Why in news?
A joint report by the Federation of Indian Chambers of Commerce and Industry (FICCI) and Ernst & Young released in August 2025 concluded that India could capture up to 10% of the global green hydrogen market if it invests in infrastructure and policies to drive demand. The report recommends redirecting fossil fuel subsidies and mandating industry uptake to create a reliable domestic market.
What is green hydrogen?
Green hydrogen is produced by splitting water molecules using electricity generated from renewable sources such as solar and wind. This process emits no greenhouse gases, making green hydrogen a clean alternative to fossil fuels for sectors like steel, fertiliser, heavy transport and shipping.
India’s current efforts
- National Green Hydrogen Mission: Launched in 2023 with an outlay of ₹19,744 crore, the mission aims to build 5 million tonnes of annual production capacity by 2030. This requires an estimated 125 gigawatts of new renewable capacity.
- Pilot projects: About 37 hydrogen‑powered vehicles and nine refuelling stations are being tested in India. Present costs of green hydrogen range between $4 and $4.5 per kilogram but are projected to drop to $3–3.75 by 2030.
Challenges
- High early costs: Green hydrogen currently costs nearly twice as much as hydrogen produced from natural gas or coal.
- Subsidy structure: Fossil fuel subsidies distort energy prices and discourage investment in clean alternatives.
- Infrastructure gaps: India lacks dedicated hydrogen pipelines, storage facilities and port infrastructure. Integrating renewable energy with electrolyser plants poses technical challenges.
- Demand uncertainty: Without policy mandates, industries may be reluctant to switch to green hydrogen because of higher costs and lack of supply security.
Recommendations
- Redirect subsidies: Gradually reduce fossil fuel subsidies and channel savings into green hydrogen projects.
- Hydrogen purchase obligation: Introduce mandatory quotas requiring fertiliser producers, refineries and steel plants to purchase a certain share of green hydrogen.
- Carbon pricing and incentives: Impose a carbon price on polluting industries while offering incentives for early adoption of green hydrogen.
- Export strategy: Develop infrastructure and bilateral agreements to supply hydrogen to markets in Europe, Japan and South Korea, where demand is expected to rise.
- Support innovation: Invest in research to develop efficient electrolysers and support domestic manufacturing.
Conclusion
The global green hydrogen market is poised to grow rapidly in the coming decade. By leveraging its abundant renewable resources and implementing supportive policies, India can become a major producer and exporter, strengthen energy security and help meet climate goals.