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Multiple stakeholders have welcomed the government's announcement of the policy for production of 'green hydrogen' and 'green ammonia', which, they said, will reduce overall power production cost, addresses some of the key demands of the industry in terms of open access, and potentially help the critical transportation sector.

Six months after the announcement to launch the National Hydrogen Mission, India on Thursday announced a major policy enabler for production of green hydrogen and green ammonia using renewable sources of energy with a clear aim of making India a green hydrogen hub.

The policy includes allowing manufacturers purchase renewable power from power exchange, offering grid connectivity, benefit of renewable purchase obligations, and incentives for bunks near ports for export.

Hemant Mallya, Senior Programme Lead, Council on Energy, Environment and Water (CEEW), said: "Banking of renewable energy is a significant enabler for green hydrogen production as it will increase the capacity utilisation of electrolysers used to produce hydrogen as solar and wind are only intermittently available."

However, according to CEEW analysis, this will also lead to a lower production cost by up to 40 per cent, if there are no banking charges.

Manoj K. Upadhyay, Founder & Chairman, ACME Group, which called itself an early mover in the sector, said: "This policy is the first concrete step in the direction of creating a favourable regulatory and enabling environment for the green hydrogen and ammonia sector in India."

Noting that the government has tried to address some of the key demands of the industry in terms of open access, grid banking and faster approvals for green hydrogen and ammonia projects, he said: "We specifically welcome the provisions to set up bunkers near ports for the export of green ammonia."

He also said that it will be important to build upon the first phase and will need the government to subsequently come up with policy measures for initial demand creation by means of mandatory green hydrogen and ammonia purchase obligations.

"At the same time, what is also needed is an equivalent of PLI scheme for green ammonia to make India competitive globally," Upadhyay added.

Citing yet another aspect, Gaurav Moda, Partner & Energy Leader, EY, termed the National Hydrogen Mission as a clear commitment from the government towards a greener future for our generations to come and the specific policy push through it "is to bring generation cost down to viable levels making Hydrogen competitive and scalable".

"This will make it attractive for use, not just in commercial and industrial areas, but potentially also in the critical transportation sector across the country within next few years as fuel cell technology matures further, especially for trucks which account for more than 40 per cent of total transportation fuels consumed today," he added.