Centre rolls out norms for green hydrogen sops, incentive capped at Rs50/kg

New Delhi: The union ministry of new and renewable energy on Wednesday rolled out the guidelines for the much-anticipated incentive schemes for green hydrogen and electrolyzers.

A notification from the ministry said that out of the ₹17,490 crore allocated for the Strategic Interventions for Green Hydrogen Transition Programme (SIGHT), ₹13,050 crore would go for incentivizing production of green hydrogen, while another ₹4,440 crore would go for electrolyzer production.

Under the scheme, a direct incentive in terms of ₹per kilogram of green hydrogen will be provided for a period of three years from the date of commencement of green hydrogen production.

Beneficiaries under the scheme will be selected through a competitive selection process.

The notification said that the incentives will be capped at ₹50 per kg in the first year of production, ₹40 per kg during the second year of production and ₹30 per kg in the third year of production.

On April 6, Mint had reported that an incentives for green hydrogen production may be capped at ₹50 per kg. 

It would be the first mode of incentive for green hydrogen production. The ministry also said that in the second mode, the implemeting agency, in a bid to provide demand assurance to producers would aggregate demand and will call for bids for procurement of green hydrogen and its derivatives at the lowest cost through a competitive selection process.

In terms of support for electrolyzer production, the ministry would provide a base incentive of ₹4,400 per kilowatt in the first year of production, which will gradually decline on an annual basis.

The incentives for electrolyzers will be provided for five years from the date of commencement of manufacturing of electrolyzers.

The incentive schemes were announced after the union cabinet approved the National Green Hydrogen Mission earlier this year with an aim to produce 5 million tonne green hydrogen annually and make India a global green hydrogen hub.