New Delhi, December 14 (ANI): India’s hydrogen demand is projected to nearly double to about 12 million tonnes per annum (mtpa) by 2030, driven primarily by fertilisers, refining and petrochemical sectors, according to a report by Nuvama Institutional Equities.
The report estimates that fertilisers will account for more than half of total demand, reaching around 6.1 mtpa by 2030. Refineries are expected to consume about 4.5 mtpa, while petrochemicals could add another 1.3 mtpa as new capacities are commissioned.
In the long term, green hydrogen (GH2) is also expected to find applications in steelmaking, long-haul heavy-duty transport, shipping and power generation. However, the report notes that these sectors are likely to emerge as major consumers only beyond 2030.
India’s transition is being guided by the National Green Hydrogen Mission, launched in early 2023, with an outlay of approximately Rs 197 billion. A large share of this funding is channelled through the Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme, which supports green hydrogen production, consumption and electrolyser manufacturing. Additional support comes from pilot projects, research and development initiatives, and other mission components.
Since the announcement of the green hydrogen policy in 2022, 13 Indian states have rolled out their own incentive frameworks. These include waivers on power transmission charges, subsidies, interest support, training programmes, and concessions related to land and state taxes. Combined central and state-level measures could create a policy support pool of nearly USD 61 billion, providing significant opportunities for industry participation.
Despite strong policy backing, high costs remain a key challenge. Green hydrogen currently costs between USD 3.5 and 4 per kg, compared to about USD 2.2 per kg for grey hydrogen. The report suggests that policy measures and market improvements could reduce green hydrogen costs by up to USD 1.9 per kg, with waivers on power banking and open access charges alone potentially cutting nearly one-fourth of the cost. Further reductions are expected from falling electrolyser prices and cheaper renewable energy.
The report also highlights India’s export ambitions in green ammonia, noting that recent tender prices of USD 594–774 per tonne indicate better commercial prospects than historical grey ammonia prices. However, higher financing costs and lower plant load factors may offset India’s advantage of lower solar and wind power costs.
On the technology front, electrolyser stack costs could decline by up to 75 per cent through innovation, alternative materials and domestic manufacturing. Up to 88 per cent of the electrolyser supply chain can potentially be localised in India, reducing import dependence.
Overall, the report concludes that while large-scale adoption of green hydrogen in new sectors may take time, current efforts are focused on cost reduction and infrastructure development to support future demand growth.
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