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Green Hydrogen: Towards a carbon neutral economy in India

23 Feb 2023

Hydrogen is seen as the next big step in India’s journey towards a carbon neutral economy. This update summarises some of the key aspects of India's Green Hydrogen Mission, Green Hydrogen Policy and the future outlook for a green hydrogen economy in India.


India’s energy future is at a pivotal point, given its commitment to cut down carbon emissions by 2030 and achieve zero-carbon emissions by 2070. Historically, it has relied on imports from oil-rich nations to fulfil its fuel and energy demands. However, recent world events such as the Russia-Ukraine war have shown the unsustainability of this approach. While solar PV and lithium-ion batteries have led the energy transition to low-carbon, clean technologies globally, India’s success in manufacturing them at an economical industrial scale has been limited. Hydrogen, especially green hydrogen, is therefore seen as the next step in India’s transition to a carbon-neutral economy. Green hydrogen can also be used to produce green ammonia, another renewable, carbon-free source of energy, mainly used in the manufacture of fertilisers. In fact, ‘The Energy and Resources Institute‘ (TERI) hails green hydrogen as the next ‘clean energy prize‘ requiring coordinated action from the Indian government and energy industry to reap its benefits.

What is green hydrogen?

Hydrogen is the only gas that does not emit any carbon dioxide upon burning and leaves water as its residue. Depending upon the method of its production (which can be carbon-intensive), hydrogen is classified as brown, blue, grey, green and recently, even turquoise. Grey and blue hydrogen are produced by splitting methane with steam into hydrogen and carbon dioxide. However, the capture and storage of carbon dioxide produced from this method is cost-intensive and hence production at an industrial scale may not be economically viable. Green hydrogen is the only type that is produced in a climate-neutral manner by the electrolysis of water, splitting it into hydrogen and oxygen, using renewable sources of energy.

Given the current state of technology, while green hydrogen is considered one of the key drivers to achieving net zero-emission targets, the biggest challenge in adopting a green hydrogen economy is its cost of production and long-term storage. Electrolysis is an expensive process requiring large amounts of electricity, the source of which should be renewable instead of conventional. Therefore, an optimum process to produce green hydrogen to the extent where the benefits of economies of scale can start kicking in, is not yet in place. The need of the hour is to have concerted efforts from both the government and industry players to incentivise and economise the production of green hydrogen, respectively.

To this end, the government announced the proposal of a National Hydrogen Mission on 15 August 2021 and released its Green Hydrogen Policy (Policy) on 17 February 2022. In January 2023, the government approved the National Green Hydrogen Mission (Mission) with an initial outlay of INR 19,744 crore to achieve the objective of making India a ‘global hub‘ for production, usage and export of green hydrogen. The Mission and the Policy are discussed below.

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