Green Hydrogen Policy and National Mission: India’s Net-Zero Fuel and UPSC Notes (UPSC Environment)

Green hydrogen is hydrogen produced by splitting water with electricity from renewable sources. It emits no carbon dioxide when made and no carbon dioxide when used, making it the only zero-carbon fuel that is also energy-dense enough to replace fossil fuels in hard-to-electrify sectors such as steel, fertiliser, refining, long-haul shipping and heavy-duty transport. India’s Green Hydrogen Policy of 2022 and the National Green Hydrogen Mission of 2023 set the country on course to become a global hub for green hydrogen production. The topic is central to UPSC GS Paper III (energy, environment, science and technology).

Why green hydrogen

Hydrogen is the most abundant element in the universe, but it does not occur in pure form on Earth. It must be produced from hydrogen-bearing compounds like water or hydrocarbons.

• Energy density: Almost three times that of diesel by weight, which makes it suitable for heavy transport and aviation.
• Zero emissions at use: Combusting hydrogen or running it through a fuel cell produces only water and energy.
• Energy storage: Green hydrogen can store excess renewable electricity for later use, a critical function as solar and wind penetration rises.
• Decarbonisation of hard sectors: Replaces coke in steel making, grey hydrogen in fertiliser, and bunker fuel in shipping.

The International Renewable Energy Agency (IRENA) projects that hydrogen will make up 12 percent of the global energy mix by 2050, with two-thirds sourced from water electrolysis powered by renewables.

India's hydrogen advantage

• Ideal geography with vast solar irradiation, long coastlines for wind and ports for export.
• Low renewable energy costs, already among the world's lowest.
• Existing gas pipeline infrastructure in parts of the country.
• Large industrial demand from refining, fertiliser, steel and chemicals that currently uses "grey" hydrogen from natural gas.
• Strategic push for energy independence: India imports over 80 percent of its crude oil.

Types of hydrogen by colour

• Grey hydrogen: From natural gas with emissions released; dominant global form today.
• Brown/Black hydrogen: From coal with emissions released.
• Blue hydrogen: From natural gas with carbon capture and storage.
• Pink hydrogen: From water electrolysis using nuclear electricity.
• Turquoise hydrogen: From methane pyrolysis, producing solid carbon.
• Green hydrogen: From water electrolysis using renewable electricity. Zero emissions at production. Currently less than 1 percent of global hydrogen.

Green Hydrogen Policy, 2022

The Ministry of Power notified the Green Hydrogen/Green Ammonia Policy in February 2022 to promote domestic production capacity.

Incentives for production

• 25-year waiver of inter-state transmission charges for renewable energy used to produce green hydrogen, if the plant is commissioned before 31 December 2030.
• Single-window clearance portal for all clearances related to green hydrogen production.
• Banking facility: Producers can bank excess renewable energy with discoms for up to 30 days and use it when needed.
• Priority grid connectivity for green hydrogen projects, easing operational processes.
• Open access: Time-bound grant of open access for sourcing renewable electricity.
• Renewable Purchase Obligation (RPO) credit: Discoms procuring renewable energy for green hydrogen producers get it counted against their RPO.
• Export promotion: Port authorities will provide land at applicable charges for green hydrogen and green ammonia bunkers near ports. Germany and Japan are key markets.

National Green Hydrogen Mission, 2023

Approved by the Cabinet in January 2023 with an outlay of Rs 19,744 crore up to 2029-30.

Targets

• At least 5 million tonnes per annum (MMTPA) of green hydrogen production capacity by 2030.
• Associated renewable energy capacity addition of about 125 GW.
• Cumulative investment of over Rs 8 lakh crore.
• Cumulative reduction of 50 MMTPA of carbon dioxide emissions.
• 6 lakh jobs created.
• Fossil fuel import reduction of over Rs 1 lakh crore.

Key components

• SIGHT (Strategic Interventions for Green Hydrogen Transition): Financial incentives for electrolyser manufacturing and green hydrogen production.
• Hydrogen Hubs: At least two green hydrogen hubs with manufacturing, production, use and export facilities.
• Pilot projects in steel, mobility, shipping and decentralised energy.
• R&D programme focused on electrolyser cost reduction, hydrogen storage and fuel cells.
• Skilling, regulations and standards to build the hydrogen ecosystem.

Benefits for India

• Clean energy transition: Drives the 500 GW non-fossil capacity target for 2030 and net-zero by 2070.
• Energy security: Reduces dependence on imported fossil fuels.
• Industrial decarbonisation: Replaces grey hydrogen in refining, fertiliser and steel with green hydrogen.
• Export opportunity: India could become a leading exporter to Europe, Japan and Korea.
• Indigenous manufacturing: Electrolyser production, fuel cells and storage create a new domestic industry.
• Job creation: Projected 6 lakh direct jobs by 2030.

Challenges

Technology

Compressing or liquefying hydrogen is difficult. Liquid hydrogen must be stored at minus 253 C, far colder than LNG at minus 163 C. This makes distribution and storage infrastructure expensive.

Cost

The production cost of green hydrogen is currently about USD 4 to 5 per kg in India. To be competitive with grey hydrogen (around USD 1.5 to 2 per kg), costs must fall substantially. IRENA projects that in countries with excellent renewable resources, green hydrogen can reach USD 1.5 per kg by 2030 with aggressive scaling.

Electrolyser manufacturing

Global electrolyser capacity is about 0.3 GW per year, while net-zero scenarios require almost 5,000 GW by 2050. India has no significant domestic electrolyser manufacturing ecosystem yet.

Fuel cell cost

Hydrogen fuel cells for cars and trucks are still far more expensive than batteries or internal combustion engines per mile.

Refuelling infrastructure

Hydrogen refuelling stations are scarce. India had under 10 stations in early 2025, against the hundreds needed for heavy-duty transport.

Water use

Electrolysis consumes about 9 litres of water per kg of hydrogen. Siting green hydrogen plants in water-stressed regions raises trade-offs.

Safety

Hydrogen is highly flammable and has a wide flammability range. Standards, certification and safety training are nascent.

Way forward

• Massive investment in R&D and infrastructure for electrolysers, storage and transportation.
• Time-bound manufacturing PLI (Production-Linked Incentive) for electrolysers, with one auction completed in 2024 and more expected.
• Incentives for pilot projects in steel (DRI-EAF with hydrogen), refining, fertiliser and transport.
• Mainstream fuel cells and HCNG (hydrogen-enriched CNG) blends for urban transport.
• International partnerships with Germany, Japan, Korea and the EU for offtake agreements.
• Water-use standards and planning to avoid siting conflicts.
• Safety codes, standards and training aligned with international frameworks.

Latest developments (2024-26)

• SIGHT Tranche I auctions completed in 2024 allocating subsidies to electrolyser manufacturers and green hydrogen producers.
• Green hydrogen hubs: Pipavav (Gujarat) and Tuticorin (Tamil Nadu) were announced in 2024 as the first hydrogen hubs.
• Hydrogen for steel: Tata Steel and SAIL commissioned pilot DRI-H2 units in 2024 and 2025.
• Hydrogen-fuelled bus and truck trials: Delhi-Jaipur green hydrogen corridor pilot launched in 2024.
• Green ammonia export: India's first shipment of green ammonia to Europe announced in 2025.
• COP29 Baku (2024): India's updated NDCs highlighted green hydrogen as a central decarbonisation pillar for 2030.
• PLI scheme for electrolysers expanded in 2025 with a target of 15 GW of domestic manufacturing by 2030.
• IMO regulations tightened shipping emissions rules from 2024, making green ammonia an attractive bunker fuel.

UPSC Relevance

Prelims focus

• Ministry of Power, Green Hydrogen Policy 2022.
• National Green Hydrogen Mission 2023: outlay Rs 19,744 crore, target 5 MMTPA by 2030.
• SIGHT programme and two sub-components (electrolyser PLI and hydrogen production incentive).
• Types of hydrogen by colour (green, blue, grey, pink).
• Storage temperature (minus 253 C).
• Electrolyser technology: alkaline, PEM, SOEC.

Mains focus (GS III)

Typical question framings examine the role of green hydrogen in India's energy transition, the cost and technology challenges, the strategic implications for energy independence, and the industrial decarbonisation benefits. Strong answers integrate the 2022 policy and 2023 Mission, reference international comparisons with the EU Hydrogen Strategy and US Inflation Reduction Act, and address trade-offs (water, cost, safety).

Linkages

Green hydrogen connects to SDG 7 (affordable clean energy), SDG 13 (climate action), India's NDCs post-COP29, the 500 GW non-fossil capacity target, the Paris Agreement, the Energy Conservation Amendment Act 2022, the Indian Carbon Market, and the International Solar Alliance for export partnerships.