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Business News/ News / India/  Gujarat’s draft green hydrogen policy to be ready in 2 months
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Gujarat’s draft green hydrogen policy to be ready in 2 months

The introduction of green hydrogen is set to revolutionize the industrial landscape in Gujarat, leading to a significant reduction in carbon emissions resulting from decreased consumption of fossil fuels, such as natural gas and coal, which are currently used for grey hydrogen production.

To incentivize green hydrogen investments, the Gujarat government has announced a land allotment policy. (File Photo: Bloomberg)Premium
To incentivize green hydrogen investments, the Gujarat government has announced a land allotment policy. (File Photo: Bloomberg)

New Delhi: In line with India’s ambitious target of reducing carbon emissions by 45% by 2030, the Gujarat government is gearing up to formulate a comprehensive policy for green hydrogen manufacturing.

The draft policy is expected to be ready within the next two months, following consultations with stakeholders and adherence to the guidelines of the Ministry of Environment, Forest, and Climate Change.

Gujarat Urja Vikas Nigam Ltd (GUVNL), the state’s leading power utility, has been actively engaged in formulating the draft policy. “GUVNL is in the process of formulating a draft Green Hydrogen policy to promote and facilitate the development of Green Hydrogen projects," said a senior official with GUVNL. “We had one-on-one meetings with stakeholders from May 16-24 May 2023."

The introduction of green hydrogen is set to revolutionize the industrial landscape in Gujarat, leading to a significant reduction in carbon emissions resulting from decreased consumption of fossil fuels, such as natural gas and coal, which are currently used for grey hydrogen production.

With over 98% of hydrogen currently utilized in refineries and fertilizers, establishing green hydrogen plants in these areas or their vicinity would be a natural progression. Initial adoption of green hydrogen can take place within existing plants, paving the way for broader implementation across various industries.

Gujarat’s favourable industrial ecosystem and robust policy framework position the state as a major hub for green energy and its associated ecosystem. An estimated investment of 10 trillion ($13.7 billion) is anticipated in the state’s green energy sector, with major conglomerates such as Reliance and Adani pledging investments worth over 10 lakh crore through memorandums of understanding (MoUs) signed with the government. These investments are projected to facilitate the annual production of three million tonne of green hydrogen.

Additionally, companies like ArcelorMittal and Torrent have also inked MoUs for investments in green energy projects, further bolstering the state’s renewable energy infrastructure.

To incentivize green hydrogen investments, the Gujarat government has announced a land allotment policy that offers several benefits to companies investing in the state’s green hydrogen projects. As per the policy, companies must meet 50% of their green hydrogen production capacity within five years of plant commissioning and achieve 100% capacity within eight years.

Interested companies can apply for land with a minimum production capacity of one lakh metric tonne per year. Applicants should have experience in generating at least 500 MW of solar, wind, or hybrid power and should be current users of brown, grey, or blue hydrogen with an annual requirement of one lakh metric tonne or more. The land, provided on a 40-year lease during the initial period, will be deemed non-agricultural and will be subject to an annual rent of 15,000 per hectare, increasing by 15% every three years.

Availability of land, water resources, transmission and evacuation facilities, and port connectivity will be crucial factors in determining the location of green hydrogen plants. To facilitate the establishment of such plants, the state government has already allotted 1.99 lakh hectares of land on the Kutch-Banaskantha border to various companies, including Reliance, Adani, Torrent, and ArcelorMittal.

With the large-scale production of green hydrogen requiring significant amounts of renewable energy, Gujarat’s renewable energy capacity will witness substantial growth. The Land Policy-2023 of Gujarat aims to achieve a production target of three million tonne per annum, resulting in an increased requirement of 165 billion units of renewable energy. Gujarat’s total power requirement for the fiscal year 2022-23 is projected to be 120 billion units.

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Published: 26 May 2023, 04:36 PM IST
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