environment and Water (CEEW) for their research
and analysis that supports bringing to light the private
Section 2.
‘Financing Green Hydrogen in sector considerations and financial learnings.
Key Trends and Emerging Opportunities for India’ report
Green Hydrogen in India This CFLI India report presents actionable
CFLI India engaged with the MNRE throughout 2023 considerations for Indian policymakers at both the
Policy support
to unlock finance for India’s green hydrogen sector. At national and state levels to strengthen the enabling
Current trends in India’s grey hydrogen
the ministry’s request, we developed a set of working environment for green hydrogen uptake in India
market
considerations to provide a private sector view on the while also catalysing private sector investment into
Emerging trends in India’s green hydrogen deployment of incentives under the NGHM, given our
market the industry. These considerations align with the
expertise as financiers and developers. These working MNRE’s mission components – generating demand,
Section 3. considerations were informed by stakeholders across incentivising supply, and developing key enablers – and
Challenges to Scaling Green Hydrogen in India the green hydrogen value chain, whose inputs were are supported by estimated demand projections as well
Challenge 1: Incentivising demand captured at a ‘Financing Green Hydrogen’ workshop as a breakeven cost analysis.
held in March 2023 and were presented to the MNRE
C
in June 2023. This report builds on those working
for green hydrogen deployment The presented considerations, although tailored
considerations and offers additional analyses to support
C
them. We would like to thank all who participated in to the Indian context, may, in time, serve as an
markets implementation blueprint for other international
the workshop and provided feedback to help ensure
Section 4. that the policy considerations represent a unified, markets to promote green hydrogen. They are not
Private Sector Considerations for private sector perspective on current challenges and intended to be a prescriptive set of policies, but rather,
Policymakers learnings to strengthen India’s enabling environment facilitate deeper public–private engagement on this
Consideration 1: Reducing green hydrogen for a competitive green hydrogen economy. In addition, topic.
production costs we would like to thank the Council on Energy,
demand for green hydrogen FIGURE 1:
Consideration 3: Leveraging critical enablers Use cases of green hydrogen as a decarbonisation tool
for a thriving ecosystem
Section 5.
Initial Learnings on Green Hydrogen Financing Feedstock and
Learning 1: Standardise medium-term offtake reductant
agreements Refineries Fertilisers Steel Methanol

options
Learning 3: Manage currency risk with proven Fuel for mobility
hedging products
Trucks Buses Shipping Aviation
capacity building
References Green Energy carrier

hydrogen
Green ammonia Blending with
natural gas
Appendix 4: List of Figures and Tables Energy storage
Power
Source: CEEW analysis

Section 1.
Preamble
What is green hydrogen?
Section 2.
Key Trends and Emerging Opportunities for Hydrogen can act as a fuel, industrial feedstock, reductant, and energy carrier and is produced through a variety
Green Hydrogen in India of processes (Table 1). At present, most hydrogen used worldwide is grey – produced through natural gas
Policy support
reforming – a process that leads to significant greenhouse gas emissions. As countries seek to decarbonise their
economy and reduce their dependence on fossil fuels, green hydrogen – produced using renewable energy –
Current trends in India’s grey hydrogen will be critical for them to achieve their energy transition goals.
market
Emerging trends in India’s green hydrogen TABLE 1:
market The hydrogen colour spectrum
Section 3. Colour of hydrogen Hydrogen production technology Feedstock or electricity source GHG* footprint
Wind, solar, small hydro,
Green Water electrolysis Minimal
Challenge 1: Incentivising demand geothermal, and tidal
C
Purple/pink Water electrolysis Nuclear Minimal
C Yellow Water electrolysis Mixed-origin grid electricity Medium
markets Steam methane reforming (SMR)/coal
Blue gasification with carbon capture and Natural gas and coal Low
Section 4.
sequestration
Policymakers Turquoise Pyrolysis Natural gas Low
Grey SMR Natural gas Medium
production costs
Consideration 2: Catalysing sustainable Brown Coal gasification Brown coal (lignite) High
demand for green hydrogen
Black Coal gasification Black coal High
for a thriving ecosystem Source: (Prabhu, Mallya and Elango 2023) *GHG = greenhouse gas(es)
Note: Reference ranges for GHG footprint are considered as follows: minimal - less than 2kg CO2eq. / kg H2, low - 2-6kg CO2eq. / kg H2,
Section 5. medium - 6-15kg CO2eq. / kg H2, high - greater than 15kg CO2eq. / kg H2.
Decarbonising hydrogen will enable emissions reductions in several of India’s core industries, given its many use
Learning 1: Standardise medium-term offtake
cases (Figure 1):
agreements
Learning 2: Mitigate offtake risk with real • Feedstock and reductant:
options » Hydrogen is used to synthesise derivatives such as ammonia or methanol that can be used for fertiliser and
Learning 3: Manage currency risk with proven chemical production.
hedging products » Hydrogen can also act as a reductant in industrial processes, particularly in petroleum refining and steel
Learning 4: Scale use of concessional capital, production.
• Fuel for mobility:
capacity building
» Hydrogen can be used as a fuel in the mobility sector, especially for heavy road vehicles, ships, and
aircraft, as its high-energy, density-per-unit mass enables it to power vehicles over long distances.
References
• Energy carrier:
Appendix 1: Abbreviations » Hydrogen can act as an energy carrier in the form of ammonia, which can be easily transported and traded.
Appendix 2: Cost Curve Assumptions » Hydrogen can be blended with natural gas and used as a cooking fuel or as a fuel in similar applications.
Appendix 3: Major Policy Milestones • Energy storage:

» Hydrogen can support grid stability in the power sector as an energy storage application.

Section 2. Key Trends and Emerging
Section 1.
Preamble
Opportunities for Green Hydrogen

Section 2.
Green Hydrogen in India
in India
Policy support
market
Emerging trends in India’s green hydrogen
market
Hydrogen is becoming increasingly critical as a fuel source for India’s core industrial sectors:
the country produces and consumes an estimated ~5.6 million tonnes per annum (MTPA) of
Section 3.
grey hydrogen annually, amounting to nearly 6 per cent of global consumption (IEA 2021).
To actualise India’s aspirations of building a low-carbon and self-reliant economy, the
Challenge 1: Incentivising demand
Government of India has declared green hydrogen a sunrise sector (MNRE 2023) and enacted
C
supportive policies to enable an industrial shift to achieve this vision by 2030. Furthermore,
as countries around the world also look to transition to green hydrogen, Indian policymakers
C
markets see an opportunity for the country to attract foreign investment, develop robust electrolyser
manufacturing capabilities, and lead innovation in this sector.
Section 4.
Policymakers This section highlights domestic policies, sectors, and trends that are shaping the contours of
Consideration 1: Reducing green hydrogen India’s green hydrogen industry. In line with the national policies, our analysis forecasts that
production costs India’s core grey hydrogen consuming sectors, including the fertiliser and refining industries,
Consideration 2: Catalysing sustainable will drive initial demand for green hydrogen. As green hydrogen technology and its associated
economics become increasingly viable, other applications of hydrogen in the steel, mobility
and shipping sectors can materialise at scale. However, tapping into export opportunities and
establishing a conducive enabling ecosystem will be critical to realising the government’s
Section 5. targets and propelling this sector forward in the long term.
agreements
options
hedging products
capacity building
References

Section 1.
Preamble
Policy support The country’s national hydrogen policies provide an
overarching direction for industry to move towards,
Section 2.
The announcement of the Green Hydrogen Policy along with a robust foundation for state governments
Key Trends and Emerging Opportunities for (GHP) in 2022, followed by the National Green to build on. As of March 2024, six Indian states
Green Hydrogen in India Hydrogen Mission in 2023, underpin this emerging including Maharashtra, Uttar Pradesh, Andhra
Policy support
sector by defining green hydrogen, outlining a Pradesh, Rajasthan, Odisha, and West Bengal have
demand generation roadmap, and stating production released green hydrogen policies. Madhya Pradesh
capacity targets (Figure 2). Key targets outlined in and Karnataka have included provisions for green
market
the NGHM include a green hydrogen production hydrogen in their renewable energy policies, while
Emerging trends in India’s green hydrogen capacity target of at least 5 MTPA by 2030, which Punjab, Haryana, Gujarat, and Kerala have policies
market
extends to an ambitious export-inclusive target of in the pipeline. These state government policies detail
Section 3. 10 MTPA (MNRE 2023). To achieve these targets, regional targets, offer incremental incentives for
Challenges to Scaling Green Hydrogen in India the NGHM identifies critical ecosystem enablers focus applications, and provide benefits for electricity
Challenge 1: Incentivising demand such as infrastructure and supply chain, in addition provision, amongst other interventions, to attract
to government incentives, policy interventions, and investors and encourage the establishment of green
C
research and development (R&D) priorities hydrogen production units across Indian states.
(Appendix 3).
C
markets FIGURE 2:
Section 4. Green hydrogen related policy milestones
Policymakers Feb 2021 Jan 2023 Aug 2023 Jan 2024 Mar 2024
NGHM NGHM approved India’s SIGHT Implementation of R&D
Consideration 1: Reducing green hydrogen announced by by the Cabinet definition of component-I: scheme; setting up hydrogen
production costs the Finance green hydrogen Incentives for hubs; scheme guidelines for
Minister in the announced by electrolyser skill development
Consideration 2: Catalysing sustainable Union Budget the MNRE manufacturing
demand for green hydrogen announced SIGHT component-II: Incentive
for procurement of green
Consideration 3: Leveraging critical enablers hydrogen/ammonia production
for a thriving ecosystem announced
Section 5.
Learning 1: Standardise medium-term offtake 2021 2022 2023 2024
agreements
options
hedging products
Feb 2022 Jun 2023 Oct 2023 Feb 2024
GHP launched SIGHT scheme R&D Roadmap Scheme guidelines
guarantees, and viability gap funding by the MoP incentives for Green for pilot projects
announced for Hydrogen using
electrolyser Ecosystem in hydrogen/green
capacity building manufacturing and India released by hydrogen in
green the MNRE shipping, steel, and
References hydrogen/ammonia green transport
NGHM National Green Hydrogen Mission production
Appendix 1: Abbreviations GHP Green Hydrogen Policy
SIGHT Strategic Interventions for Green
Appendix 2: Cost Curve Assumptions Hydrogen Transition
SECI Solar Energy Corporation of India
Appendix 3: Major Policy Milestones MNRE Ministry of New and Renewable Energy
MoP Ministry of Power
Appendix 4: List of Figures and Tables R&D Research and Development
Source: CEEW compilation based on policy documents

Section 1.
Preamble
Current trends in India’s grey FIGURE 3:
Total hydrogen demand in India (MTPA)
Section 2.
hydrogen market
14
Key Trends and Emerging Opportunities for India’s captive grey hydrogen market is estimated to 11.90
Green Hydrogen in India 12
Total hydrogen demand in India (MTPA)

be worth approximately USD 8.5-10 billion, based 1.30
Policy support on production costs of USD 1.5-1.8 per kg (Biswas, 10
Current trends in India’s grey hydrogen Yadav and Guhan 2020). India’s fertiliser and refining 8
8.00 4.50
0.50
market industries, where grey hydrogen functions as an 1.90
5.60
Emerging trends in India’s green hydrogen intermediary and most production and consumption is 6
0.10
market in-house, together account for 98 per cent of domestic 4

2.50
grey hydrogen production at 5.6 MTPA (Figure 3). The 6.10
Section 3.
remaining share of grey hydrogen, produced as a by- 2
3.00
product in certain industrial processes, is commercially 0
Challenge 1: Incentivising demand traded and utilised for glass making, laboratory
FY 2020
Domestic production
FY 2020
Potential demand
FY 2030
Projected hydrogen
through import demand
C research, and pilot projects. substitution
Fertilisers Refineries Petrochemicals
C Given the demand dependence on the fertiliser and
markets Source: CEEW analysis; (Monna, et al. 2021)
refining industries, India’s grey hydrogen consumption Note 1: CEEW based its projections on announced capacity expansion plans
Section 4. has seen marginal growth in the last decade, attributed for refineries and consumption trends from FY 2010 to FY 2020 for fertilisers,
ammonia, and methanol.
Private Sector Considerations for primarily to a low compound annual growth rate Note 2: CEEW assumes completely indigenised production of fertilisers,
Policymakers (CAGR) of approximately 1 per cent in these sectors ammonia, and methanol.
Consideration 1: Reducing green hydrogen since the financial year (FY) 2015. However, hydrogen
production costs consumption in the fertiliser and refining industries Emerging trends in India’s green
could double to nearly 10.6 MTPA by FY 2030 if
the respective sectoral production capacity targets are
hydrogen market
met. In the case of the fertiliser industry, this includes Domestic demand creation
for a thriving ecosystem increasing domestic production to offset imports as
outlined by the Ministry of Chemicals and Fertilisers, India’s hydrogen demand and production are set
Section 5. while for the refining industry, the Ministry of to nearly double by FY 2030, led primarily by its
Initial Learnings on Green Hydrogen Financing Petroleum and Natural Gas (MoPNG) aims to increase core hydrogen-consuming sectors. However, only a
Learning 1: Standardise medium-term offtake capacity by setting up new refineries across the country. fraction of this may be green. Phase I of the NGHM’s
agreements Similar increases can be expected in the petrochemicals implementation roadmap posits refining, fertilisers,
Learning 2: Mitigate offtake risk with real sector, where consumption may grow to 1.3 MTPA and the city gas sectors as leading India’s green
options for the same reasons. Together, these three sectors are hydrogen transition from FY 2023-FY 2026, while
Learning 3: Manage currency risk with proven anticipated to drive India’s total grey hydrogen demand Phase II identifies steel, mobility, and shipping as
hedging products up from 5.6 MTPA in FY 2020 to 11.9 MTPA in FY sectors that could explore green hydrogen uptake
2030. through FY 2026-FY 2030. However, despite this
we note that the total domestic demand for green
hydrogen in FY 2030 may be short of the NGHM’s
5 MTPA target, thus highlighting the role export
capacity building
opportunities could play in supporting growth of the
References sector in the near term.

Section 1.
Preamble
In FY 2030, we project that the largest proportion of
Section 2.
industry, which currently accounts for 44 per cent of
India’s grey hydrogen demand at 2.5 MTPA
Policy support (Figure 3). Based on the government’s targets
market Government of India 2023), we estimate total
market sector is a prime candidate for a transition to green
hydrogen as it is comparatively less price-sensitive to
Section 3.
production costs than other relevant sectors, which in
turn cushions it against a green hydrogen premium.
C to overall production costs is smaller than it is for
for green hydrogen deployment sectors such as fertilisers. According to NITI Aayog’s
C estimates, around 24 per cent of the sector’s hydrogen
markets demand in FY 2030 can be met by green hydrogen
Section 4.
Private Sector Considerations for approximately 1.1 MTPA to India’s projected total
Policymakers green hydrogen demand in 2030 (Figure 4).
production costs
FIGURE 4:
Projected green hydrogen demand in India by FY 2030 and FY 2050 (MTPA)
1.00 0.60
Section 5.
Initial Learnings on Green Hydrogen Financing 2.00
Learning 1: Standardise medium-term offtake 0.05 7.50

agreements 0.10 0.16
27.20 4.80
options
Learning 3: Manage currency risk with proven 0.60
hedging products 1.10

5.60 5.70
2.00
capacity building
FY 2030 FY 2050*
References
Steel Long-haul heavy-duty road transportation Fertilisers Petrochemicals Power Blending in city gas distribution
*Statistics referred from (Raj, Lakhina and Stranger 2022)

Section 1. Achieving these projections, however, necessitates However, the financials for substituting green
Preamble updating existing refining units as well as integrating hydrogen in fertiliser production are currently
Section 2.
green hydrogen into refinery operations. After prohibitive. The cost of hydrogen production
Key Trends and Emerging Opportunities for analysing plant designs of older refining units in contributes substantially to overall production costs
Green Hydrogen in India India, we note that it may be more efficient for this for fertilisers and, as a result, any premium associated
Policy support
sector to prioritise the structural integration of green with green hydrogen inputs could sharply inflate
hydrogen in upcoming units rather than retrofitting overall production costs for fertilisers. As a result, a
existing units at this stage. Multiple refineries in India blending mandate may be the most suited to unlock
market
have already announced green hydrogen pilot projects demand in this sector. However, the Government
Emerging trends in India’s green hydrogen to support the sector’s transition. of India’s already large subsidy expenditure for the
market
fertiliser industry makes it challenging for it to
Section 3. India’s fertiliser industry is another priority bridge the viability gap any further. These barriers
Challenges to Scaling Green Hydrogen in India sector for the transition to green hydrogen and are compounded by aging domestic fertiliser plants,
Challenge 1: Incentivising demand is projected to significantly drive green hydrogen in addition to technical challenges, and factor into
uptake. The sector currently consumes 3 MTPA our green hydrogen demand projection for the
C
for green hydrogen deployment of grey hydrogen, amounting to 54 per cent of sector (Figure 4). Based on these barriers, we expect
the country’s grey hydrogen demand (Figure 3). that by FY 2030, only approximately 10 per cent of
C
Based on the government’s emphasis on localising the fertiliser sector’s 6.1 MTPA hydrogen demand
markets
imported fertiliser products and imported ammonia, (Figure 3) will employ green hydrogen. Non-urea
Section 4. in addition to the recent capacity expansion to the fertilisers are likely to be the primary demand driver
urea production sector (Ministry of Chemicals and at this stage because of the input-specific lower
Policymakers premium non-urea fertilisers have, when compared to
Fertilizers 2022), we estimate that the sector’s total
Consideration 1: Reducing green hydrogen hydrogen demand may grow to 6.1 MTPA by FY urea fertilisers, and due to fewer technical challenges
production costs
2030. in switching from grey to green ammonia.
Green hydrogen policy instruments for the fertiliser industry
Section 5.
Transitioning to green hydrogen in the fertiliser industry is also a key focus area for the United States, which
has enacted tax credits under the Inflation Reduction Act of 2022. Under this act, starting in 2023, renewable
Learning 1: Standardise medium-term offtake energy and green hydrogen plants can receive a production tax credit of up to 2.75 cents per kilowatt-hour
agreements (kWh) (Hyde 2022) and up to USD 3 per kg of hydrogen (Department of Energy 2023), respectively, for the
Learning 2: Mitigate offtake risk with real first 10 years of operation. Taking advantage of these credits, fertiliser manufacturer Atlas Agro Holding AG
options (Atlas Agro) aims to produce competitive, low-carbon nitrate fertilisers, locally, in agricultural regions that
are dependent on fossil fuel-derived fertiliser imports with a significantly higher carbon footprint from both
Learning 3: Manage currency risk with proven production and transportation. In 2023, Macquarie agreed to invest up to USD 325 million in Atlas Agro and
hedging products affiliated entities to support the development of industrial-scale green nitrogen fertiliser plants in the United
Learning 4: Scale use of concessional capital, States and Latin America, which will utilise green hydrogen in the production process.
capacity building
References

Section 1. Steel and long-haul road transportation can also drive Other notable sectors
Preamble demand in the long-term
Although refining, fertilisers, steel, and long-haul road
Section 2. While the economics of switching from conventional transportation sectors are projected to be the major
fuel to green hydrogen in the NGHM’s Phase II demand drivers for green hydrogen, it is worth noting
sectors is currently prohibitive, existing analysis several additional applications. Phase I of the NGHM
Policy support highlights pathways where technological innovations marks city gas distribution as a near-term priority
Current trends in India’s grey hydrogen and economies of scale show meaningful green sector. However, the sector is unlikely to contribute
market hydrogen demand from steel, mobility, and shipping substantially to green hydrogen demand based on
Emerging trends in India’s green hydrogen in the long term (Figure 4). the blending parameters of initial pilot projects and
market the volumetric and energy requirements of the sector
However, due to the extended lead times for (MoP, GoI 2023). Niche sectors like railways and
Section 3. technology development, capacity deployment and
aviation, also mentioned in Phase II of the NGHM,
infrastructure creation in these sectors, these pathways are encouraged to undertake pilot projects to drive
Challenge 1: Incentivising demand may not move from the margins to the mainstream decarbonisation. By 2050, petrochemicals and the
C until closer to FY 2050 in India. Demonstrating power sector may contribute to green hydrogen
for green hydrogen deployment proof-of-concepts in Phase I of NGHM and demand. However, this is based on the emergence
C developing infrastructure will be critical for green of stable pathways for the use of green hydrogen in
markets hydrogen demand to materialise in these sectors. petrochemicals and improvements in the efficiency
Section 4.
of electrolysers and fuel cells for the power sector.
Private Sector Considerations for Other applications of green hydrogen in domestic
Policymakers and industrial heating are being explored globally,
but current costs and better suitability of other
production costs decarbonisation solutions render them less cost
competitive in the Indian context.
Section 5.
agreements
options
hedging products
capacity building
References

Section 1. India’s green hydrogen hotspots
Preamble hydrogen-consuming states account for approximately
Over and above sectoral demand and enabling two-thirds of the country’s total grey hydrogen
Section 2.
policies, the geographical location of Indian industries consumption. Existing demand from established
will likely determine which regions drive domestic industrial bases will continue to account for the
green hydrogen demand (Figure 5). Currently, Gujarat majority of the country’s emerging green hydrogen
Policy support
accounts for 30 per cent of India’s grey hydrogen consumption. However, going forward, steel-
Current trends in India’s grey hydrogen consumption, followed by Uttar Pradesh (17 per cent), producing states such as Jharkhand, Chhattisgarh,
market Maharashtra (8 per cent), Rajasthan (7 per cent), and Odisha, and Karnataka may also emerge as large
Emerging trends in India’s green hydrogen Madhya Pradesh (6 per cent). As mentioned, several consumers of green hydrogen.
market of these states including Uttar Pradesh, Maharashtra,
Section 3.
and Rajasthan are pursuing green hydrogen policies
Challenge 1: Incentivising demand FIGURE 5:
C Hydrogen demand sites in India (FY 2020, in tonnes per annum (TPA))
C
markets
Section 4.
Policymakers
production costs
Section 5.
agreements
options
hedging products
capacity building
References
Appendix 1: Abbreviations Hydrogen

500
200
consumption
Appendix 2: Cost Curve Assumptions (‘000 TPA) 50
Appendix 3: Major Policy Milestones Fertilisers Petrochemicals
Appendix 4: List of Figures and Tables Source: CEEW analysis

Section 1. Positioning India as a global contender
Preamble
Given our projection of 2 MTPA of domestic green
Section 2.
hydrogen demand by FY 2030, demand from export
Green Hydrogen in India markets will be key to meeting India’s green hydrogen
production capacity target of 5 MTPA. Globally,
Policy support
the projected demand for hydrogen is expected to be
Current trends in India’s grey hydrogen around 150 MTPA by 2030, with green hydrogen
market
projected to meet 51 MTPA of this demand (IEA
Emerging trends in India’s green hydrogen 2023).
market
Section 3. Several countries have already stated their intentions

Challenges to Scaling Green Hydrogen in India to import green hydrogen and its derivatives, such
Challenge 1: Incentivising demand as ammonia, to support their decarbonisation goals.
C The European Union has committed to importing 10
for green hydrogen deployment million tonnes of green hydrogen by 2030 (European
Commission n.d.). Similarly, East Asian countries
C
markets such as Japan, Singapore, and South Korea have also
expressed interest in importing green hydrogen and
Section 4. its derivatives to meet their climate commitments.
Private Sector Considerations for India’s geographical proximity to the potential East
Policymakers
Asian importers will support India’s export ambitions
Consideration 1: Reducing green hydrogen and help create a strong international supply chain.
production costs Multiple Indian firms are proactively exploring export
Consideration 2: Catalysing sustainable opportunities with several export-oriented projects for
demand for green hydrogen green ammonia production already announced.
Section 5.
Initial Learnings on Green Hydrogen Financing Export-focused green hydrogen hub
Learning 1: Standardise medium-term offtake AM Green Ammonia (AMGA), a venture led by the founders of leading renewable energy company, Greenko
agreements Group, is building one of the world’s largest green ammonia platforms at a brownfield site in Kakinada (an
Learning 2: Mitigate offtake risk with real industrial base for India’s oil and gas industry in Andhra Pradesh). Backed by global institutional investor GIC,
options the partnership, which spans multiple locations including Kakinada, aims to produce 5 million tons per annum
of green ammonia by 2030. The facility will comprise 1,300 MW round-the-clock renewable energy power,
Learning 3: Manage currency risk with proven enabled through a combination of renewable energy sources and long duration energy storage to be provided by
hedging products Greenko. Electrolysers will be powered by renewable energy to produce green hydrogen that is then converted to
Learning 4: Scale use of concessional capital, green ammonia.
AMGA will set up the plant with an overall investment exceeding USD 1 billion and has secured an offtaker for
Learning 5: Invest in project preparation and 25 per cent of the facility’s initial capacity. Utilising a build-own-operate model, the developer will sell green
capacity building ammonia for the project’s 25-30-year lifetime. For the first time in global markets, AMGA is offering short and
medium-term contracts against the market standard of long-term only partnerships, enabling the creation of
References
deeper and wider global green ammonia markets.

Section 1. Developing an enabling ecosystem and transportation infrastructure as production and
Preamble consumption facilities are co-located. Coastal states
In addition to spurring demand for green hydrogen, with renewable energy potential and robust port
Section 2.
developing an enabling ecosystem, including critical infrastructure such as Odisha – which has already
Green Hydrogen in India infrastructure will play a pivotal role in supporting signed memorandums of understanding (MoU) to
India’s ambitions for this sector. Key enablers are a this effect – and others such as Tamil Nadu, Gujarat,
Policy support
core component of the NGHM, which highlights the and Maharashtra are likely contenders to develop
Current trends in India’s grey hydrogen opportunity for India to lead on the manufacturing these new hubs. They can build on the upcoming
market
of electrolysers and renewable energy equipment, infrastructure by facilitating the participation of
Emerging trends in India’s green hydrogen in addition to the customised infrastructure this international stakeholders and may help broaden
market sector requires for safe and efficient storage and demand beyond the few Indian states where demand
Section 3. transportation across offtake industries. The domestic is currently concentrated.
Challenges to Scaling Green Hydrogen in India production of electrolysers, renewable energy
equipment, and other system components in sectors
Challenge 1: Incentivising demand While policy, both at the national and the state level,
with emerging green hydrogen applications presents
C is essential to initiate an industrial transition towards
another opportunity for the country to reduce import
for green hydrogen deployment India’s emerging green hydrogen industry, adequate
reliance and assume market leadership in green
C and affordable financing will also be key in supporting
hydrogen production.
markets the industry’s subsequent growth. To secure green
hydrogen investments from developed countries, India
Section 4. Green hydrogen hubs will play a vital role establishing has highlighted five activities that may involve the use
Private Sector Considerations for India as a frontrunner in the global transition to or production of green hydrogen to be eligible for the
Policymakers
green hydrogen and are expected to emerge close trading of carbon credits per Article 6.2 of the Paris
Consideration 1: Reducing green hydrogen to either domestic demand centres or major ports Agreement (Ministry of Environment, Forest and
production costs that can facilitate exports. The development of Climate Change 2023). While this is a step in the
Consideration 2: Catalysing sustainable upstream component manufacturing industries right direction, the active flow of private capital will
demand for green hydrogen can be centred around these areas. Green hydrogen be critical to achieving economies of scale for green
Consideration 3: Leveraging critical enablers hubs offer an opportunity to rationalise the storage hydrogen in India.
Section 5.
Developing a domestic Hydrogen hubs simplify supply
agreements electrolyser ecosystem chain development
L&T Electrolysers Limited, a newly incorporated Much like India, countries around the world are
options
entity of L&T, is focused on manufacturing increasingly turning to hubs to bolster supply of
Learning 3: Manage currency risk with proven pressurised alkaline electrolysers using green hydrogen and, in turn, create a reliable
hedging products technology from McPhy Energy, France. green hydrogen ecosystem. In October 2023,
Learning 4: Scale use of concessional capital, L&T commissioned its first indigenously the United States launched the Regional Clean
guarantees, and viability gap funding manufactured 1 MW hydrogen electrolyser at Hydrogen Hubs Program (H2Hubs) (Department
the green hydrogen plant at A M Naik Heavy of Energy n.d.). This initiative includes grants
Engineering Complex in Hazira, Gujarat. The of up to USD 7 billion to establish 6-10 regional
capacity building
company spearheaded the complete value chain, clean hydrogen hubs across the country. The
References including the engineering and manufacturing programme requires that eligible projects be
of the electrolyser, in collaboration with Indian involved in the “production, processing, delivery,
Appendix 1: Abbreviations vendors and suppliers, thus setting a benchmark storage, and end-use of clean hydrogen”
for ‘Make in India’ initiatives. L&T Electrolysers (Department of Energy n.d.). Seven hydrogen
Appendix 2: Cost Curve Assumptions plans to leverage its upcoming giga-scale facility hubs have already been chosen (Jennifer L. 2023).
in Hazira to meet the growing demand for green
hydrogen, maximise product localisation through
Appendix 4: List of Figures and Tables an enhanced local supply chain, and automate
for cost competitiveness.

Section 3. Challenges to Scaling
Section 1.
Preamble

Section 2.
Policy support
Current trends in India’s grey hydrogen This section presents the overarching barriers across the value chain – demand, supply,
market infrastructure, and financing – to deploying green hydrogen at scale in the Indian market.
Emerging trends in India’s green hydrogen While these challenges are interrelated, incentivising demand remains at the heart of the
market
commercial challenge. Green hydrogen will only command a higher share in industries’ fuel
Section 3. and feedstock mix when it is competitively priced with grey hydrogen and other incumbent
Challenges to Scaling Green Hydrogen in India fossil fuels. Until then, the green hydrogen sector will have to rely on government mandates
Challenge 1: Incentivising demand and external financial support for demand generation. Tackling the premium associated with
C green hydrogen over incumbent fuels is critical. Further, technology, policy, and financing
solutions are of utmost importance in reducing the cost of green hydrogen, building an
C enabling ecosystem, and catalysing finance.
markets
Section 4.
Policymakers
production costs
Section 5.
agreements
options
hedging products
capacity building
References

Section 1.
Preamble
Challenge 1: Incentivising demand when, carbon prices will be high enough to encourage
demand sectors to switch to green hydrogen, especially
Section 2.
given that other clean alternatives may have a lower
Key Trends and Emerging Opportunities for cost of CO abatement.
hydrogen projects viable at scale, creating commercial Challenging breakeven costs for green hydrogen versus
Policy support uncertainty and hindering investment in large-scale incumbent fuels and commodities
Current trends in India’s grey hydrogen projects. Figure 6) plots the
market
breakeven cost of green hydrogen production (USD per
Emerging trends in India’s green hydrogen kg) against the theoretical potential of consumption
market remains the largest impediment to the industrial
uptake of green hydrogen. As per current industry (MTPA) that will be unlocked at the breakeven cost
Section 3. estimates, green hydrogen costs USD 3.5-5 per kg, across various sectors of the economy. A base case
Challenges to Scaling Green Hydrogen in India while breakeven costs for green hydrogen to replace scenario presents green hydrogen’s cost competitiveness
Challenge 1: Incentivising demand conventional fuels in existing sectors are less than against incumbent fuels and commodities, at market
USD 2 per kg (Figure 6). Green hydrogen production prices. To present a forward-looking view, an aggressive
C
for green hydrogen deployment costs may further increase due to cost overruns in scenario has also been depicted in Figure 6, which
projects if timelines and cost estimates are disrupted assumes higher prices of incumbent fuels. Furthermore,
C
due to administrative or operational challenges. economised parameters have been considered in
markets
mobility applications. Comparing the green hydrogen
Section 4. production costs in India with the breakeven costs
the NGHM does point to forthcoming consumption in both scenarios demonstrates that the use of green
Policymakers hydrogen will command a sharp premium. However,
Consideration 1: Reducing green hydrogen Government of India is in the process of establishing certain applications have a lower premium in the
production costs
the Indian carbon market, it is also unclear if, and aggressive scenario.
demand for green hydrogen FIGURE 6:
Consideration 3: Leveraging critical enablers Green hydrogen cost curve
4.00
Section 5.
agreements 3.00
Breakeven green hydrogen cost (USD per kg)

options
Non-urea fertilisers
Learning 3: Manage currency risk with proven (Imported)
Non-urea fertilisers
hedging products 2.00
(domestic)
Imported
urea
Learning 4: Scale use of concessional capital, Blending with
natural gas Aggressive
guarantees, and viability gap funding Shipping scenario
Learning 5: Invest in project preparation and Imported

ammonia
Sustainable aviation fuel Steel production
(gas-based direct reduction route)
capacity building
1.00
Steel production
Buses
References Domestic
(blast furnace route)
urea
Appendix 1: Abbreviations Methanol Trucks

Base
case
Appendix 2: Cost Curve Assumptions 0.00 scenario
15.30 MTPA
Appendix 3: Major Policy Milestones 0.00 5.00 10.00 15.00 20.00
Cumulative green hydrogen demand unlocked (FY 2020 base, MTPA)

Note 1: For assumptions of the cost curve see Appendix 2.
Note 2: CEEW has calculated breakeven costs for mobility applications only for long-haul transport. These costs correspond to the green hydrogen production cost after correcting for the estimated
cost increase due to hydrogen refuelling stations, assumed at an optimum of USD 2 per kg (Reddi, et al. 2017).
Note 3: In charting the cost curve, pre-pandemic production values of various fuels and commodities are reflected, and the FY 2020 prices of incumbent fuels to negate the effect of price
variability. With one exception for the mobility sector, where the 2023 diesel price has been considered to showcase the breakeven cost of green hydrogen due to volatile prices of the commodity.

Section 1. The NGHM’s Phase I focus sectors for green hydrogen due to hydrogen refuelling stations. The breakeven
Preamble – fertiliser production (excluding urea) and refining cost of hydrogen production for use in trucking is at
Section 2.
– have the most achievable breakeven costs basis our a meagre USD 0.12 per kg, due to a high differential
Key Trends and Emerging Opportunities for analysis, ranging from USD 2.1-1.7 per kg. Cumulative in the purchase cost and fuel economies of hydrogen-
Green Hydrogen in India demand unlocked in these sectors is estimated to be fuelled trucks and diesel trucks. These differentials will
Policy support
4.7 MTPA, around half of which will originate from reduce over time, with economised production and
refining. Grey hydrogen – which currently relies on technological improvements.
expensive imported fossil fuels – allows for a higher
market Other sectors – such as steel production, the green
breakeven. Although shipping is a Phase II application
Emerging trends in India’s green hydrogen area, its breakeven costs are comparable with those of hydrogen–based methanol-to-jet-fuel pathway
market
the fertiliser and refining sectors due to high taxes on in aviation, and green hydrogen–based methanol
bunkering fuels. This sector could unlock an estimated production – are cost prohibitive, with breakeven costs
Section 3.
Challenges to Scaling Green Hydrogen in India 0.6 MTPA of green hydrogen demand in India. of approximately USD 1 per kg or less.
Challenge 1: Incentivising demand Government incentives to catalyse demand by tackling
The breakeven cost in urea production is much lower, production costs
C
at USD 1.03 per kg, albeit being a Phase I focus
sector. This is because urea production in India receives The current incentives granted by the NGHM to
C
high financial support through retail price subsidies. provide viability gap funding for green hydrogen
markets production and indigenise electrolyser manufacturing
Furthermore, a transition from grey to green hydrogen
Section 4. use in urea production would necessitate procuring are intended to be catalytic. However, on a standalone
Private Sector Considerations for carbon dioxide externally, unlike the production of basis, they will fall short of bridging the gap between
Policymakers other fertilisers. This adds to the cost of transition green hydrogen production costs and the necessary
Consideration 1: Reducing green hydrogen which lowers the breakeven. breakeven costs. The subsidy for green hydrogen
production costs production (MNRE 2023), which is capped at USD
Hydrogen use in mobility applications is unlocked at 0.66 per kg in the first year and tapers down to USD
demand for green hydrogen a green hydrogen cost below USD 1.2 per kg. While 0.4 per kg by the third year, is insufficient for almost
the breakeven cost at the tank inlet for hydrogen- all sectors. The subsidy offered in the second tranche
fuelled buses and trucks is around USD 2-3 per kg, the of the Strategic Interventions for Green Hydrogen
green hydrogen production cost must be significantly Transition (SIGHT) scheme continues these rates
Section 5. lower than this value to compensate for an increase for green hydrogen production (MNRE 2024) in
agreements
options
hedging products
capacity building
References

Section 1. addition to offering an analogous subsidy for green The production target of green hydrogen will need
Preamble ammonia production (MNRE 2024). Furthermore, around 125 gigawatt (GW) of additional renewable
Section 2.
the production-linked incentives (PLI) scheme for energy capacity to be developed in India, beyond the
Key Trends and Emerging Opportunities for electrolyser manufacturing (MNRE 2023) with an country’s ambition of 500 GW of renewable energy
Green Hydrogen in India allocation of approximately USD 560 million and capacity by 2030 (MoP n.d.).
Policy support
an average incentive of USD 39.5 per kW, can only
support around half of the electrolyser capacity needed Developments in India aimed at building robust and
to achieve India’s 2030 green hydrogen goals. Therefore, enabling ecosystems
market
financial institutions and green hydrogen sector The central government’s decision to offer a 25-year
Emerging trends in India’s green hydrogen participants must complement the government’s efforts waiver on interstate transmission system (ISTS)
market
with innovative solutions to incentivise and unlock the charges for green hydrogen projects commissioned
Section 3. demand for green hydrogen. before 31 December 2030 through the GHP is a
Challenges to Scaling Green Hydrogen in India welcome incentive for the industry (MoP 2023).
While state distribution company tariffs and state-level
Challenge 1: Incentivising demand Challenge 2: Limited enabling electricity duty on them may still be applicable, open
C
infrastructure for green hydrogen access transmission charges would reduce because of
deployment the ISTS waiver. The GHP also maximises the use of
C
existing infrastructure to connect renewable energy
markets Much like electricity and natural gas networks, production areas with green hydrogen consumption
Section 4. deploying green hydrogen at scale relies on robust nodes.
Private Sector Considerations for distribution and storage infrastructures to connect
Policymakers supply and demand nodes. However, green hydrogen However, some states are unwilling to provide similar
Consideration 1: Reducing green hydrogen supply chain infrastructure does not yet exist in India incentives on intrastate wheeling charges, which might
production costs outside of several local industrial clusters that consume impede the growth of the green hydrogen economy.
hydrogen. Moreover, power evacuation infrastructure The NGHM also mentions facilitating enabling
demand for green hydrogen closer to ports may also be insufficient to cater to infrastructure for two green hydrogen hubs by 2026.
export markets. This creates commercial uncertainty for However, at present, limited details are available
project developers and financiers of green hydrogen, on the scale and type of public funding this would
who must consider additional operational challenges. involve. Furthermore, assessing the cost-effectiveness
Section 5. The added cost for developers to build the enabling of hydrogen hubs by comparing the costs of delivering
Initial Learnings on Green Hydrogen Financing infrastructure could also be prohibitive for new green renewable energy with the cost of transporting
Learning 1: Standardise medium-term offtake hydrogen projects. hydrogen/ammonia is necessary. The success of the
agreements NGHM’s integrated mission strategy (MNRE 2023)
Medium-term applications that do not currently will be critical to ensuring coordinated and effective
consume hydrogen, such as mobility, steel, and city infrastructure development to support India’s green
options
gas distribution, will impose specific infrastructure hydrogen sector.
requirements that must be built at scale from scratch.
hedging products
capacity building
References

Section 1.
Preamble
Challenge 3: High financing costs Slow progress on unlocking adequate financing for
India’s green hydrogen sector
Section 2.
in emerging markets Raising capital from private financial institutions
Key Trends and Emerging Opportunities for Private investments in India carry a high cost of capital, is expensive for Indian green hydrogen producers.
Green Hydrogen in India particularly for capital expenditure-intensive projects While domestic financial institutions have been
Policy support in upcoming green sectors such as green hydrogen. working with the Government of India to develop
The weighted average cost of capital (WACC) for financing frameworks for domestic green hydrogen
market green projects such as solar photo voltaic, natural gas projects including guidelines on credit appraisal, risk
and utility scale batteries in India ranges between 9 assessments, and concessionary finance to aid credit
per cent and 11 per cent (IEA n.d.). High interest flow into green hydrogen projects, these innovative
market
rates in advanced economies can also result in capital solutions are still at the early stages. Development
Section 3. outflows from emerging markets such as India as the finance institutions globally have been cautious and
Challenges to Scaling Green Hydrogen in India cost of borrowing increases. These challenges are often sparing in financing green hydrogen with concessional
Challenge 1: Incentivising demand compounded by currency risk and macroeconomic capital at scale due to the nascent development in
C volatility that dampen investor demand in unproven the sector. Furthermore, given the nascency of this
for green hydrogen deployment and upcoming sectors such as green hydrogen. sector, financial institutions are at the early stages of
Additionally, green hydrogen projects also face a developing innovative financing solutions such as
C
markets substantial technology risk, especially for electrolysers, first-loss equity, risk insurance, and subordinated debt.
hydrogen storage, and fuel cells. Incentives offered by developed countries to support
Section 4. their green hydrogen sectors will also deter capital
flow to emerging economies such as India. Inadequate
Policymakers
financing hinders the demonstration of green hydrogen
Consideration 1: Reducing green hydrogen technologies at scale, which causes uncertainties
production costs
associated with the sector to remain unresolved, further
Consideration 2: Catalysing sustainable discouraging financing.
Section 5.
agreements
options
hedging products
capacity building
References

Section 4. Private Sector
Section 1.
Preamble
Considerations for Policymakers

Section 2.
Policy support
Current trends in India’s grey hydrogen Considering the challenges that the domestic green hydrogen ecosystem faces, and learnings
market from emerging markets globally, in this section we offer working policy considerations for
Emerging trends in India’s green hydrogen the Government of India. These multifaceted considerations aim to reduce green hydrogen
market
production costs, generate sustainable demand for green hydrogen, and leverage critical
Section 3. enablers for building a thriving green hydrogen sector in India.
C
C
markets
Section 4.
Policymakers
production costs
Section 5.
agreements
options
hedging products
capacity building
References

Section 1.
Preamble
Consideration 1: Reducing green in addition to reducing the Goods and Services Tax
(GST) on renewable energy components. Incentives
Section 2.
hydrogen production costs such as a reduction in GST on electrolyser components;
Key Trends and Emerging Opportunities for availing incentives under the SIGHT scheme for the
As per industry estimates, the levelised cost of green
Green Hydrogen in India production of electrolysers, green hydrogen, and green
hydrogen (LCOH) in India in 2024 is estimated to
Policy support
ammonia; and a decrease in capital costs through green
range between USD 3.5-5 per kg. The variance in
debt access, that help drive down the cost of electrolysers
Current trends in India’s grey hydrogen LCOH could be explained by the mix and type of
have an estimated impact of USD 0.41 per kg. Waiver
market renewable energy, capacity utilisation factor of renewable
of power banking charges and green debt access would
Emerging trends in India’s green hydrogen energy assets, plant load factor, power efficiency, assumed
affect the cost of both the electrolyser and renewable
market degradation, and contracted price of electrolysers.
energy as illustrated in Figure 7.
Section 3. In conjunction with the outlay granted by the NGHM
Market-driven innovations in electrolyser and renewable
to provide viability gap funding for green hydrogen
energy technologies could also support to lower the
Challenge 1: Incentivising demand production and to indigenise electrolyser manufacturing,
cost of electrolysers and renewable energy by an
C several additional policy incentives could be considered
estimated USD 0.62 per kg. The cumulated impact of
for green hydrogen deployment to further decrease the LCOH. These incentives that
the aforementioned incentives along with potential
lower the cost of renewable energy have an outsized
C innovations could lead to an estimated LCOH ranging
markets impact on the LCOH, totalling as estimated reduction
between USD 1.63-3.13 per kg.
of USD 0.83 per kg of hydrogen (Figure 7). These
Section 4. include waiving power banking and open-access charges
Policymakers
FIGURE 7:
production costs Estimated impact of the policy considerations on green hydrogen production costs
5.00
demand for green hydrogen 5.00
4.65
for a thriving ecosystem 4.17
Levelised cost of green hydrogen (LCOH) (USD/kg)
4.00
4.00 3.97 3.90
3.75
Section 5. -0.35
Initial Learnings on Green Hydrogen Financing 3.50
3.34
3.13 3.13
-0.48
Learning 1: Standardise medium-term offtake 3.00 3.15
-0.13
agreements -0.07 -0.07
-0.15
2.67
2.54
Learning 2: Mitigate offtake risk with real 2.47 2.40 -0.41
2.2
options 2.00 -0.21
1.84
Learning 3: Manage currency risk with proven 1.63 1.63
hedging products
1.00 Estimated impact on
Learning 4: Scale use of concessional capital, LCOH of 1.87 USD/kg

Learning 5: Invest in project preparation and 0.00
capacity building Base case Waiver of Waiver of GST reduction GST reduction Incentives in Green debt Reduction in Reduction Target case
power banking open-access (renewable (electrolysers) the SIGHT provision electrolyser cost in RE cost
charges charges energy) scheme (market-driven) (market-driven)
References
Considerations for reduction in LCOH
Wind electricity Solar electricity Open-access charges Electrolyser costs
Appendix 2: Cost Curve Assumptions Reduction in electrolyser costs Reduction in renewable energy costs SIGHT scheme incentives Market-driven cost reduction
Appendix 3: Major Policy Milestones Source: CEEW analysis

Note 1: The green hydrogen cost reduction trajectory has been estimated for the state of Gujarat, which is the largest industrial consumer of hydrogen in India, based
Appendix 4: List of Figures and Tables on inputs pertaining to the cost economics in the state. A detailed description of the assumptions considered for the modelling can be found in Appendix 2.
Note 2: As per CEEW’s cost build-up models for deriving the LCOH, the cost of procuring renewable energy accounts for 70 per cent of the LCOH in India, while the
capital cost of electrolysers accounts for the rest. CEEW’s LCOH model assumes optimised parameters for a wind-solar-hybrid (77 per cent wind, 23 per cent solar)
renewable energy mix and economised costs of electrolysers. This optimised scenario results in a more competitive LCOH that may, under a bullish projection, be
reflected in the market in the next 2-3 years as developers that currently utilise a solar-only procurement model incorporate wind energy into the mix.

Section 1.
Preamble
Section 2. Other important factors that can impact the cost of Reducing goods and services tax
green hydrogen production include the efficiency of the
Green Hydrogen in India The Government of India could reduce the GST for
electrolyser, scale of domestic production, and costs of
Policy support components used in green hydrogen/green ammonia
supporting distribution and storage infrastructure.
production (solar and wind-electricity generation
market Establishing a supportive power banking modules), including during its sale as a final commodity.
Under the existing GST structure, electrolysers are taxed
Emerging trends in India’s green hydrogen framework at 18 per cent, and renewable energy setups at 13.8 per
market
Renewable energy banking could also be instrumental cent under a composite structure. The reduction in GST
Section 3. in reducing the cost of green hydrogen by increasing could be planned for a stipulated period until a 5 MTPA
Challenges to Scaling Green Hydrogen in India the utilisation of electrolysers. As per our models for a production capacity is established.
Challenge 1: Incentivising demand solar-only operation, electrolysers currently have a 33
C per cent utilisation factor with 30 per cent oversizing Reducing capital costs through green debt
for green hydrogen deployment of solar power plants. While the GHP already allows
Central and state governments could consider
C banking for a period of 30 days, hydrogen-consuming
providing direct fiscal support through low-cost loans,
markets state governments could also make similar allowances
government-owned institutions, and other forms of
for green hydrogen projects on a monthly basis, injected
Section 4. financial assistance. The provision of low-cost green
at any 15-minute time block. This would further
Private Sector Considerations for debt at rates commensurate with other green bonds
improve the utilisation of electrolysers and reduce green
Policymakers or loans will be necessary to reduce the WACC for
hydrogen costs. There is already precedence for this
Consideration 1: Reducing green hydrogen green hydrogen projects. This could help reduce green
given that several state governments allow up to 100 per
production costs hydrogen production costs without significantly
cent (Gulia, Banga and Garg 2021) of their renewable
burdening government finances.
energy to be banked at different terms, even monthly
demand for green hydrogen (Sharma 2022). To facilitate uniformity in renewable
Consideration 3: Leveraging critical enablers energy banking provisions, the MNRE could consider
for a thriving ecosystem standardising and reducing the terms for power banking
Section 5.
vis-à-vis green hydrogen projects across states.
Learning 1: Standardise medium-term offtake Providing low-cost open-access electricity
agreements Waivers on interstate open-access charges (MNRE
Learning 2: Mitigate offtake risk with real 2023) could also support the provision of wheeling
options power between special economic zones, given that the
Learning 3: Manage currency risk with proven production sites of green hydrogen and its derivatives
hedging products may be located at a considerable distance from renewable
Learning 4: Scale use of concessional capital, assets and across state lines. Similar to the central
guarantees, and viability gap funding government, states could provide waivers on ISTS
Learning 5: Invest in project preparation and charges. States such as Rajasthan, Andhra Pradesh, and
capacity building Uttar Pradesh already provide waivers or have reduced
the intrastate open-access charges in their respective
References green hydrogen policies.

Section 1.
Preamble
Projected budgetary outlay of FIGURE 8:
Section 2. Estimated impact of the considerations on finances
Key Trends and Emerging Opportunities for the considerations of state and central governments (INR crore)
To implement the aforementioned considerations, 35,000
Policy support direct financial support from the central and state 30,828
Current trends in India’s grey hydrogen governments will be essential. We estimate that (USD 3.85 bn)
market waiving off open-access charges may have the 30,000 2,162
(USD 270 mn)
largest impact on government finances (Figure 3,145
8). This impact, when annualised, could vary for (USD 393 mn)
market
Impact on government finances (INR crore)

25,000
each state, over a wide range of INR 7,115-18,072
Section 3. crore (approximately USD 890 million to USD 2.2 7,446
(USD 930 mn)
Challenges to Scaling Green Hydrogen in India billion). This is because the base components of the 20,000
open-access tariffs are dictated by different policies
Challenge 1: Incentivising demand 15,644
across each state. Reducing GST on electrolysers (USD 1.95 bn)
C and renewable energy will also incur a considerable 15,000 514 (USD 64 mn)
for green hydrogen deployment loss of revenue for both the central and state 1,468 (USD 183 mn)

C governments. Until the capacity to produce 5 MTPA 6,546 18,072
10,000
markets green hydrogen is established, the lost revenue (USD 818 mn) (USD 2,259 mn)
due to the reduction in GST to 5 per cent may cost

Section 4. the government over a range of INR 8,015-10,593 5,000
Private Sector Considerations for crore (USD 1,068-1,412 million) per year. At a 5 7,115
(USD 889 mn)
Policymakers MTPA green hydrogen production level, and by
accounting for differences in state-level tariffs 0
Consideration 1: Reducing green hydrogen Lower estimate Upper estimate
on power banking, the annualised impact on the
production costs
governments for fully supporting power banking Support for power banking (5 MTPA green hydrogen production)
Consideration 2: Catalysing sustainable ranges between INR 515-2,163 crore (USD 69- Lost GST revenue (annualised; electrolysers)
demand for green hydrogen 288). These measures could complement the Lost GST revenue (annualised; renewable energy)
Consideration 3: Leveraging critical enablers outlay in the NGHM, increasing the effectiveness of Support for open-access charges (5 MTPA green hydrogen production)
for a thriving ecosystem viability gap funding and PLI in the NGHM. Source: CEEW analysis
Section 5.
agreements Consideration 2: Catalysing Stipulating green hydrogen purchase
obligations
Learning 2: Mitigate offtake risk with real sustainable demand for green
options India’s green hydrogen ecosystem is experiencing a
hydrogen supply-side push, but still lacks the necessary demand-
hedging products Established and growing demand for green hydrogen side pull required to scale. Through the Energy
Learning 4: Scale use of concessional capital, will be instrumental in developing economies of scale, Conservation (Amendment) Act, 2022, the central
guarantees, and viability gap funding driving down the cost of green hydrogen, and creating government could mandate the offtake of green
a virtuous cycle. Mandated green hydrogen purchase hydrogen by instituting blending requirements in
capacity building obligations (HPO) for domestic industries can help industrial units, such as in the fertilisers and refining
initiate demand. Promoting exports to markets that industries. Blending mandates, with periodic upward
References
have signalled intentions to import green hydrogen or revisions clearly outlined, may be needed in the early
green ammonia is another lever that can be employed to stages of this transition to help stimulate demand. A
generate demand. small blending proportion would spread the incremental
Appendix 2: Cost Curve Assumptions cost of green hydrogen over the total volume of
hydrogen used, thereby cushioning its impact on the

Section 1. financials. The MNRE has initiated discussions with Paris Agreement goals, will be critical to successfully
Preamble stakeholders in the industry to outline a plan for green incentivising demand for green hydrogen without
Section 2.
HPOs. Similar policies were successful in scaling India’s imposing exorbitant financial pressures on the obligated
Key Trends and Emerging Opportunities for renewable energy generation from 2003 onwards, when entities.
Green Hydrogen in India state electricity regulatory commissions set obligations
Policy support
for large commercial entities. While this may trigger Providing financial assistance to the
an increase in the cost of industrial output, offtakers
could eventually benefit from long-term stability in fuel
fertiliser industry for consuming green
market hydrogen
costs and secured energy requirements due to reduced
Emerging trends in India’s green hydrogen dependence on imported fossil fuels from volatile Given that the cost of fertiliser production in India
market
international markets. is highly sensitive to the cost of fuel, any blending
Section 3. mandate for green hydrogen will significantly impact
In the initial phase, the refining and non-urea fertiliser
Challenges to Scaling Green Hydrogen in India the financials of the fertiliser industry. Furthermore,
industries could be brought under the ambit of HPOs,
Challenge 1: Incentivising demand it may be challenging for the government to increase
as the premium associated with green hydrogen is
C
the outlay for fertiliser subsidies, which exceeded USD
lower in these applications than in urea fertilisers. The
for green hydrogen deployment 10 billion a year in FY 2021 and FY 2022. The total
price increase due to the blending of green hydrogen in
subsidy expenditure is heavily dependent on the volume
C refineries could be passed on to the end consumers if
markets
of chemical fertilisers consumed, which the Indian
the cost of crude oil in the international market reduces
government has already initiated efforts to rationalise
to compensate for the increased prices. To minimise
Section 4. through the Prime Minister - Promotion of Alternate
Private Sector Considerations for the impact on citizens, the government could consider
Nutrients for Agriculture Management Yojana (PM-
Policymakers reducing taxes on refinery products. Once the cost of
PRANAM scheme) (Ministry of Agriculture and
green hydrogen has decreased significantly, urea plants
Consideration 1: Reducing green hydrogen Farmers Welfare 2023). This scheme aims to promote
production costs could also be brought under the ambit of HPOs. A
the use of alternate and organic fertilisers through a
hydrogen blending mandate in urea fertiliser plants
Consideration 2: Catalysing sustainable market development assistance subsidy, and incentives
could be supported by the viability gap fund under the
demand for green hydrogen to states to reduce chemical fertiliser consumption. The
SIGHT scheme.
Consideration 3: Leveraging critical enablers subsidy expenditure that will be saved due to the reduced
for a thriving ecosystem use of chemical fertilisers through these initiatives
Facilitating a compliance carbon market could support the fertiliser industry’s green hydrogen
Section 5.
We welcome the Government of India’s release of the consumption, either as support for capital expenses
Carbon Credit Trading Scheme (CCTS) (MoP 2023). or as partial viability gap funding. The Department of
Learning 1: Standardise medium-term offtake Fertilisers, Ministry of Chemicals and Fertilisers, could
agreements Under this scheme, obligated entities in the fertiliser,
refining, and steel sectors must comply with the set consider making a provision to allocate a portion of
Learning 2: Mitigate offtake risk with real the incentive amount to fertiliser plants located within
carbon targets. A carbon price on these obligated entities
options the state where the reduction has occurred. This would
would incentivise the transition to green hydrogen in
these sectors. The design of a compliance carbon market also help states achieve their decarbonisation strategies
hedging products within the State Action Plans on Climate Change.
with allowances and carbon pricing aligned with the
capacity building Incentivising offtake in hard-to-abate sectors
References Carbon prices in the European Emissions Trading System have nudged heavy industries in Europe to source
green steel to lower their emission intensities. Green steel manufacturers that use green hydrogen in product
manufacturing processes have successfully raised sufficient capital to initiate projects. Industrial buyers have
Appendix 2: Cost Curve Assumptions issued advance purchase orders for green steel, thereby setting the sector on a self-sustaining path.

Section 1. Promoting exports of green hydrogen and Facilitating land and water allocation
Preamble
its derivatives Clear processes for land acquisition in manufacturing
Section 2. Through the NGHM, India envisions becoming not zones – for instance, on a long-term lease basis or
Key Trends and Emerging Opportunities for land-for-sale – and streamlining the processes for
only a leading producer but also a major exporter of
green hydrogen and its derivatives. Infrastructure and obtaining various land use and zoning approvals for
Policy support administrative support for export-oriented units could be green hydrogen production, component manufacturing,
Current trends in India’s grey hydrogen prioritised to facilitate trade. Such units would need to distribution, and storage through a dedicated single-
market be able to access incentives and other benefits of export- window clearance system, could be instrumental in
Emerging trends in India’s green hydrogen focused green hydrogen hubs. Port infrastructure should facilitating growth in this sector. The transportation of
market ensure adequate land availability and other resources green hydrogen will require the installation of pipeline
for storing and handling green hydrogen derivatives. infrastructure and obtaining a timely right-of-way would
Section 3.
Further, through appropriate bilateral and multilateral be paramount. To simplify right-of-way processes, the
agreements, India could remove structural and regulatory Government of India could introduce a law similar to
Challenge 1: Incentivising demand that in the power transmission sector, where the licensee
barriers to trade with key allied partners, facilitating a
C free international market for these fuels. India could also is given the right to build transmission lines under
for green hydrogen deployment encourage initiatives that aim to leverage opportunities Section 164 of the Electricity Act.
C for collaboration with partners in allied countries to
markets State governments could consider replicating measures
mutually enhance production capacities or develop
adopted by Uttar Pradesh, Andhra Pradesh, and
Section 4.
technologies across the green hydrogen value chain.
Rajasthan to provide land and water at subsidised rates.
Private Sector Considerations for States could also consider full or partial exemptions from
Policymakers Consideration 3: Leveraging critical land tax, local-body tax, land use conversion charges,
Consideration 1: Reducing green hydrogen non-agricultural tax, and industrial water consumption
production costs enablers for a thriving ecosystem charges. While these measures may have a minimal
Consideration 2: Catalysing sustainable Policy interventions to simplify project development impact on the overall cost of production of green
demand for green hydrogen processes, facilitate open trade and financing, and hydrogen, they have the potential to be instrumental in
Consideration 3: Leveraging critical enablers catalyse innovation in the green hydrogen ecosystem improving the ease of doing business for developers.
for a thriving ecosystem are critical. These interventions include establishing
enablers to reduce transaction costs, removing structural
Section 5. bottlenecks for project development, developing
standards and certification procedures, and investing in
Learning 1: Standardise medium-term offtake R&D.
agreements
options
hedging products
capacity building
References

Section 1. Increasing research and development Encouraging standardisation and
Preamble
allocation certification to promote trade
Section 2. The proposed allocation of INR 400 crore (USD 49 While India has already released its definition of
million) under the NGHM is welcome; however, further ‘green hydrogen’ (MNRE 2023), aligning with a global
investment may be required to reduce dependence on consensus on standards and certification norms will
Policy support critical raw materials and promote ‘Make in India’. The help create further interoperability and ensure smooth
Current trends in India’s grey hydrogen R&D Roadmap for Green Hydrogen Ecosystem in trade. Given India’s ambitions for this sector, there
market India (MNRE 2023) released by the MNRE outlines is an opportunity for the country to lead efforts to
Emerging trends in India’s green hydrogen India’s priorities along the green hydrogen value chain. establish a global rules-based cooperative framework
market Such a focused approach to R&D initiatives may be for green hydrogen (Ghosh, et al. 2022.). Gaps in safety
critical to the sector’s progress. Further, R&D initiatives standards across the green hydrogen value chain should
Section 3.
should be able to access provisions under the newly also be addressed (Sripathy, et al. 2023). Testing and
established Anusandhan National Research Foundation certification facilities for all green hydrogen value chain
to augment the available resources. The government components, with the involvement of premier research
C could float projects aimed at improving critical institutions and private stakeholders, can be facilitated
for green hydrogen deployment technology components in the public domain with with centralised institutional oversight to ensure quality
C clear eligibility criteria, project targets and milestones, control and project safety.
markets and funding criteria. The results and methodology of
Section 4.
such projects could be disclosed for public review, and
Private Sector Considerations for the intellectual property could be published. Industrial
Policymakers stakeholders and start-ups, along with academia and
other non-competing entities, could be eligible to
production costs undertake such projects and secure the associated
funding.
Fostering private sector participation in R&D
Section 5.
To pave the way for industrial green hydrogen adoption in India, HSBC India has partnered with the Shakti
Sustainable Energy Foundation to support research on policy, technology, and finance solutions that can
Learning 1: Standardise medium-term offtake scale the real-world application of green hydrogen in industrial facilities. Technology pathways, business
agreements models, and complementing policy recommendations to scale the uptake of green hydrogen in high potential
Learning 2: Mitigate offtake risk with real industrial clusters across Gujarat, Maharashtra, Jharkhand, and Chhattisgarh will aide in the industrial adoption
options of green hydrogen as a strategic alternate fuel and boost India’s green hydrogen economy. HSBC India has
also partnered with the Indian Institute of Technology (IIT) Bombay to launch the pan-IIT Innovation in Green
Hydrogen programme to encourage researchers, scientists, and entrepreneurs to develop breakthrough
hedging products
technologies and solutions that address key challenges in green hydrogen production, storage, transportation,
Learning 4: Scale use of concessional capital, and utilisation.
capacity building
References

Section 5. Initial Learnings on Green
Section 1.
Preamble
Hydrogen Financing
Section 2.
Policy support
Current trends in India’s grey hydrogen The policy considerations presented in the prior section represent a suite of high potential,
market near-term actions the government could pursue to accelerate private investment in domestic
Emerging trends in India’s green hydrogen green hydrogen production. However, not all barriers to investment can be solved through
market
government-led interventions. Private sector financial institutions, developers, and offtakers
Section 3. must partner with multilateral development banks, donors, and other development finance
Challenges to Scaling Green Hydrogen in India institutions to deploy innovative financing solutions at scale in the green hydrogen sector.
C Financing green hydrogen and green ammonia projects remains a challenge, highlighted by
the few projects that have secured sufficient financing to commence development. However,
C
as demand increases, financiers must develop innovative financing solutions in response to
markets
market dynamics. In the meantime, existing projects that have received financing, as well as
Section 4. projects for proximate energy sources, such as renewables and liquefied natural gas, present
Policymakers valuable lessons.
production costs To inform these considerations, we engaged in discussions with various stakeholders,
Consideration 2: Catalysing sustainable including buyers, developers, lenders, private equity, and development finance institutions,
demand for green hydrogen to gather initial high-level learnings from early investments in this sector and present them
Consideration 3: Leveraging critical enablers in this section.
Section 5.
agreements
options
hedging products
capacity building
References

Section 1.
Preamble
Learning 1: Standardise medium- Learning 4: Scale use of
Section 2.
term offtake agreements concessional capital, guarantees,
Key Trends and Emerging Opportunities for Financial institutions could work with project and viability gap funding
Green Hydrogen in India developers to create standardised medium-term
Financial institutions and developers could work with
Policy support offtake agreements for green hydrogen, similar to
multilateral development banks and donors to facilitate
the movement towards more standardised, bankable
Current trends in India’s grey hydrogen the investment of concessional capital in the green
market power purchase agreements in the renewable energy
hydrogen sector in India. Guarantees and viability gap
sector. A governmental nodal agency to facilitate such
Emerging trends in India’s green hydrogen funding mechanisms should be encouraged to lower
agreements would be critical. Financial institutions
market the cost of capital for projects and make Indian green
have indicated that 10-year offtake agreements would
hydrogen and ammonia production competitive in
Section 3. be sufficient, less than the typical project lifetime
global markets.
Challenges to Scaling Green Hydrogen in India of 20-30 years. Since ammonia is a globally traded
Challenge 1: Incentivising demand commodity with fluctuating prices, medium-term
C agreements can support developers and buyers, who Learning 5: Invest in project
for green hydrogen deployment need flexibility on pricing and volume. preparation and capacity building
C Green hydrogen/green ammonia production and its
markets Learning 2: Mitigate offtake risk supporting distribution and storage infrastructure
Section 4. with real options require high upfront capital investment and
Private Sector Considerations for considerable effort in designing, structuring, and
Financial institutions could work with project
Policymakers financing projects. Significant project preparation
developers and governments to design projects where
Consideration 1: Reducing green hydrogen funding will be needed to bring more projects into the
renewable power generation capacity can be connected
production costs pipeline and move them towards fundraising. However,
to the grid, providing an alternative revenue stream
Consideration 2: Catalysing sustainable project developers have also found that mainstream
in case offtake risks make planned projects unviable.
demand for green hydrogen financial institutions currently do not have the capacity
Although term-ahead and day-ahead markets in India
to evaluate hydrogen and ammonia projects, given
have low trading volumes, they offer an avenue for
for a thriving ecosystem their lack of experience and familiarity with the
project developers to sell excess power expeditiously.
idiosyncrasies of these projects. Resources are therefore
Section 5. Purchase agreements should shield project developers
required to draw together investors from across
Initial Learnings on Green Hydrogen Financing from challenges in amortising capex in case of offtake
commodities, infrastructure, and liquefied natural
risks. Finance professionals consider technology risks
Learning 1: Standardise medium-term offtake gas teams, all of which can play a role in transferring
agreements to be minimal, as most project costs will be related
knowledge from their verticals to the green hydrogen
to proven technologies (e.g., solar, wind, and hydro-
Learning 2: Mitigate offtake risk with real sector and help in better evaluating green hydrogen and
renewable power).
options ammonia projects.
hedging products Learning 3: Manage currency risk
Learning 4: Scale use of concessional capital, with proven hedging products
Financial institutions could work with multilateral
development banks and other organisations to develop
capacity building
currency hedging products for green hydrogen projects
References focused on export markets. Structuring contracts in
USD rather than INR can also support to mitigate
currency risks associated with investments in India.

References
Section 1.
Preamble
Section 2.
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Challenges to Scaling Green Hydrogen in India CEF, CEEW. 2022. “What is banking?”.19 April.
Challenge 1: Incentivising demand Ministry of Chemicals and Fertilizers. 2022. “Year- end
Center for Strategic & International Studies. 2022. “China’s Review of the Department of Fertilizers-2022”. 23 December.
C Hydrogen Industrial Strategy”. Center for Strategic &
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Clear. n.d. GST rates and HSN code for Other Electrical
markets
Machines. Ministry of Law and Justice. 2022. “THE ENERGY
Section 4. CONSERVATION (AMENDMENT) ACT, 2022.” New Delhi: The
Dep. of Energy, US Gov. n.d. Regional Clean Hydrogen Hubs. Gazette of India.
Accessed Nov 16, 2023.
Policymakers
MNRE. 2023. Green Hydrogen Standard for India. New Delhi:
Consideration 1: Reducing green hydrogen European Commission. n.d. “Hydrogen”. Ministry of New and Renewable Energy. doi.
production costs
Ghosh, Arunabha, Tulika Gupta, Shuva Raha, Hemant Mallya, MNRE. 2023. National Green Hydrogen Mission. New Delhi:
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Consideration 3: Leveraging critical enablers Council on Energy, Environment and Water (CEEW). MNRE. 2023. R&D Roadmap for Green Hydrogen Ecosystem
for a thriving ecosystem in India. New Delhi: Ministry of New and Renewable Energy.
Gulia, Jyoti, Ginni Banga, and Vibhuti Garg. 2021. Banking
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Initial Learnings on Green Hydrogen Financing Lakewood, Ohio: Institute for Energy Economics and Financial ‘Strategic Interventions for Green Hydrogen Transition (SIGHT)
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Manufacturing’ of the National Green Hydrogen Mission. New
agreements IBM. 2023. Indian Minerals Yearbook 2021. Nagpur: Indian Delhi: Ministry of New and Renewable Energy.
Learning 2: Mitigate offtake risk with real Bureau of Mines.
options MNRE. 2023. Scheme Guidelines for implementation
IEA. n.d. “Dashboard: Cost of Capital Observatory”. Accessed of ‘Strategic Interventions for Green Hydrogen Transition
Learning 3: Manage currency risk with proven November 2023. (SIGHT) Programme - Component II: Incentive Scheme For
hedging products
Green Hydrogen Production (under Mode 1)’ of the National
IEA. 2021. Global Hydrogen Review 2021. Paris:
Learning 4: Scale use of concessional capital, Green Hydrogen Mission. New Delhi: Ministry of New and
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Learning 5: Invest in project preparation and IEA. 2023. Hydrogen. Paris: IEA.
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Energy Agency (IEA). Green Ammonia Production (under Mode-2A) of the National
Appendix 1: Abbreviations Green Hydrogen Mission. New Delhi: Ministry of New and
L, Jennifer. 2023. “US DOE’s $7B Clean Hydrogen Hub Renewable Energy.
Appendix 2: Cost Curve Assumptions Grant: The 7 Chosen Ones”. carboncredits.com. 23 October.
Appendix 3: Major Policy Milestones Lin, Max Tingyao. 2022. “China sets green hydrogen
production target in national development plan”. 23 Mar.

Section 1. MNRE. 2024. Scheme Guidelines for Implementation of Prabhu, Aashwij, Hemant Mallya, and Sabarish Elango.
Preamble Strategic Interventions for Green Hydrogen Transition (SIGHT) 2023. Natural Gas Pyrolysis: A Bridge to a Green Hydrogen
Programme Component-II : Incentive for Procurement of Economy. New Delhi: Council on Energy, Environment and
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Key Trends and Emerging Opportunities for Green Hydrogen Mission. New Delhi: Ministry of New and
Green Hydrogen in India Renewable Energy. Prime Minister’s Office, Government of India. 2023. “PM
inaugurates India Energy Week 2023 in Bengaluru”. 06
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MNRE. 2023. Waiver of Inter-State Transmission System February.
Current trends in India’s grey hydrogen (ISTS) charges for Green Hydrogen and its derivatives. New
market Delhi: Ministry of New and Renewable Energy. Raj, Kowtham, Pranav Lakhina, and Clay Stranger. 2022.
Harnessing Green Hydrogen - Opportunities for Deep
Ministry of Environment, Forest and Climate Change. 2023. Decarbonisation in India. New Delhi: NITI Aayog and RMI.
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“Activities finalised to be considered for trading of carbon
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India”. 17 February. and market parameters on the refueling cost of hydrogen.”
Challenge 1: Incentivising demand International Journal of Hydrogen Energy 42 (34): 21855–
C Monna, Joydev, Prakash Jha, Rudranath Sarkhel, Chandan 21865.
for green hydrogen deployment Banerjee, Arun Kumar Tripathi, and Mansa Nouni. 2021.
“Opportunities for green hydrogen production in petroleum SECI Limited. 2023. “Request for Selection (RfS) Document
C for Selection of Electrolyser Manufacturers (EM) for Setting
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markets up Manufacturing Capacities for Electrolysers in India under
International Journal of Hydrogen Energy 46(77): 38212-
38231. Strategic Interventions for Green Hydrogen Transition (SIGHT)
Section 4.
Scheme (Tranche-I).” New Delhi: Solar Energy Corporation of
MoP. 2022. “Green Hydrogen Policy.” Feb. India Limited.
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Consideration 1: Reducing green hydrogen MoP. 2023. “NTPC starts India’s first green hydrogen SGA sustainable mobility solutions. 2021. National Bus
production costs blending operation in PNG network”. 03 January. Resource Requirement: Roadmap for overcoming the gaps.
SGArchitects.
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demand for green hydrogen Ammonia projects extended from 30 June 2025 to 31 Dec Shah, Ruchita, and Riddhi Mukherjee. 2023. CEEW-
Consideration 3: Leveraging critical enablers 2030”. 29 May. CEF Market Handbook. New Delhi: Council on Energy,
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—. 2023. “Notification of the Carbon Credit Trading Scheme,
Section 5. 2023.” New Delhi: Ministry of Power. Soman, Abhinav, Harsimran Kaur, Himani Jain, and Karthik
Initial Learnings on Green Hydrogen Financing Ganesan. 2020. India’s Electric Vehicle Transition: Can
MoPNG. 2015. Guidelines for Pooling of Gas in Fertiliser Electric Mobility Support India’s Sustainable Economic
Learning 1: Standardise medium-term offtake (Urea) Sector. New Delhi: Ministry of Petroleum and Natural Recovery Post COVID-19? New Delhi: Council on Energy,
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MoPNG. 2022. Indian Petroleum and Natural Gas Statistics Sripathy, Pratheek, Deepak Yadav, Aditi Bahuguna, and
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2021-22. New Delhi: Ministry of Petroleum and Natural Gas. Hemant Mallya. 2023. Accelerating the Implementation
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Gas Ready Reckoner: Oil and Gas Information at a Glance FY
References 2023-24 (H1). New Delhi: Ministry of Petroleum and Natural
Gas.

Section 1.
Preamble
Section 2.
CAGR Compound annual growth rate MoP Ministry of Power
Policy support
Current trends in India’s grey hydrogen CCTS Carbon Credit Trading Scheme MoPNG Ministry of Petroleum and Natural Gas
market
CCUS Carbon capture, utilisation, and storage MT million tonnes
market FCEV Fuel-cell electric vehicle MTPA million tonnes per annum
Section 3. FY Financial year MW megawatt
Challenge 1: Incentivising demand GHP Green Hydrogen Policy NGHM National Green Hydrogen Mission
C GST Goods and Services Tax PLF Plant load factor
C GW gigawatt PLI Production-linked incentives
markets
HGV Heavy goods vehicle PM-PRANAM Prime Minister - Promotion of Alternate
Section 4. Nutrients for Agriculture Management
Private Sector Considerations for HPO Hydrogen purchase obligation Yojana
Policymakers
HRS Hydrogen refuelling station R&D Research and development
production costs IIT Indian Institute of Technology RE Renewable energy
ISTS Interstate transmission system ROW Right of way
Consideration 3: Leveraging critical enablers kW kilowatt SECI Solar Energy Corporation of India
kWh kilowatt-hour SEZ Special economic zone
Section 5.
Initial Learnings on Green Hydrogen Financing LCOH Levelised cost of (green) hydrogen SIGHT Strategic Interventions for Green
Learning 1: Standardise medium-term offtake Hydrogen Transition
agreements
MGV Medium goods vehicle
Learning 2: Mitigate offtake risk with real MMBtu metric million British thermal unit TPA tonnes per annum
options
MMSCM million metric standard cubic meter WACC Weighted average cost of capital
hedging products
MNRE Ministry of New and Renewable Energy
guarantees, and viability gap funding MoEFCC Ministry of Environment, Forest and
Learning 5: Invest in project preparation and Climate Change
capacity building
References

Section 1.
Preamble
Section 2.
Green Hydrogen in India Table A1 lists the assumptions for the cost curve across various end-use sectors of the economy. As discussed in
Policy support
market
reported literature or derived using appropriate conversion parameters.
market
Section 3. TABLE A1:

Challenges to Scaling Green Hydrogen in India Assumptions for the cost curve (excluding road mobility applications)
C
Incumbent fuel/commodity cost Consumption
C Incumbent fuel/ Base case Aggressive
S.No. End-use sector Unit Unit Value
markets commodity value case value
Section 4. 1 Aviation Jet fuel USD/tonne 837.20 1,215 MTPA 15.20

2 Fertiliser production
Policymakers Natural gas USD/MMBtu 7.47 10.40 MMSCM 12,170
(urea)
production costs 3 Fertiliser production
Natural gas USD/MMBtu 10.10 14.80 MMSCM 2,717
(non-urea)
demand for green hydrogen 4 Refining Natural gas USD/MMBtu 10.10 14.80 MMSCM 7,038
for a thriving ecosystem 5.1 High-speed diesel oil INR/litre 64.96 96.50 ’000 TPA 808
5.2 Shipping Light diesel oil INR/litre 64.96 96.50 ’000 TPA 2.20
Section 5.
Initial Learnings on Green Hydrogen Financing 5.3 Furnace oil USD/tonne 399.85 445.25 ’000 TPA 729
agreements 6.1 Steel: Hot metal kg/tonne of
Coke USD/tonne 184.00 241.20 13
production product
options 6.2 Steel: Gas-based
kg/tonne of
Learning 3: Manage currency risk with proven direct reduced iron Natural gas USD/MMBtu 7.47 14.80 68
product
hedging products (DRI) production
Learning 4: Scale use of concessional capital, 7 Methanol USD/tonne 415 600 MTPA 2.46
8 Urea imports USD/tonne 249 462 MTPA 10.29
capacity building 9 Non-urea imports USD/tonne 314 592 MTPA 6.64
References 10 Ammonia Imports USD/tonne 303 462 MTPA 2.40
Sources: (i) Base case costs of incumbent fuels or commodities: jet fuel and shipping fuel prices (MoPNG 2022); delivered natural gas prices estimated on this basis
Appendix 2: Cost Curve Assumptions of (Petroleum Planning and Analysis Cell 2023), (MoPNG 2015); cost of coking coal for steel production: (Ministry of Commerce n.d.); cost of imported methanol,
urea, non-urea fertiliser and ammonia imports (Ministry of Commerce n.d.)
(ii) Consumption figures for incumbent fuels or commodities: jet fuel (MoPNG 2022); natural gas in fertilisers and refining (Petroleum Planning & Analysis Cell 2020);
Appendix 3: Major Policy Milestones shipping fuels (MoPNG 2022); steel production figures (IBM 2023); coking coal in steel: imported methanol, urea, non-urea fertiliser, and ammonia imports (Ministry
of Commerce n.d.)

Section 1. Table A2 lists the assumptions used in calculating the breakeven cost for mobility applications.
Preamble
Section 2. TABLE A2:

Key Trends and Emerging Opportunities for Assumptions for the cost curve for road mobility applications
Policy support
Current trends in India’s grey hydrogen S.No. Particular Unit Base case value Aggressive case value Source
market
Emerging trends in India’s green hydrogen BUSES
market
1 Average annual mileage by km 65,000 (Soman, et al. 2020)
Section 3. inter-city buses in India
2 Number of inter-city buses (SGA sustainable
Challenge 1: Incentivising demand # 4,05,388
in India mobility solutions 2021)
C
for green hydrogen deployment 3 Cost of diesel INR/l 92 (MoPNG 2022)

C 4 Purchase cost of one 9 m
INR million 4.00
markets diesel bus
Section 4. 5 Purchase cost of one 12 m

INR million 7.30
Private Sector Considerations for diesel bus CEEW research based
Policymakers on market rates
6 Purchase cost of one 9 m fuel
Consideration 1: Reducing green hydrogen INR million 10.80 4.80
cell electric vehicle (FCEV) bus
production costs
Consideration 2: Catalysing sustainable 7 Purchase cost of one 12 m
INR million 13.80 8.80
demand for green hydrogen FCEV bus
Consideration 3: Leveraging critical enablers TRUCKS

8 Average annual mileage of
km 52,784 (Malik and Tiwari 2017)
Section 5. long-haul trucks in India
9 Number of long-haul trucks
Learning 1: Standardise medium-term offtake in India
# 47,93,319 CEEW research
agreements
Learning 2: Mitigate offtake risk with real 10 Cost of diesel INR/l 92 (MoPNG 2022)
options
11 Purchase cost of one medium
Learning 3: Manage currency risk with proven INR million 2.00
goods vehicle (MGV) diesel truck
hedging products
12 Purchase cost of one heavy goods
Learning 4: Scale use of concessional capital, INR million 4.50
vehicle (HGV) diesel truck CEEW research based
guarantees, and viability gap funding on market rates
Learning 5: Invest in project preparation and 13 Purchase cost of one MGV FCEV
capacity building truck
References 14 Purchase cost of one HGV FCEV

truck
Sources: (i) Base case costs of incumbent fuels or commodities: jet fuel and shipping fuel prices (MoPNG 2022); delivered natural gas prices estimated on the basis of
Appendix 2: Cost Curve Assumptions (Petroleum Planning and Analysis Cell 2023), (MoPNG 2015); cost of coking coal for steel production: (Ministry of Commerce n.d.); cost of imported methanol, urea,
non-urea fertiliser and ammonia imports (Ministry of Commerce n.d.)
Appendix 3: Major Policy Milestones (ii) Consumption figures for incumbent fuels or commodities: jet fuel (MoPNG 2022); natural gas in fertilisers and refining (Petroleum Planning & Analysis Cell 2020);
shipping fuels (MoPNG 2022); steel production figures (IBM 2023); coking coal in steel: imported methanol, urea, non-urea fertiliser, and ammonia imports (Ministry
of Commerce n.d.)
Financing
Financing Green
Green Hydrogen
Hydrogen in
in India
India 31
31
Section 1. Table A3 lists all the modelling inputs considered for estimating the levelised cost of hydrogen (LCOH) in Figure 7.
Preamble Estimation of LCOH across scenarios is done sequentially, as listed in the table. All considerations from a preceding
Section 2.
scenario are carried forward, unless otherwise mentioned in the table.
Green Hydrogen in India TABLE A3:
Policy support
Inputs for estimation of levelised cost of hydrogen (LCOH)

market
S.No. Particular Value Unit Source
market
BASE CASE
Section 3.
Challenges to Scaling Green Hydrogen in India 1 Electrolyser plant load factor for wind-solar hybrid 74% %
(WSH)
2 Specific power consumption in electrolyser 50 kWh/kg-H2
C
for green hydrogen deployment 3 Surplus power consumption 6.10% %
C
4 Plant load factor - solar electricity 26% % Results from CEEW modelling
markets
5 Plant load factor - wind electricity 34% %
Section 4.
Private Sector Considerations for 6 Share of solar power 23% %
Policymakers
7 Share of wind power 77% %
production costs 8 Capex - electrolyser 750 USD/kW
9 Capex - electrolyser stack 412.50 USD/kW
CEEW research based on market
Consideration 3: Leveraging critical enablers 10 Capex - electrolyser balance-of-plant 337.50 USD/kW
rates and component build-ups
11 Capex - solar electricity 625 USD/kW
Section 5. 12 Capex - wind electricity 950 USD/kW
13 Discount rate 10% % (IEA 2023)
agreements 14 Life of component - electrolyser stack 30 Years
15 Life of component - electrolyser balance-of-plant 8.50 Years
options
Learning 3: Manage currency risk with proven 16 Life of component - solar electricity module 25 Years
hedging products
17 Life of component - wind electricity module 25 Yeas Assumptions about plant
Learning 4: Scale use of concessional capital, operational parameters
guarantees, and viability gap funding 18 Opex - electrolyser stack 5% % of capex
Learning 5: Invest in project preparation and 19 Opex - electrolyser balance-of-plant 5% % of capex

capacity building
20 Opex - solar electricity 1.50% % of capex
References
21 Opex - wind electricity 2% % of capex
22 Exchange rate 75 INR/USD Estimates
23 Open access rate: State transmission utility (STU) - 0.99 INR/kWh
Appendix 3: Major Policy Milestones solar electricity (CEEW-CEF 2023)
24 Open access rate (STU) - wind electricity 0.78 INR/kWh

Section 1.
POWER BANKING PROVISION
Preamble
25 Electrolyser plant load factor for WSH 95% %
Section 2.
Modelling results
Key Trends and Emerging Opportunities for 26 Surplus power consumption 0 %
Policy support OPEN-ACCESS PROVISION
Current trends in India’s grey hydrogen 27 Open access rate: Central transmission 0.09 INR/kWh
market utility (CTU) - Solar electricity
(CEEW-CEF 2023)
Emerging trends in India’s green hydrogen 28 Open access rate (CTU) - wind electricity 0.11 INR/kWh
market
PARTIAL GST WAIVER (ELECTROLYSER)
Section 3.
Challenges to Scaling Green Hydrogen in India 29 Existing GST rate 18 % (Clear n.d.)
Challenge 1: Incentivising demand 30 Proposed GST rate 5 %
C
PARTIAL GST WAIVER (RENEWABLE ENERGY)
C 31 Existing GST rate 13.80% % (Annapoorna M. 2022)
markets
32 Proposed GST rate 5% %
Section 4.
BENEFITS DUE TO THE STRATEGIC INTERVENTIONS FOR GREEN HYDROGEN TRANSITION (SIGHT) INCENTIVES
Policymakers 33 Year 1 base incentive under SIGHT 4,440 INR/kW
34 Year 2 base incentive under SIGHT 3,700 INR/kW
production costs
Consideration 2: Catalysing sustainable 35 Year 3 base incentive under SIGHT 2,960 INR/kW (SECI Limited 2023)
36 Year 4 base incentive under SIGHT 2,220 INR/kW
for a thriving ecosystem 37 Year 5 base incentive under SIGHT 1,480 INR/kW
Section 5. 38 Performance quotient 1

GREEN DEBT PROVISION
agreements 39 Coupon rate under green debt provision 7.95% % (Shah and Mukherjee 2023)
Learning 2: Mitigate offtake risk with real 40 Debt-to-equity ratio 4 – Assumption

options
41 Discount rate 9.20% % Calculation
hedging products REDUCTION IN ELECTROLYSER COST
42 Capex - electrolyser 350 USD/kW Aggressive case assumption
Learning 5: Invest in project preparation and REDUCTION IN COST OF RENEWABLE ENERGY COMPONENTS
capacity building
43 Capex - solar electricity 532 USD/kW
References
44 Capex - wind electricity 842 USD/kW
Aggressive case assumption
45 Levelised cost of solar electricity 2.20 INR/kWh
46 Levelised cost of wind electricity 2.75 INR/kWh

Section 1.
Preamble
Section 2.
Policy support Key components Features
Current trends in India’s grey hydrogen Green Hydrogen Policy (GHP) (Ministry of Power 2022)
market
Emerging trends in India’s green hydrogen Implementing agency Ministry of Power
market
Launch year 2022
Section 3.
General Aims to facilitate the supply of renewable energy to the green hydrogen sector in an expedited,
easy, and economical way
Definitions Defines green hydrogen/ green ammonia as “produced by way of electrolysis of water using
C
renewable energy, including renewables which has been banked and hydrogen or ammonia
for green hydrogen deployment produced by biomass”
C
markets Renewable energy access To facilitate the supply of renewable energy, the GHP enables the following:
Section 4. • A waiver on interstate transmission charges for 25 years on projects commissioned before
Private Sector Considerations for 30 June 2025
Policymakers
• Granting open access to plants within 15 days of application
production costs • Provides guidelines on the banking of renewable energy, which is permitted for up to 30 days
Consideration 2: Catalysing sustainable • Grants connectivity on a priority basis under the generation end for interstate transmission of
demand for green hydrogen renewable energy
Consideration 3: Leveraging critical enablers • Allows developers to set up bunkers near ports for green ammonia storage for exports
Section 5. National Green Hydrogen Mission (NGHM) (MNRE 2023)

Implementing agency Ministry of New and Renewable Energy
agreements
Launch year 2023
options Objectives • Make India a global hub for the production, usage and export of green hydrogen and its derivatives
Learning 3: Manage currency risk with proven • Contribute to India becoming self-reliant through clean energy
hedging products
• Decarbonisation of the economy, reduced dependence on fossil fuel imports, and leadership in
Learning 4: Scale use of concessional capital, green hydrogen market and technology
Learning 5: Invest in project preparation and Expected outcomes The expected outcomes by 2030 are as follows:
capacity building
• Green hydrogen production capacity of at least 5 MTPA
References
• Renewable energy capacity addition of ~125 GW
• Total investments over INR 8 lakh crore
Appendix 2: Cost Curve Assumptions • Create more than 6 lakh full-time jobs
Appendix 3: Major Policy Milestones • CO2 emissions mitigation of 50 MTPA

Section 1.
Preamble Two-phased approach The NGHM proposes a two-phased approach as follows:
Section 2. Phase I (FY 2023 – FY 2026): Creating adequate and sustainable demand:
• Incentives will target the indigenisation of a green hydrogen value chain through adequate
Green Hydrogen in India domestic electrolyser manufacturing capacity
Policy support
• Encourage the utilisation of green hydrogen in key sectors such as refining, fertilisers, and city
Current trends in India’s grey hydrogen gas to create a sustained demand and attract investments
market
• Lay the foundation for future transition in other hard-to-abate sectors such as steel, mobility,
Emerging trends in India’s green hydrogen and shipping
market
• Establish regulations and standards in line with international norms
Section 3.
Challenges to Scaling Green Hydrogen in India Phase II (FY 2026 – FY 2030): Enable a deep decarbonisation of the economy:
Challenge 1: Incentivising demand • Commercial scaling of green hydrogen projects in steel, mobility, and shipping
C
• Undertake pilots in other potential sectors such as railways, aviation, etc.
C
markets Mission components The NGHM consists of the following interventions:
Section 4. • Demand creation through export markets, domestic markets, and import substitution
Policymakers • Incentivising supply through the SIGHT scheme
Consideration 1: Reducing green hydrogen • Key enablers through key resources such as finance; renewable energy, land, and water; R&D;
production costs ease of doing business; creating infrastructure and supply chain; regulations and standards;
skill development; and public awareness
demand for green hydrogen Strategic Interventions for Green Hydrogen Transition (SIGHT) is a comprehensive incentive
programme that facilitates a green hydrogen value chain. These incentives target: (i) domestic
manufacturing of electrolysers through production-linked incentives under Component I (ii)
production of green hydrogen and derivatives through viability gap funding under Component II of the
scheme. As of March 2024, two tranches of the SIGHT scheme have been released that cumulatively
Section 5.
provision incentives for 3,000 MW electrolyser capacity, 650 kTPA of green hydrogen production,
and 550kTPA of green ammonia production.
agreements
Integrated mission Calls on 13 central ministries and state governments to coordinate to achieve the outlined mission
Learning 2: Mitigate offtake risk with real strategy objectives. Some of these are as follows:
options
• Ministry of New and Renewable Energy: Overall coordination and implementation, formulation
Learning 3: Manage currency risk with proven of schemes and financial incentives, etc.
hedging products
• Ministry of Power: Policies to facilitate the delivery of renewable energy
guarantees, and viability gap funding • Ministry of Petroleum and Natural Gas: Policies to facilitate uptake in refining and city gas
Learning 5: Invest in project preparation and distribution sectors
capacity building
Budgetary outlay Total outlay of INR 19,744 crore (~USD 2.4 billion), broken down as follows:
References
• SIGHT: INR 17,490 crore (~USD 2.2 billion)
• Pilot projects: INR 1,466 crore (~USD 180 million)
• R&D: INR 400 crore (~USD 49 million)
• Others: INR 388 crore (~ USD 48 million)

Appendix 4: List of Figures and Table
Section 1.
Preamble
Section 2.
Policy support
market Figures
2 Figure 1: Use cases of green hydrogen as a decarbonisation tool
market
5 Figure 2: Green hydrogen related policy milestones
Section 3.
Challenges to Scaling Green Hydrogen in India 6 Figure 3: Total hydrogen demand in India (MTPA)
Challenge 1: Incentivising demand 7 Figure 4: Projected green hydrogen demand in India by FY 2030 and FY 2050 (MTPA)
C 10 Figure 5: Hydrogen demand sites in India (FY 2020, in tonnes per annum (TPA))
for green hydrogen deployment 14 Figure 6: Green hydrogen cost curve
C 19 Figure 7: Estimated impact of the policy considerations on green hydrogen production costs
markets
21 Figure 8: Estimated impact of the considerations on finances of state and central governments (INR crore)
Section 4.
Policymakers
production costs Table
3 Table 1: The hydrogen colour spectrum

Section 5.
agreements
options
hedging products
capacity building
References

About the Climate Finance Leadership Initiative
The Climate Finance Leadership Initiative (CFLI) was formed in 2019 by Michael R. Bloomberg at the
request of the United Nations Secretary-General, António Guterres, to lead a private sector initiative to
“support a global mobilization of private capital in response to the challenge of climate change”. CFLI
aims to achieve that goal by bringing together leading institutions across the financial value chain, working
alongside corporates, policymakers, and multilateral institutions to identify barriers to investment and
support solutions that accelerate financing for low-carbon and climate-resilient projects in emerging
markets.
CFLI India is Co-Chaired by N. Chandrasekaran, Chairman of Tata Sons, and Shemara Wikramanayake,
Managing Director and Chief Executive Officer of Macquarie Group, and comprises 10 institutions namely
GIC Private Ltd., Goldman Sachs India, HDFC Bank Ltd., HSBC India, Kotak Mahindra Bank Limited,
Larsen & Toubro, Macquarie Group, NITI Aayog, State Bank of India, and Tata Sons. For more information,
visit https://www.bloomberg.com/cfli.
About CEEW
The Council on Energy, Environment and Water (CEEW) is one of Asia’s leading not-for-profit policy
research institutions and among the world’s top climate think tanks. The Council uses data, integrated
analysis, and strategic outreach to explain — and change — the use, reuse, and misuse of resources. The
Council addresses pressing global challenges through an integrated and internationally focused approach.
It prides itself on the independence of its high-quality research, develops partnerships with public and
private institutions, and engages with the wider public. CEEW has a footprint in over 20 Indian states and
has repeatedly featured among the world’s best managed and independent think tanks. Follow us on X
(formerly Twitter) @CEEWIndia for the latest updates.
This report was made possible through support from Bloomberg Philanthropies.
About Bloomberg Philanthropies

Bloomberg Philanthropies invests in 700 cities and 150 countries around the world to ensure better,
longer lives for the greatest number of people. The organization focuses on five key areas for creating
lasting change: the Arts, Education, Environment, Government Innovation, and Public Health. Bloomberg
Philanthropies encompasses all of Michael R. Bloomberg’s giving, including his foundation, corporate, and
personal philanthropy as well as Bloomberg Associates, a pro bono consultancy that works in cities around
the world.
The views expressed in this study are that of the authors. They do not necessarily reflect the views
and policies of the Council on Energy, Environment and Water (CEEW) or Bloomberg Philanthropies.
Illustrations and images in this publication may have been generated using AI.
© CFLI 2024

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Financing Green Hydrogen in India

Private Sector Considerations to Strengthen India’s Enabling

Dear Shri Raj Kumar

N. Chandrasekaran Shemara Wikramanayake

Appendix 2: Cost Curve Assumptions

Appendix 3: Major Policy Milestones

Appendix 4: List of Figures and Tables

Financing Green Hydrogen in India 1

Learning 2: Mitigate offtake risk with real

References Green Energy carrier

Appendix 3: Major Policy Milestones

Appendix 4: List of Figures and Tables Energy storage

Financing Green Hydrogen in India 2

Appendix 3: Major Policy Milestones • Energy storage:

Financing Green Hydrogen in India 3

Opportunities for Green Hydrogen

Appendix 2: Cost Curve Assumptions

Appendix 3: Major Policy Milestones

Appendix 4: List of Figures and Tables

Financing Green Hydrogen in India 4

Source: CEEW compilation based on policy documents

Financing Green Hydrogen in India 5

Total hydrogen demand in India (MTPA)

market in-house, together account for 98 per cent of domestic 4

grey hydrogen production at 5.6 MTPA (Figure 3). The 6.10

Appendix 2: Cost Curve Assumptions

Appendix 3: Major Policy Milestones

Appendix 4: List of Figures and Tables

Financing Green Hydrogen in India 6

Learning 1: Standardise medium-term offtake 0.05 7.50

hedging products 1.10

Appendix 3: Major Policy Milestones

Appendix 4: List of Figures and Tables

Financing Green Hydrogen in India 7

Appendix 2: Cost Curve Assumptions

Appendix 3: Major Policy Milestones

Appendix 4: List of Figures and Tables

Financing Green Hydrogen in India 8

Appendix 2: Cost Curve Assumptions

Appendix 3: Major Policy Milestones

Appendix 4: List of Figures and Tables

Financing Green Hydrogen in India 9

Appendix 1: Abbreviations Hydrogen

Appendix 3: Major Policy Milestones Fertilisers Petrochemicals

Appendix 4: List of Figures and Tables Source: CEEW analysis

Financing Green Hydrogen in India 10

Section 3. Several countries have already stated their intentions

Appendix 2: Cost Curve Assumptions

Appendix 3: Major Policy Milestones

Appendix 4: List of Figures and Tables

Financing Green Hydrogen in India 11

Financing Green Hydrogen in India 12

Green Hydrogen in India

Appendix 2: Cost Curve Assumptions

Appendix 3: Major Policy Milestones

Appendix 4: List of Figures and Tables

Financing Green Hydrogen in India 13

Learning 2: Mitigate offtake risk with real

Learning 5: Invest in project preparation and Imported

Appendix 1: Abbreviations Methanol Trucks

hallenge 3: High financing costs in emerging

hallenge 3: High financing costs in emerging