The Indian government is focusing its efforts on building a Green Hydrogen ecosystem in the country in its journey to achieve Carbon neutrality by the year 2070. 

To promote investment and interest in production, storage and other things related to green H2 the government has introduced detailed guidelines for the Production linked incentive (PLI) of Green Hydrogen.

The Incentive will be divided in two categories. One part will be for- Production of Green Hydrogen and the other will be for- Manufacturing of Electrolyser.

The country has already introduced a number of incentives previously in other sectors like Automobiles, electronics, semi-conductors etc. which has motivated a lot of budding start-ups and established companies to invest in products like electric vehicles, battery packs, charging stations, renewable energy etc.

One of the best known incentives is the FAME subsidy which gives monetary incentives on purchase of electric vehicles. Not only that but other incentives such as no registration fees, road tax and other exemptions are also currently availed by EV drivers.

Incentive on Green Hydrogen Production

For Green hydrogen Production, a total of INR 13,050 crore budget has been set up. The Incentive to develop Green Hydrogen Ecosystem will be provided to those setting up business in Green H2 production and will start from the date the unit starts production of H2 and continue till three years of the beginning.

The process of availing the scheme will be competition based where preference will be given to those quoting minimum fiscal incentive. Though no lower limit is set, the government has set up a maximum upper limit- INR 50/KG in the first year of starting the production, then reducing it to INR 40/KG and INR 30/KG in the following two years respectively.

Additional Incentives for technologies used in the production of green hydrogen like defining specific allocation for Biomass based pathways are also being given, making it a well structured framework under which the PLI would be given.

Incentive on Manufacturing of Electrolysers

In the development of a Green Hydrogen Ecosystem, manufacturing of Electrolysers will receive a total of INR 4,440 crore of incentive. The Incentive will start from the day the business starts manufacturing and continue for five years. To be eligible for the Electrolysers PLI, two additional parameters have been added. 

First parameter focuses on Specific Energy consumption (SEC), meaning the amount of energy used to produce a product unit. It will give preference and award businesses with high performers who use less energy for production.

The second parameter focuses on Local Value Edition (LVE), meaning enhancement of the value of unit price imported products produced at the factory. Those who achieve and go beyond the minimum set limit of LVE will be eligible for the Manufacturing of Electrolysers PLI. 

Participants who will be able to achieve both SEC and LVE parameters set by the state will have their chances increased as the recipient of the Incentive. 

The Incentive given would start at INR 4,400 per KiloWatt and will go down year by year for five years.

The Solar Energy Corporation of India (SECI) has been given the responsibility of appraising the applicants applying for the responsibility. 

Both the Green Hydrogen production Industry and Electrolysers manufacturing industry will be inter-connected as they are essential parts in building a Green Hydrogen Ecosystem and will have to partner with each other to form joint ventures for application purposes. It will be interesting to see how different manufacturers will partner up with each other to increase the maximum level efficiency.

Green Hydrogen Ecosystem of India

The Green hydrogen Ecosystem of India is at its very beginning stages. With an impressive growth in renewable energy, the country also wants to produce clean fuel and establish a strong and stable foothold in the global market. It wants to create its image as a strong force and reduce its dependency on foreign nations for fuels.