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Electrolyser
Fuel cell
Low Carbon
Products
Electrolyser
Ammonia
Report /
June 2022
Harnessing
GREEN HYDROGEN
OPPORTUNITIES FOR DEEP DECARBONISATION IN INDIA Authors
Kowtham Raj, NITI Aayog
Pranav Lakhina, RMI
Clay Stranger, RMI
Leadership
The team is grateful for the mentorship and inputs provided by:
Amitabh Kant, NITI Aayog
Dr. Rakesh Sarwal, NITI Aayog
Rajnath Ram, NITI Aayog
Manoj Kumar Upadhyay, NITI Aayog
Contacts
For more information, contact: rajnath-pc@gov.in / info@rmi.org
Acknowledgments
The team is grateful for the input and contributions received:
Thomas Koch Blank, RMI
Patrick Molloy, RMI
Emily Beagle, RMI
Akshima Ghate, RMI India
Jagabanta Ningthoujam, RMI India
Arjun Gupta, RMI India
Isha Kulkarni, RMI India
Nikunj Deep Singh, NITI Aayog
We would also like to thank the following organizations who provided valuable inputs that shaped
the contour of the report:
Ministry of Power (MoP)
The Energy and Resources Institute (TERI)
Council on Energy, Environment and Water (CEEW)
Boston Consulting Group (BCG)
Engineers India Limited (EIL)
Copyrights and Citation
NITI Aayog: https://www.niti.gov.in/documents/reports/
RMI: https://rmi.org/insight/harnessing-green-hydrogen/
RMI values collaboration and aims to accelerate the energy transitiowork through the Creative
Commons CC BY-SA 4.0 license. https://creativecommons.org/licenses/by-sa/4.0/
All images used are from iStock.com and shutterstock unless otherwise noted.
Cover page desiged by: YAAP. Report design by: Ants at work
Authors & Acknowledgments
www.niti.gov.in | www.rmi.org /
3Harnessing Green Hydrogen About Us
About RMI
RMI is an independent nonprofit founded in 1982 that transforms global energy systems through
market-driven solutions to align with a 1.5
°
C future and secure a clean, prosperous, zero-
carbon future for all. We work in the world’s most critical geographies and engage businesses,
policymakers, communities, and NGOs to identify and scale energy system interventions that
will cut greenhouse gas emissions at least 50 percent by 2030. RMI has offices in Basalt and
Boulder, Colorado; New York City; Oakland, California; Washington, D.C.; and Beijing. RMI has been
supporting India’s mobility and energy transformation since 2016.
About NITI Aayog
The National Institution for Transforming India (NITI Aayog) was formed via a resolution of the
Union Cabinet on 1 January 2015. NITI Aayog is the premier policy ‘Think Tank’ of the Government
of India, providing both directional and policy inputs. While designing strategic and long-term
policies and programmes for the Government of India, NITI Aayog also provides relevant technical
advice to the Centre and States. The Government of India, in keeping with its reform agenda,
constituted the NITI Aayog to replace the Planning Commission instituted in 1950. This was done in
order to better serve the needs and aspirations of the people of India. An important evolutionary
change from the past, NITI Aayog acts as the quintessential platform of the Government of India
to bring States to act together in national interest, and thereby fosters Cooperative Federalism.
www.niti.gov.in | www.rmi.org /
4Harnessing Green Hydrogen Table of Contents
Foreword
Preface
Executive Summary
Towards a National Action Plan on Green Hydrogen
Introduction
Hydrogen fundamentals
Production
Transportation and Storage
Emerging Importance of Hydrogen
Global Hydrogen Supply and Demand—Where Is Hydrogen Now and Where Is It Heading?
What Could Hydrogen Mean for India?
The Future of Hydrogen in India
Green Hydrogen Production in India
Demand Prospect for Hydrogen in India
The Potential for Green Hydrogen
Near-Term Market Development
Manufacturing Opportunities
India’s Electrolyser Demand
Technology Review and Implications for India
Encouraging Electrolyser Manufacturing
A Production-Linked Incentive Scheme for Electrolysers
Research and Development Program
Export Opportunities
Hydrogen Export Opportunities
Green Hydrogen-Embedded Low-Carbon Products
Key Takeaway
Steps to make India a global hub of green hydrogen
Conclusion
Appendices
Appendix A: Global Examples of Hydrogen Strategies and Roadmap
Appendix B: Sectoral Demand Assessment
Endnotes
www.niti.gov.in | www.rmi.org /
5Harnessing Green Hydrogen
05
09
11
16
26
44
52
60
68
70
80 Foreword
www.niti.gov.in | www.rmi.org /
6Harnessing Green Hydrogen
The publication of this report cannot come at a more opportune
time as the urgency to take aggressive action to fight climate
change has never been greater. The COP26 conference in Glasgow
signalled India’s willingness to show leadership in fighting climate
change. Prime Minister Narendra Modi put forth India’s vision to
achieve net zero by 2070, in addition to achieving aggressive near-
term targets such as 500 GW of renewables capacity, 50 percent
of requirements to be met with renewables, one billion tonne
reduction in cumulative emissions by 2030, and 45 percent lower
emissions intensity of gross domestic product (GDP) by 2030.
Addressing the nation on the 75
th
Independence Day, Prime
Minister Narendra Modi announced the National Hydrogen Mission
with an aim of making India a hub for the production and export of
green hydrogen. This is geared to make India energy independent
before the country completes 100 years of its independence in
2047. Currently, India spends over $160 billion of foreign exchange
every year for energy imports. These imports are likely to double
in the next 15 years without remedial action. This report intends to
highlight the unique ecosystem advantages India has and how the
stage is set for the country to become a global champion in green
hydrogen. The report works towards a hydrogen strategy that is
designed to construct a high-tech and low-carbon Indian brand.
If right steps are taken, the following targets can be achieved
by India:
1. The world’s largest electrolysis (green hydrogen generation)
capacity of over 60 GW/5 million tonnes by 2030 for
domestic consumption. This will help India meet the 500 GW
renewable energy target.
2. The world’s largest production of green steel at 15-20million
tonnes by 2030 — a pioneering effort to make green steel
mainstream for the world. www.niti.gov.in | www.rmi.org /
7Harnessing Green Hydrogen
3. The world’s largest electrolyser annual manufacturing
capacity of 25 GW by 2028 delivering affordable ones
for India and the world.
4. The world’s largest production of green ammonia for
exports by 2030 helping India’s allies to decarbonise.
This may require up to 100 GW of green hydrogen.
5. $1 billion investment into hydrogen research and
development to enable breakthrough technologies for
the world at scale and the speed that is required.
With proactive collaboration among innovators, entrepreneurs
and government, green hydrogen has the potential to drastically
reduce CO
2
emissions, fight climate change, and put India on
a path towards net-zero energy imports. It will also help India
export high-value green products making it one of the first major
economies to industrialise without the need to ‘carbonise’. This
report is a result of 12 months of intensive consultative analysis by
NITI Aayog and complemented by independent techno-economic
modelling of RMI.
Amitabh Kant, CEO (NITI Aayog) Foreword
www.niti.gov.in | www.rmi.org /
8Harnessing Green Hydrogen
India is undertaking a resolute march towards a sustainable
energy future. Prime Minister Narendra Modi’s pledge at COP26
towards a net-zero India by 2070 promises to accelerate this
momentum. Much action will be required to fulfil these pledges.
Central to a decarbonised India will be a widespread adoption
of renewable power and vehicle electrification. Targets and
policies such as the 500 GW non-fossil fuel electricity capacity by
2030, scheme for Faster Adoption and Manufacturing of Electric
Vehicles- Phase II (FAME II), and ₹18,100 crore production-linked
incentives for encouraging manufacturing of advanced cell
chemistry (ACC) batteries in the country, represent a concrete
policy push towards fulfilling these ambitions.
To further complement these ongoing efforts, India is prioritising
green hydrogen as a potential solution to decarbonise hard-to-
abate sectors such as refinery, ammonia, methanol, iron and steel
and heavy-duty trucking. Prime Minister Modi recently announced
the National Hydrogen Mission with the aim of making India the
world’s largest hydrogen hub. The efforts of the Mission has
resulted in the recently approved Green Hydrogen Policy.
India’s distinct advantage in terms of low-cost renewable electricity,
complemented by rapidly falling electrolyser prices, can enable
green hydrogen to be not just economical compared to fossil-fuel
based hydrogen but also compared to the green hydrogen being
produced around the globe.
Adoption of green hydrogen can enable India to abate 3.6
gigatonnes of CO
2
emissions cumulatively between now and 2050.
This can be a significant lever for the nation to contribute towards
its recently announced climate targets and net-zero vision. www.niti.gov.in | www.rmi.org /
9Harnessing Green Hydrogen
As highlighted in this report, India can target the following areas to
make a successful transition to green hydrogen.
• Both near-term and long-term policy pathways to reduce the
cost of green hydrogen need to be encouraged to enable cost
competitiveness against alternatives.
• A cost-competitive green hydrogen is bound to lead to market
creation. But the government can also encourage near-term
market development by identifying industrial clusters and
enacting associated viability gap funding and mandates.
• An emerging green hydrogen economy means opportunities
around research and development and manufacturing
of components such as electrolysers and fuel cells, crucial to
enabling the industry to develop and scale.
• A globally competitive green hydrogen industry also leads to
prospects of exports of green hydrogen and hydrogen-
embedded low-carbon products such as green ammonia and
green steel.
India is at a crucial juncture in terms of its energy landscape and
green hydrogen has a critical role to play to make the nation self-
reliant and energy-independent. Hydrogen can be an energy molecule
that is truly ‘made-in-India’ and that can contribute to the country’s
energy security and long-term economic competitiveness. India
has the unique opportunity to capitalise on this new technology
and become a world leader in green hydrogen production and its
applications.
We would like to congratulate NITI Aayog for its leadership and
partnership in the development of this report and for laying out a
green hydrogen roadmap. We hope this report will provide useful
inputs for the National Hydrogen Mission and its planning and
implementation.
Clay Stranger (Managing Director, RMI) Preface
The Ministry of Power (MoP) recently unveiled the first part of India’s much awaited
Green Hydrogen Policy on February 17, 2022. The policy is one of the key outcomes
of the National Hydrogen Mission which was launched by the Hon’ble Prime Minister,
Shri Narendra Modi, on India’s 75
th
Independence Day last year. It marks the culmination
of months of efforts across multiple ministries and stakeholder groups, and affirms
India’s intent to be a global green hydrogen hub.
There is also an increased consensus around the world that concerted steps need to
be taken to reduce global warming to levels less than 2°C and if possible to cap it at
1.5°C higher than pre-industrial levels. Various countries have pledged their Nationally
Determined Contributions to ensure energy transition and reduce emissions.
This report aspires to serve as one of the key knowledge bases for the benefit of India’s
Green Hydrogen Policy discourse and private sector investment decisions. It was
developed over the course of a year by the NITI Aayog team with RMI as the knowledge
partner. Beyond primary analysis, the report takes into account views expressed during
stakeholder engagements across academia, think tanks, private sector entities, and
startups. The report aims at providing the much-needed direction and insight for the
stakeholders to act on at this crucial juncture of industry building.
www.niti.gov.in | www.rmi.org /
10Harnessing Green Hydrogen
India’s Green Hydrogen Policy
Most large economies including India have committed to net zero targets. Transition to Green Hydrogen and
Green Ammonia is one of the major requirements for reduction of emissions, especially in the hard to abate
sectors. Government of India have had under consideration a number of policy measures in order to facilitate
the transition from fossil fuel I fossil fuel based feed stocks to Green Hydrogen / Green Ammonia both as
energy carriers and as chemical feed stock for different sectors. After careful consideration, the Government
of India have framed the policy on Green Hydrogen which provides the following:
1. Green Hydrogen / Green Ammonia shall be defined as Hydrogen / Ammonia produced by way of
electrolysis of water using Renewable Energy; including Renewable Energy which has been banked
and the Hydrogen/Ammonia produced from biomass. www.niti.gov.in | www.rmi.org /
11Harnessing Green Hydrogen
2. The waiver of inter-state transmission charges shall be granted for a period of 25 years to the producer of
Green Hydrogen and Green Ammonia from the projects commissioned before 30
th
June 2025.
3. Green Hydrogen / Green Ammonia can be manufactured by a developer by using Renewable Energy from
a co-located Renewable Energy plant, or sourced from a remotely located Renewable Energy plants,
whether set up by the same developer, or a third party or procured renewable energy from the Power
Exchange. Green Hydrogen/Green Ammonia plants will be granted Open Access for sourcing of Renewable
Energy within 15 days of receipt of application complete in all respects. The Open Access charges shall be in
accordance with Rules as laid down.
4. Banking shall be permitted for a period of 30 days for Renewable Energy used for making Green Hydrogen
/ Green Ammonia.
5. The charges for banking shall be as fixed by the State Commission which shall not be more than the cost
differential between the average tariff of renewable energy bought by the distribution licensee during the
previous year and the average market clearing price (MCP) in the Day Ahead Market (DAM) during the
month in which the Renewable Energy has been banked.
6. Connectivity, at the generation end and the Green Hydrogen / Green Ammonia manufacturing end, to
the ISTS for Renewable Energy capacity set up for the purpose of manufacturing Green Hydrogen / Green
Ammonia shall be granted on priority under the Electricity (Transmission system planning, development
and recovery of Inter State Transmission charges) Rules 2021.
7. Land in Renewable Energy Parks can be allotted for the manufacture of Green Hydrogen / Green Ammonia.
8. The Government of India proposes to set up Manufacturing Zones. Green Hydrogen / Green Ammonia
production plant can be set up in any of the Manufacturing Zones.
9. Manufacturers of Green Hydrogen / Green Ammonia shall be allowed to set up bunkers near Ports for
storage of Green Ammonia for export / use by shipping. The land for the storage purpose shall be provided
by the respective Port Authorities at applicable charges.
10. Renewable Energy consumed for the production of Green Hydrogen / Green Ammonia shall count towards
RPO compliance of the consuming entity. The renewable energy consumed beyond obligation of the
producer shall count towards RPO compliance of the DISCOM in whose area the project is located.
11. Distribution licensees may also procure and supply Renewable Energy to the manufacturers of Green
Hydrogen / Green Ammonia in their States. In such cases, the Distribution licensee shall only charge
the cost of procurement as well as the wheeling charges and a small margin as determined by the
State Commission.
12. Ministry of New and Renewable Energy (MNRE) will establish a single portal for all statutory clearances and
permissions required for manufacture, transportation, storage and distribution of Green Hydrogen / Green
Ammonia. The concerned agencies/authorities will be requested to provide the clearances and permissions
in a time-bound manner, preferably within a period of 30 days from the date of application.
13. In order to achieve competitive prices, MNRE may aggregate demand from different sectors and have
consolidated bids conducted for procurement of Green Hydrogen/Green Ammonia through any of the
designated implementing agencies. Executive
Summary www.niti.gov.in | www.rmi.org /
13Harnessing Green Hydrogen
Executive Summary
Hydrogen, as an energy carrier, is becoming crucial
for achieving decarbonization of hard-to-abate sectors.
Many sectors such as iron ore and steel, fertilizers,
refining, methanol, and maritime shipping emit major
amounts of CO
2
, and carbon-free hydrogen will play a
critical role in enabling deep decarbonization. For other
high-emitting sectors, such as heavy-duty trucking and
aviation, hydrogen is among the main options being
explored with an outlook to be the preferred solution
for several applications.
This has resulted in growing global momentum towards
hydrogen in general, and green hydrogen—hydrogen
produced through electrolysis of water using electricity
from renewable sources—in particular. Declining
prices of hydrogen, coupled with growing urgency for
decarbonization means the global demand for hydrogen
could grow by almost 400 percent by 2050, led by
industry and transportation.
1
A new growth momentum is emerging among various
nations. At least 43 countries have now set up or are
setting up strategies or roadmaps for a hydrogen
economy,
2
including financial incentives to accelerate
the transition. For India, this current impetus
surrounding the hydrogen transition fits well within the
context of a low-carbon economy, energy security, and
the larger economic development ambition of the nation.
The Prime Minister’s Independence Day speech on
August 15
th
, 2021, signalling the launch of the National
Hydrogen Mission, attests to India’s intent to be a global
hub for green hydrogen. As PM Modi’s speech outlines,
“not only will green hydrogen be the basis of green
growth through green jobs, but it will also set an example
for the world towards clean energy transition.”
3
India’s distinct advantage in low-cost renewable energy
generation makes green hydrogen the most competitive
form of hydrogen in the long run (Exhibit 1). This enables
India to potentially be one of the most competitive
producers of green hydrogen in the world. Green hydrogen
can achieve cost parity with natural gas-based hydrogen
(grey hydrogen) by 2030, if not before. Beyond cost, since
hydrogen is only as clean as its source of generation,
green hydrogen will be necessary to achieve a truly low-
carbon economy. It will also enable the emergence of a
domestically produced energy carrier that can reduce
the dependence on imports for key commodities like
natural gas and petroleum.
Exhibit 1Projected price trajectory of solar-green hydrogen production based on decline in electrolyser and
renewable costs
Source: IEA, BNEF, TERI, SECI, RMI Analysis | Currency conversion: $1 = ₹72
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
LCOH (US$/kg)
2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050
MOST COMPETITIVE BLUE H2
GREY H2 PRICE RANGE
GREEN H2 FROM ON SITE RENEWABLES
GREEN H2 FROM RTC RENEWABLES WITH T&D WAIVER
2030 prices:
Green H2: $1.7 - $2.4/kg
RTC Renewables: $2.1/kg
Grey H2: $1.8 - $2.7/kg
2050 prices:
Green H2: $0.6 - $1.2/kg
RTC Renewables: $0.9/kg
Grey H2: $1.9 - $2.9/kg www.niti.gov.in | www.rmi.org /
14Harnessing Green Hydrogen
Hydrogen demand in India could grow more than
fourfold by 2050, representing almost 10% of global
hydrogen demand.
4
Initial demand growth is expected
from mature markets like refinery, ammonia, and
methanol, which are already using hydrogen as
industrial feedstock and in chemical processes. In the
longer term, steel and heavy-duty trucking are likely to
drive the majority of demand growth, accounting for
almost 52% of total demand by 2050.
5
From a price parity basis alone, green hydrogen’s share
of this demand could grow from 16% in 2030 to almost
94% by 2050. This translates to an implied cumulative
electrolyser capacity demand of 20 GW by 2030 and
226 GW by 2050, promising a sizeable opportunity for
indigenous manufacturing of a global emerging energy
technology. The cumulative value of the green hydrogen
market in India could be $8 billion by 2030 and $340
billion by 2050. Electrolyser market size could be
approximately $5 billion by 2030 and $31 billion by 2050.
Adoption of green hydrogen will also result in 3.6 giga
tonnes of cumulative CO
2
emissions reductions between
2020 and 2050.
6
Energy import savings from green
hydrogen can range from $246 billion to $358 billion
within the same period.
7
Beyond the financial savings,
the energy security that green hydrogen provides will
translate to less volatile price inputs for India’s industries
as well as strengthen India’s foreign exchange situation
in the long run.
While the prospects for domestic demand and exports
are enticing, it’s also important to achieve the expected
decline in price. In the near-term, it’s crucial to focus
on domestic demand creation efforts, cost reduction
pathways, and early pilots, as well as to learn by doing in
competitive manufacturing of electrolysers. Limitation of
storage and the high cost of transportation means that
early market development should centre on identifying
clusters of industrial demand that could be served by
localized generation of hydrogen.
The government can reduce costs through preferential
electricity tariffs. And it can develop the market
Exhibit 2Hydrogen demand outlook and potential green hydrogen share at cost parity
(without policy intervention)
Source: MoS, MoC&F, MoPNG, IEA, TERI, BCG, World Bank, RMI Analysis
0.0
5.0
10.0
15.0
20.0
25.0
30.0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total Hydrogen Demand (Million Tonnes)
Green Hydrogen Share
2020204020502030
POWER
HDV
STEEL
METHANOL
AMMONIA
REFINERY
SHARE OF GREEN H2 www.niti.gov.in | www.rmi.org /
15Harnessing Green Hydrogen
through incentives and mandates for existing hydrogen-
consuming sectors like refinery and ammonia/fertilizer,
which will require comparatively lower transition support.
Such favourable policies can greatly increase demand
for hydrogen and the accompanying electrolyser
capacity required. It can provide a degree of near-term
demand certainty for the private sector, given the
risks associated with investment in early-stage energy
technologies like hydrogen. This demand certainty
can set the stage for green hydrogen to ride the cost
reduction curve and achieve scaled adoption in the long
term. And in the process it can lead to decarbonization,
energy and economic security, and indigenous
manufacturing.
A truly domestic energy carrier that is competitive
globally can also provide a unique opportunity to
participate in the energy and commodities trade. Given
the expected growth in global demand and the disparity
between producing and consuming nations, the need for
hydrogen trade is bound to emerge eventually. If volume
growth and price decline expectations can be met, this
hydrogen transition can enable industries to shape up in
India around exports of green hydrogen and hydrogen-
embedded low-carbon commodities like green ammonia
and green steel.
Towards a National Action Plan on
Green Hydrogen
Given the prospects that green hydrogen presents for
India, real action is required for the country to truly
benefit from the opportunities. This report provides ten
actionable steps that can guide a National Action Plan
on Green Hydrogen.
1. A detailed roadmap focused on all aspects of
‘Green Hydrogen’
The recent announcement of the National Hydrogen
Mission needs to be complemented with further policy
direction in the form of a national roadmap/strategy.
8
A long-term roadmap focused on green hydrogen will
improve investors’ confidence and will converge the
entire value chain and the various government agencies
towards a singular vision.
2. Intervene on the supply-side to reduce the cost
of green hydrogen to $1/kg
Similar to other technology deployment and scaling
efforts, government can encourage the cost economics
of early producers. The current Green Hydrogen policy
already focuses on measures like waiver of inter-state
transmission (ISTS) charges and granting of open access
for green hydrogen and green ammonia production.
Other measures could include reduction in taxes and
surcharges, preferential dollar-based electricity tariff,
revenue recycling of any carbon tax, low-emission power
purchase agreements (PPAs), and avenues for firming
electricity supply including discounted grid electricity
to complement variable renewable energy (VRE)
generation.
3. Establish mandates and provide incentives to
achieve a green hydrogen production capacity of
160 GW
The government can propose clear mandates around
hydrogen blending in existing (refinery and ammonia)
and potentially future consumption sectors (steel and
heavy-duty vehicles). This will provide demand certainty
for early green hydrogen projects and encourage market
development. For new applications, where the viability of
using green hydrogen is still nascent, the government can
provide incentives such as a production linked incentive
(PLI) scheme for green steel targeting export markets.
4. Build manufacturing capacity totalling 25GW
by 2030 coupled with supportive manufacturing
and R&D investments
The roadmap should also identify a timeline and scale
of manufacturing support for electrolysers. India may
aim for 25 GW of electrolysers by 2030, while also
investing $1 billion in R&D to catalyse the development
of commercial green hydrogen technologies across the
value chain. Radically improving the speed of regulatory
clearances coupled with preferential treatment in public
tenders will help catalyse local manufacturing. Grand
challenges, public-private venture capital and financing
test bench infrastructure could be part of the R&D
investments.
5. Initiate green hydrogen standards and a labelling
programme
Immediate action should be undertaken to further
develop standards and a green hydrogen labelling
programme. www.niti.gov.in | www.rmi.org /
16Harnessing Green Hydrogen
6. Promotion of exports of green hydrogen and green
hydrogen-embedded products through a global
hydrogen alliance
The government must explore integrating hydrogen into
existing energy and industrial partnerships globally.
This should include developing collective frameworks and
creating labelling and standards around green hydrogen
and hydrogen-embedded products like green steel and
green ammonia. The government should explore specific
near-term incentives around green ammonia and green steel
production.
7. Facilitate investment through demand aggregation
and dollar-based bidding for green hydrogen
The government can provide financial certainty to early
adopters through investment facilitation measures like
demand aggregation, ensuring availability of long-tenor
and low interest finance and initiation of a functioning
carbon market.
8. Encourage state-level action and policy making
related to Green Hydrogen
States should be encouraged to launch their own green
hydrogen-based policies in order to complement efforts at
the national-level. This way the champion green hydrogen
states could also be identified.
9. Encourage capacity building and skill development
Initiate appropriate and rapid skills development across the
ecosystem including government, industry, and academia
addressing technologies, business models, policies, and
geopolitics.
10. Construct an inter-ministerial governance structure
The government should create an interdisciplinary Project
Management Unit (PMU) with globally trained experts.
The PMU should dedicate fulltime resources to effectively
implement the mission. At the policy level, an inter-
ministerial mechanism should be instituted to coordinate
across the efforts of the various ministries and
departments required to achieve the target of the mission.
Exhibit 3Visionary 2030 electrolyzer target for green hydrogen production
Source: NITI Aayog * Note 1: 1 million tonnes of green hydrogen corresponds to around 11-13 GW of electrolyser capacity.
* Note 2: Additional demand could arise from electric fuels and 24X7 power storage depending on tech
and policy evolution
* Note 3: Exports (other H2 carriers) refers to a possible development of new H2 carriers. If new
carriers are not realised, Ammonia is likely to fulfil this portion of demand (41 GW).
GREEN HYDROGEN EXPORTS
PRODUCT EXPORT INCENTIVES
PILOTS
MANDATES / VIABILITY GAP FUNDING (VGF)
ADDRESSABLE DEMAND (RMI)
0
20
40
60
80
100
120
140
160
180
RefineryMethanolSteelHDVs CGDVisionary
Demand Target
Exports
(other H2 carriers)
Ammonia
GW of Electrolyzer Capacity
Million tonnes of H2
41 160
5
0.2
0.5
12.3
31
15
69
0
2
4
6
8
10
12
14 Introduction www.niti.gov.in | www.rmi.org /
18Harnessing Green Hydrogen
Introduction
The world is in a unique and necessary phase of energy
transition, where emerging low-carbon technologies are
replacing existing fossil fuel assets and are shaping a
new energy paradigm. Rise of technologies such as solar
and wind, lithium-ion batteries, and alternative fuels have
paved the way for decarbonization in various end-use
sectors. However, there are certain sectors like industry
and heavy transport that are hard to decarbonize using
the current low- or zero-carbon technologies. Hydrogen
promises to address those challenges and contribute to
the decarbonization of these hard-to-abate sectors.
Hydrogen fundamentals
Hydrogen is an energy carrier and can be used for a wide
array of energy and industrial applications. It can also be
stored for long time. The opportunities and challenges of
hydrogen emerge from its energy characteristics
(see Exhibit 4
9
). Hydrogen’s specific energy (i.e.,energy
content per unit of mass) is higher than most hydrocarbon
fuels. But its volumetric energy density is the lowest.
That means pressurization or liquefaction is required for
hydrogen to be useful as a fuel. These two properties
drive the value as well as the applicability of hydrogen
for the various possible end-use cases.
Production
Although hydrogen is the lightest and most abundant
element in the universe, it is rarely found in nature in its
elemental form and always must be extracted from other
hydrogen-containing compounds. It also means that how
well hydrogen contributes decarbonization depends on
how clean and green the method of production is.
Based on the sources and processes, hydrogen can be
classified into various colours:
• Black / Brown / Grey
hydrogen is produced via coal
or lignite gasification (black or
brown), or via a process called
steam methane reformation (SMR)
of natural gas or methane (grey).
These tend to be mostly carbon-
intensive processes.
• Blue hydrogen is produced
via natural gas or coal gasification
combined with carbon capture
storage (CCS) or carbon capture
use (CCU) technologies to reduce
carbon emissions.
• Green hydrogen is produced
using electrolysis of water with
electricity generated by renewable
energy. The carbon intensity
ultimately depends on the carbon
neutrality of the source of electricity
(i.e., the more renewable energy
there is in the electricity fuel
mix, the “greener” the hydrogen
produced).
Exhibit 4Energy density profile of different fuels
compared with Hydrogen
Source: World Bank ESMAP
Volumetric Energy Density (MJ/L)
0
20
40
60
80
100
120
140
160
0 5 10 15 20 25 30 35 40 45
Specific Energy (MJ/kg)
HYDROGEN (at 1 atm)
METHANOL
AMMONIA
GASOLINE
BIODIESEL
HEAVY FUEL OIL
NATURAL GAS
LNG
HYDROGEN (at 1,000 bar)
DIESEL
HYDROGEN (liquid) www.niti.gov.in | www.rmi.org /
19Harnessing Green Hydrogen
Central to the green hydrogen production process is
the electrolyser technology. Alkaline and polymer
electrolyte membrane (PEM) electrolysers are two
commercially available technologies for green hydrogen
production today. Advanced electrolyser technologies
like solid oxide and anion exchange membrane nearing
commercial deployment as well.
• Other less prevalent sources of production include
bio-hydrogen which can either be produced by an SMR
process around methane produced by anaerobic digestion
of organic waste or through a fermentation process
by bacteria.
Transportation and Storage
Storage and transportation of hydrogen have traditionally
been difficult due to the unique characteristics of the
gas—flammability, low density, ease of dispersion, and
embrittlement.
i
Yet technical development and commercial
impetus are increasingly enabling more economic modes of
storage and transportation.
Hydrogen has three main avenues for storage, each
with their own use cases and challenges:
• Storage Tanks are the simplest
and at times economical way to
store and transport hydrogen—
usually in the form of compressed
and cryo-compressed hydrogen.
ii
The challenge for compressed
hydrogen storage is that hydrogen’s
low-density results in the need for large containers—three
times the size used for methane and ten times the size
used for petrol
10
—which increases the material costs.
Liquefaction of hydrogen is another way to increase
density, but liquefaction also has higher energy costs—up
to 30% of the energy content of the fuel compared with
4%–7% for compressed hydrogen.
11
• Chemical storage in in the
form of compounds such as
liquified organic hydrogen carriers
(LOHCs) like methanol and
toluene, and hydrides such as
ammonia (NH
3
) are also gaining
prominence given the high energy cost of liquefaction
and material inefficiencies of compression. Each mode
of chemical storage, however, comes with its own uses
and hurdles, including energy conversion cost and chemical
characteristics that require careful handling etc.
12
• Natural underground storage
in salt caverns and salt domes
are large volume, low-cost, natural
storage options, but local availability
can be a challenge.
Hydrogen can be transported three main ways,
depending on the distance, volume, and state in
which transporting:
• Pipelines tend to be the cheapest
way to move hydrogen over longer
distances. Constructing pipelines
usually requires volume and demand
certainty to justify investment.
Additionally, existing natural gas
pipelines can be repurposed provided
they meet the technical criteria to reduce the risk of
embrittlement. Repurposing of existing pipelines also
enables blending of hydrogen within the existing natural
gas networks for end uses where blended hydrogen can
accelerate demand creation.
• Trucks are also used to transport
hydrogen in smaller volumes, both
in gaseous and liquid form, for local
distribution and longer journeys.
• Tanker ships are beginning to
be used for larger volume, longer
distance transport, mainly moving
liquid hydrogen (LH2), LHOCs, and
ammonia. Shipping of hydrogen is
currently expensive due to added
conversion costs (liquefaction or
chemical conversion) in addition
to the necessary structural design
to reduce risk of embrittlement. www.niti.gov.in | www.rmi.org /
20Harnessing Green Hydrogen
Challenges to a Hydrogen transition
In addition to the technical challenges discussed above,
the emergence of a hydrogen economy has been
challenging because of high costs, supply chain
complexity, policy, and regulations.
The cost of green hydrogen production is much higher
than what is produced from fossil fuels. Decreasing
renewables prices and economies of scale promise to
make green hydrogen economical going forward, but
much work remains.
Hydrogen can be produced by a variety of process and
has use in various sectors, making its sourcing and
supply chain complicated when compared to oil and gas.
Moreover, as discussed above, transporting and storing
hydrogen remain a big challenge and will require massive
investment in infrastructure upgrades.
Traditionally, hydrogen has seen minimal policy support
from governments across the globe so far. Policy push
has been towards other technology options and end
uses, even when hydrogen can make a much bigger
impact. Lastly, standards around hydrogen use either
don’t exist or haven’t been updated.
Emerging Importance of Hydrogen
Despite all the challenges discussed, hydrogen’s utility
for selected use cases is increasingly providing economic
value compared with alternatives. This is slowly shaping
a market for hydrogen.
Hydrogen can be consumed through either direct
combustion, electricity generation through fuel
cells, or industrial processes to be used as chemical
feedstock. Direct use includes industrial processes
in iron and steel plants and refineries; transportation
fuel for light duty vehicles, buses, trucks, trains, and
potentially shipping and aircrafts; and power sector
storage and grid balancing and for co-firing in thermal
power plants. Hydrogen is essential as a chemical
feedstock for the production of ammonia (used in
the fertilizer industry), methane, and methanol.
Exhibit 5Hydrogen End Use
Fuel
Feedstock
Transport
Power
MaritimeRoad Freight AviationTrains
Flexibility
Seasonal Storage
Peaking Plants
Power backup
Steel, Paper, Cement,
Aluminium, Food
Heat
ChemicalsProducts
Fertilizer, Plastics,
Fuel refining
Metallurgy, Steel
Food, Glass
Industry www.niti.gov.in | www.rmi.org /
21Harnessing Green Hydrogen
While the use cases for hydrogen are not a new revelation,
the emerging momentum is a recent phenomenon and
hinges on hydrogen’s role as an energy carrier crucial
for achieving deep decarbonization of hard-to-
abate sectors. Existing low-carbon technologies and
techniques such as solar, wind, Li-ion batteries, and
energy efficiency are contributing to the decarbonization
of various sectors such as power generation, buildings,
and light transportation.
However, carbon-free hydrogen will play a critical role in
decarbonizing certain end-use sectors such as iron ore
and steel, fertilizers, refining, methanol, and maritime
shipping, which emit major amounts of CO
2
. For other
high-emitting sectors, such as heavy-duty trucking and
aviation, hydrogen is among the main options being
explored with an outlook to be the preferred solution for
several applications.
Further, production of hydrogen through electrolysis
of water can support widespread renewable
electricity generation and can act as an energy storage
mechanism. Moreover, decreasing costs of renewables
will lead to a reduction in hydrogen production costs,
making hydrogen more competitive.
Lastly, hydrogen can help reduce the nation’s reliance
on oil imports and bolster a domestic job market.
Additionally, it provides the ability to participate in the
ensuing global energy transition and the economic
opportunity that transition presents.
A renewed momentum
With countries’ and companies’ growing net-zero
emission targets and hydrogen’s capability to
decarbonize the hard-to-abate sectors, hydrogen has
started witnessing new momentum among various
nations. At least 43 countries have now set up or are
setting up either strategies or roadmaps for a hydrogen
economy.
13
Most of the government related R&D funding
for hydrogen is concentrated in Europe, the United
States, Japan, and China.
14 www.niti.gov.in | www.rmi.org /
22Harnessing Green Hydrogen
Exhibit 6Mapping emerging hydrogen roadmaps and strategy documents of leading countries and regions
15,16
Current
Hydrogen
Demand
Policy Target
Demand
Demand FocusCapital
Allocated
(US$)
Focused
Hydrogen
Source IndustryTransport Others
Export/
Import
Focus
European Union
Germany
France
Netherlands
Hungary
Portugal
Spain
United Kingdom
Norway
Japan
South Korea
United States
Canada
Australia
Chile
China
Russia
1.65 MMTPA
0.9 MMTPA
1.5 MMTPA
160 ktpa
~150 ktpa
0.5 MMTPA
0.7 MMTPA
2 MMTPA
220 ktpa
10 MMTPA
3 MMTPA
650 ktpa
58.5 ktpa
22 MMTPA
2-3.5 MMTPA
6 GW capacity by 2024;
40 GW by 2030; 10 MMTPA
green H
2
by 2030
2.7-3.3 MMTPA by 2030
6.5 GW via electrolysis
by 2030
Not Available
36 ktpa (low carbon) +
138 ktpa (grey) by 2030
2-2.5 GW via electrolysis
by 2030
400 ktpa overall by 2030
4 GW via electrolysis by
2030
5 GW/a electrolysis
capacity by 2030
3 MMTPA by 2030 and
20 MMTPA by 2050
(5-30 by 2050)
3.9 MMTPA by 2030 and
27 MMTPA by 2050
20 MMTPA
5 GW/a (2025)
25 GW/a (2030)
35 MMTPA (by 2030);
160 MMTPA (by 2050)
7 MMTPA by 2035 and
33 MMTPA by 2050
(export only)
1. Chemical feedstock
2. Refining
1. Iron and Steel
2. Chemical feedstock
3. Refining
1. Iron and Steel
2. Chemical feedstock
3. Refining
4. Others
1. Iron and Steel
2. Chemical feedstock
3. Refining
4. Others
1. Chemical feedstock
2. Refining
1. Iron and Steel
2. Chemical feedstock
3. Refining
4. Others
1. Chemical feedstock
2. Refining
1. Chemical feedstock
2. Iron and Steel
1. Chemical feedstock
1. Refining
2. Others
1. Iron and Steel
2. Chemical feedstock
3. Refining
4. Others
1. Chemical feedstock
1. Chemical feedstock
2. Refining
1. Refining
609 billion
15-20 billion
> 7 billion
40-55
million/yr
450 million
No
dedicated
capital
No details
2 billion
23 million
935
million
/ y / yr
653
million
/ y / yr
> 15 billion
1.2 billion
278 million
(annual
support)/ yr
50 million
13 million
1.2 billion
Low Carbon -
Blue / Green
Carbon free -
Blue / Green
Low Carbon
- Blue
Blue / Green
Low Carbon -
Grey / Blue
Green
Green
Blue / Green
Clean
Blue
Grey / Blue /
Green
Low Carbon -
Blue / Green /
Others
Low Carbon
Intensity -
Grey / Blue
Clean - Blue /
Green
Green
Green (long-
term)
Low Carbon -
Blue / Nuclear
1. Medium and Heavy Duty
2. Buses
3. Rail
1. Medium and Heavy Duty
2. Buses
3. Rail
1. Medium and Heavy Duty
2. Buses
3. Rail
4. Aviation
1. Passenger Vehicle
2. Medium and Heavy Duty
3. Buses
4. Rail
1. Medium and Heavy Duty
2. Buses
1. Passenger Vehicle
2. Medium and Heavy Duty
3. Buses
1. Medium and Heavy Duty
2. Buses
3. Rail
4. Aviation
5. Shipping
1. Maritime
1. Passenger Vehicle
1. Passenger Vehicle
2. Medium and Heavy Duty
3. Buses
1. Passenger Vehicle
2. Medium and Heavy Duty
3. Buses
4. Aviation
1. Passenger Vehicle
2. Medium and Heavy Duty
3. Buses
4. Rail
1. Medium and Heavy Duty
2. Buses
1. Medium and Heavy Duty
2. Buses
1. Passenger Vehicle
2. Medium and Heavy Duty
3. Buses
1. Rail
Import
Export
EU Export/
Import
Hub
Export
Export
Export
Import
Import
Export
Export
Export
Export
1. Heating
1. Heating
1. Heating
1. Heating
2. Power
1. Heating
2. Power
1. Power
1. Heating
2. Power
3. Energy
storage
1. Heating
1. Heating
1. Heating
1. Power www.niti.gov.in | www.rmi.org /
23Harnessing Green Hydrogen
Over the past decade, financial support to hydrogen
by governments has increased. The amount of support
depends on countries’ advancement of their hydrogen
agenda. While early support had focused on R&D and
initial investments, much of the newer financial support
aims to close the gap on the operating cost differential
to existing technologies. Globally, governments are
moving towards supporting commercialisation and
demonstration of entire value chains, often through
public-private partnerships (See Appendix for details on
country strategy). Nations are increasingly using regions,
cities, or industrial clusters as focal points of financing. In
addition to direct support and programs, public financial
institutions are being engaged to support the transition.
Currently, almost $11.4 billion per year of national
government subsidies have become available for
hydrogen projects directly or indirectly.
17
This signals a
growing intent to spur the hydrogen economy, akin to
the support the solar and wind industries received over
the previous decades.
Global Hydrogen Supply and Demand
– Where is hydrogen now and where
it is heading?
Given this growing support, global supply and demand
of hydrogen, particularly green hydrogen is expected
to witness tremendous growth. Sustaining this policy
momentum is the emerging economics of green
hydrogen production (see Box 1). Although 98% of
hydrogen is currently produced from fossil fuels
(Natural gas – 71%, Coal – 27%)
18
, in the last decade,
number of electrolyser projects have jumped from
40 to 100, amounting to an increase in their capacity
from 2 MW to over 200 MW in 2020.
19
Box 1What Drives the cost of Hydrogen production?
20
GREY HYDROGEN ECONOMICS
For traditional fossil fuel-based grey (or even brown) hydrogen, the fossil fuel price is the biggest determinant of hydrogen
cost. Other costs include for transportation and storage and any taxes or foreign exchange risk associated with fuel
imports. For blue hydrogen, the cost of carbon capture and storage (CCS) will need to be included. The difference with
green hydrogen is that, in the absence of fuel, the capital expenditure around electrolysers (and any other associated
infrastructure) and their utilization and power costs are what ultimately decides the production economics.
Central to global scale-up of green hydrogen, are the lowering of renewable costs and expected cost decline of electrolysers.
IRENA estimates an 80% drop in green hydrogen costs if the electrolyser capital cost falls by 80% and the electricity
costs drop below $20/MWh.
Additional factors like higher capacity factors of renewable energy generators, increased
electrolyser efficiency, and longer electrolyser lifetimes are important contributing factors that can enable the cost-
competitiveness of green hydrogen.
Hydrocarbon economics
(LNG / fossil fuel landed
cost + transportation)
Foreign exchange
(if fuel is imported)
Transportation, Storage
and Others
GREEN HYDROGEN ECONOMICS
Electricity Cost (Generation
cost + utilization factor +
T&D cost)
Electrolyser Cost
(Capex + efficiency
& degradation)
Transportation, Storage
and Others www.niti.gov.in | www.rmi.org /
24Harnessing Green Hydrogen
Renewables prices have witnessed incredible declines
over the past years and the economic inertia is expected
to drive further decrease. When coupled with the decline
in electrolyser costs, as technology matures and volume
production and deployment take place, there is an
emerging consensus that green hydrogen production
will become economical. RMI’s analysis of IEA’s outlook
shows that the green hydrogen market could be
US$120–US$175 billion annually by 2050 based on a
range of projected prices.
iii,21
Exhibit 7The driving forces of the emerging economics of green hydrogen
Source: IRENA, BNEF, IEA
Globally, demand for hydrogen has increased by 17%
between 2010 and 2018,
22
used mostly to produce
ammonia and in refineries. With the global decarbonization
push, current policy momentum, and improvement in
economics and durability of end-use technologies like
fuels cells, hydrogen could serve 7%–18% of global final
energy demand in 2050.
23
Significant upside exists if
net zero targets are pursued seriously. The IEA projects
potential hydrogen demand of 528 million tonnes under
their net zero scenario, up from 287 million tonnes
as per their sustainable development scenario.
iv
This
could result in the mitigation of 1.6-3.5 giga tonnes of
greenhouse gas emissions annually by 2050.
24
Industrial
decarbonization (both energy and feedstock) is driving
near-term hydrogen demand creation. But longer-term
opportunities fall in transport, power, and even for
decarbonization of the shipping and airline industry.
Electrolyser price ($/kW)0
50
100
150
250
200
300
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2019 2030 2040 2050
Million Tonnes
India has some of the lowest renewable
costs in the world
Green hydrogen could become the largest source of
Hydrogen in the long-term
Alkaline electrolyser price decline PEM electrolyser price decline
RANGE OF WIND LCOE
RANGE OF UTILITY SOLAR LCOE
INDIA (WIND)
INDIA (SOLAR)
BROWN AND GRAY
BLUE
GREEN
SHARE OF GREEN H2
0
20
40
60
80
100
120
140
160
180
200
2020 2030 2040 2050
2018 USD/MWH
Renewable costs are declining globally
Exponential cost decline expectation for electrolysers
Global Hydrogen Production Outlook
RANGE
AVERAGE
0
200
400
600
800
1000
1200
1400
1600
2020 2030 2040 2050
0
200
400
600
800
1200
1400
2000
2020 2030 2040 2050
1000
1600
1800 www.niti.gov.in | www.rmi.org /
25Harnessing Green Hydrogen
Given the projected growth in green hydrogen, there
is consequent expectation for an exponential growth
in electrolyser capacity. The electrolyser market is
expected to reach gigawatt-scale in 2022 spurred by
increasing installation in China.
25
Almost 40 GW of
electrolysers by 2030 are already proposed.
26
There
could be significant increase if an aggressive green
hydrogen price decline allows for the replacement of
blue hydrogen with green hydrogen.
What could hydrogen mean for India?
For India, this momentum currently surrounding the
hydrogen transition efforts needs to be situated within the
context of a low-carbon economy, energy security, and
the larger economic development ambition of the nation.
India’s thrust towards a low-carbon economy currently
hinges on an accelerated transition towards a higher
share of renewables in the electricity grid complemented
by electrification of end uses such as transportation.
But there is a tacit recognition that materials critical
to industrialisation and urbanization such as steel,
ammonia, cement, and plastic have no substitutes and
cannot be decarbonized with electricity alone.
27
Green
hydrogen is a necessary lever to achieve a truly low-
carbon economy.
For India, this transition can be synergistic with the
scale, ambition, and economic competitiveness of
its renewable industry. Unlike fossil fuels which have
resource and geography constraints, green hydrogen
can be produced anywhere there is ample renewable
potential. India is blessed in that aspect. This will enable
the emergence of an energy carrier that is domestically
produced, reducing the dependence on imports for key
energy commodities like natural gas and petroleum.
Exhibit 8Hydrogen demand is expected to grow substantially
Source: IEA, S&P, Ballard, US DoE, RMI Analysis
Green demand has potential to grow more than threefold by 2050
POWER
HEATING IN BUILDINGS
SYNFUEL PRODUCTION
TRANSPORT
AMMONIA PRODUCTION FOR SHIPPING
INDUSTRY (INCL. AMMONIA)
REFINING
Global Hydrogen Demand Outlook
0
50
100
150
250
200
300
2019 2030 2040 2050
Million Tonnes
0
20
40
60
80
100
No. of fuel cell systems produced
Fuel cost decline
Learning rate = 15%
110 100 1,000 10,000 100,000
Fuel cell indexed cost
As end-use technology such as fuel-cell scales, their costs will also experience a decline
Hydrogen is not new; it is already being used for industrial feedstock uses.
Even India already consumes a substantial amount of industrial hydrogen,
2020eIndia(2020e)
Global Demand for Pure Hydrogen
OTHER
AMMONIA
REFINING
0
10
20
30
50
40
60
70
80
19751980198519901995200020052010201520182019e
Million Tonnes
Around 8%
of global
demand www.niti.gov.in | www.rmi.org /
26Harnessing Green Hydrogen
Given that the cost of electrolysers must decline for
hydrogen to become cost-competitive, research and
development and scaled manufacturing of electrolysers
is becoming an area of global technology competition.
India will benefit greatly from enabling domestic
manufacturing of electrolysers (and relatedly fuel
cells). This will allow the country to achieve technical
capability, participate in an emerging global market
underpinning the clean energy transition, and capture
more of the economic gains of this transition.
A truly domestic energy carrier that is price competitive
globally can also mean a unique opportunity to
participate in an energy and commodities trade. Given
the expected growth in global demand and the disparity
between producing and consuming nations, the need for
a hydrogen trade is bound to emerge eventually.
If volume growth and price decline expectations can be
met, this hydrogen transition can enable industries to
shape up in India around exports of green hydrogen and
hydrogen-embedded low-carbon commodities like green
ammonia and green steel.
This report is an attempt to understand this emerging
opportunity in India better. The next three chapters
lay out the scale of the opportunity while highlighting
possible challenges. The report also touches on the role
of finance in enabling this transition. Lastly, the report
aims to provide useful insights and policy-relevant
recommendations that can accelerate the development
of a sustainable hydrogen economy in India. Future of Hydrogen
in India www.niti.gov.in | www.rmi.org /
28Harnessing Green Hydrogen
The Future of Hydrogen in India
The emerging opportunity for hydrogen in India rests in
the ability to produce price-competitive green hydrogen
and enabling market creation for that hydrogen. This
chapter will focus on the supply and demand dynamics
within India.
Green Hydrogen Production in India
How competitive can it be?
As stated earlier, green hydrogen prices are determined
largely by the cost of electrolysers and electricity.
Beyond that, there are the operating costs, transmission
and distribution (T&D) costs, and wheeling charges for
electricity as well as specific local duties and taxes like
the goods and services tax (GST) in India. The supply
chain model, distance to demand centre, system design,
and utilization factor are additional factors that strongly
influence the delivered cost of hydrogen.
The cost of hydrogen from electrolysis today is relatively
high, between around $7/kg and $4.10/kg depending on
various technology choices and the associated soft costs
(see Exhibit 9). This makes it hard to compete with the
existing cost of grey or brown hydrogen. But India has
some of the most competitive levelized cost of electricity
(LCOE) for solar and wind in the world while remaining
a net importer of natural gas. Given the promises of
electrolyser cost and LCOE decline, it is more beneficial
to expand green hydrogen production in India rather
than production of grey or blue hydrogen.
v
Exhibit 9Current cost economics of green hydrogen production in India
Green HydrogenNatural Gas Based HydrogenCoal Based Hydrogen
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7. 0
LCOH ($/kg)
ElectricityFuelCapexCapexOpexOpexOthersOthersGrey H2CCSBlue H2Green H2FuelCapexOpexOthersBrown H2CCSBlue H2
FUEL
CAPEX
OPEX
OTHERS
CCS
RANGE
Source: RMI Analysis for Green and Natural Gas Based Hydrogen; Coal Based Hydrogen analysis adapted from TERI and BNEF www.niti.gov.in | www.rmi.org /
29Harnessing Green Hydrogen
Soft-cost driven green hydrogen price
reduction pathway
While electrolyser and electricity costs will guide the
long-term price trajectory of green hydrogen, there
are soft cost elements that can help reduce green
hydrogen production costs today to help spur market
development. Specifically targeting duty waiver and
reduction of the GST and T&D charges, the levelized cost
of hydrogen (LCOH) can be reduced to around $3.2/kg in
the best case, making it closer to becoming competitive
with grey hydrogen (Exhibit 10).
Reduction of T&D charges is not a novel suggestion
and should be pursued. The Ministry of Power already
waives inter-state transmission system charges for
electricity generated from wind and solar. Most recently,
this waiver was extended to projects commissioned from
30 June 2025, including for pumped storage hydro and
battery energy storage systems.
28
Extending this waiver
to renewable-based hydrogen production can drastically
improve the near-term economics of green hydrogen.
Beyond these soft costs, India should strive to reduce
renewable power tariffs for hydrogen production. These
could include revenue recycling of any carbon tax or
coal cess, low-emissions PPAs, and avenues for firming
electricity supply including discounted grid electricity to
complement the VRE generation.
Exhibit 10Soft cost led price-reduction pathway for current (2020) round-the-clock (RTC) renewable-based
green hydrogen
Source: RMI Analysis
* Hydrogen price calculated for RTC renewable (@ ₹3.6/kWh) with average T&D charges
** The range is based on high and low end of electrolzyer capex price: $500 - 969/kW
0
1
2
3
4
5
7
6
Refrence Green Hydrogen Price*GST Waiver (18% to 5%) Aggressive Hydrogen Price
LCOH ($/kg)
Full T&D Waiver
1.5
5.3 - 5.9
0.59 - 0.65
3.2 - 3.7
STACK REPLACEMENT
OPEX
CAPEX
ELECTRICITYT&D CHARGES
GST
RANGE** www.niti.gov.in | www.rmi.org /
30Harnessing Green Hydrogen
Future Price Trajectory of Green Hydrogen
With an expected price decline for both electrolysers
and renewables, our analysis indicates that in the best-
case scenario, the cost of green hydrogen can fall to
approximately $1.60/kg by 2030 and $0.70/kg by 2050
(Exhibit 11). Regardless of the scenario, the conclusion is
clear. Green hydrogen can become competitive with grey
hydrogen by 2030, if not earlier. Additional factors such
as a potential carbon price on fossil fuels could also aid in
the cost-competitiveness of green hydrogen.
Exhibit 11Projected price trajectory of solar-green hydrogen production based on decline in electrolyser and
renewable costs
Source: IEA, BNEF, TERI, SECI, RMI Analysis
MOST COMPETITIVE BLUE H2
GREY H2 PRICE RANGE
GREEN H2 FROM ON SITE RENEWABLES
GREEN H2 FROM RTC RENEWABLES WITH T&D WAIVER
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
LCOH (US$/kg)
2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050
2030 prices:
Green H2: $1.7 - $2.4/kg
RTC Renewables: $2.1/kg
Grey H2: $1.8 - $2.7/kg
2050 prices:
Green H2: $0.6 - $1.2/kg
RTC Renewables: $0.9/kg
Grey H2: $1.9 - $2.9/kg
Given the low LCOE of renewables, green hydrogen from
standalone renewable systems or from RTC renewable
arrangements will be more cost-effective than grid-
connected electrolysis. Additionally, given that the grid
is only gradually decarbonizing, the CO
2
intensity of
hydrogen generated with grid electricity will also remain
net positive even in the most VRE-rich case. While RTC
renewables could be very cost-competitive today and in
the near-term, there is a longer term potential for green
hydrogen generation from standalone renewables,
provided LCOE decline expectations materialise. www.niti.gov.in | www.rmi.org /
31Harnessing Green Hydrogen
Exhibit 12Most optimistic green hydrogen price trajectory
STANDALONE SOLAR
RTC RENEWABLES
0.0
H2 Price (US$/kg)
20302020 2021 2022 2023 2024 2025 20262028 20292027
0.1
0.2
0.3
0.4
3.23
3.12
3.00
2.75
2.52
2.31
2.11
1.92
1.75
1.59
1.43
(Key assumptions behind this scenario: Electrolyzer Capex ($/kW): 500(2020) , 125 (2030); Full T&D waiver; GST waiver
18% to 5%); LCOE of solar (INR/kWh): 1.9 (2020), 1.5 (2030); LCOE of RTC renewables (INR/kWh): 3.6 (2020), 2.85 (2030))
Box 2Aspirational price targets can be conducive to green hydrogen market development
As mentioned earlier, electrolyser price and the pace of its decline will be the most crucial determinant of long-
term price trajectory of green hydrogen. An assessment of the most optimistic price decline scenario informed
by a very aggressive electrolyser price decline assumption yields a hydrogen price of $1.4 / kg by 2030. While
there is a degree of uncertainty to this outlook, it is fair to conclude that aggressive price decline targets
coupled with relevant supply and demand side policy support could be effective tools for developing a viable
and competitive green hydrogen market in the country. www.niti.gov.in | www.rmi.org /
32Harnessing Green Hydrogen
Hydrogen Storage and Transportation
Considerations
Storage will eventually become necessary given the
variability of renewable sources and the possibility of
large and consistent demand coming from industries.
Storage costs could also potentially alter the cost
economics of standalone renewables and RTC
renewables-based hydrogen production, which can
have higher capacity utilization. Availability of cheap
natural storage like salt and rock caverns in India needs
to be assessed further given the high cost of storage in
pressurized steel tanks and the energy costs associated
with chemical storage. Further consideration is around
siting. Natural storage options will have limited flexibility
while steel tanks could be sited close to consumption or
production much more readily.
Transportation cost is another factor that can impact
cost economics. Pipelines become cost-effective once
hydrogen demand exceeds tens of tonnes per day.
29
As such, near-term development for large-scale
industrial consumption could be located closer to
production to minimize transportation and storage
costs. Transportation through compressed hydrogen
trucks looks to be the mainstay during the early phase
of hydrogen development. Given that moving electrons
is always more cost-effective than moving molecules,
there will always be a case for siting production closer
to consumption where possible.
Given that the evolution of transport and storage costs
and deployment is a large unknown, government, in
partnership with the private sector and other countries,
must play a part in both infrastructure assessment
and cost-reduction pathways. In the near term, an
assessment is needed on the viability and upgradation
costs of existing natural gas pipelines for hydrogen
transportation, which could help minimize the transition
cost to hydrogen.
Demand Prospect for Hydrogen
in India
India currently consumes almost 6 million tonnes of
grey hydrogen largely concentrated in industrial uses
in refining and as feedstock to produce ammonia and
methanol. Current hydrogen consumption is almost
equally split between refining and ammonia production
with a small share of consumption in methanol
production. A small quantity of hydrogen, amounting
to 0.3 million tonnes, is already being consumed for
steel production. Beyond these sectors, our assessment
indicates emerging potential demand in heavy-duty,
long-haul freight transportation and to a limited extent
in the power sector. Our assessment excludes niche
applications such as in industrial forklifts and cell phone
towers and city gas distribution. It also excludes demand
potential from aviation, shipping, and potentially
cooking, which are currently more speculative and
technically in very early stages.
Hydrogen demand is assessed under a scenario
where the pace and technology adoption are high, and
policies are implemented to enable the green hydrogen
transition. Scenario assumptions include a high uptake
of green hydrogen in end-use sectors, increased
penetration of fuel cell trucks, a rapid decrease in
electrolyser and renewable costs, and options for
financing this transition. Green hydrogen demand
is estimated within the overall hydrogen demand by
assessing the cost parity of green hydrogen-based end-
use products against grey/brown hydrogen-based end-
use products. CO
2
emissions and energy import savings
are estimated and compared with a base case of grey
hydrogen consumption in ammonia, refinery, methanol,
and steel and oil consumption for heavy-duty trucking.
A favourable policies (FPS) scenario is developed
to assess the market potential through incentives,
waivers, and mandates. The FPS analysis is intended to
understand the market creation in the short term and
hence is limited until 2030 only.
What drives sectoral demand for
Hydrogen?
Demand drivers for hydrogen are highly sector
specific. They depend on whether hydrogen is used
as industrial feedstock with no other alternatives or
whether it requires adopting new technology and
displacing existing fuel or technology. Further, the pace
of energy transition, new technology adoption, and the
presence of requisite policy and financial support will
also determine the demand outlooks for hydrogen. This
section is a brief discussion of sector-specific demand
drivers for hydrogen.
Refining
Hydrogen is essential to the petroleum refining industry
and is primarily used for desulphurisation of products www.niti.gov.in | www.rmi.org /
33Harnessing Green Hydrogen
such as diesel and petrol. Hydrogen demand depends on
two factors: 1) demand of petroleum products, which is
bound to increase considerably if efficiency measures
and low/zero-carbon alternatives are not adopted and
2) stringent policy actions on limiting the sulphur
content from petroleum products—the more stringent
the standards, the higher the requirement of hydrogen
in desulphurisation.
Ammonia
Ammonia, a compound made of nitrogen and hydrogen,
is extensively used in the chemical sector. Currently,
the majority of the hydrogen feedstock for ammonia is
mainly natural gas-based which can be replaced by the
renewable-based electrolysis process to form green
ammonia. Ammonia’s applications can span across
the following:
• Ammonia-derived fertilisers: Ammonia is majorly
used in the manufacturing of nitrogen-based (urea)
and other complex fertilisers such as diammonium
phosphate (DAP). The demand for nitrogenous
fertilisers is expected rise at the rate of 3 percent
compound annual growth rate (CAGR) over the
next decade, owing to rising population and
increasing demand for food.
31
• Ammonia as fertiliser: Although ammonia is
majorly used as feedstock for other fertilisers, it can
also be directly applied to soil, either in anhydrous
form or as aqua-ammonia (ammonia dissolved in
water). Anhydrous ammonia is readily available and
can be easily applied to soil,
however it requires
careful consideration in terms of its transportation
and storage.
32
Aqua-ammonia, on the other hand,
is relatively safer than the anhydrous form and can
be applied easily since it is not injected as deeply
as the anhydrous form.
33
• There is also the potential for the use of ammonia
as a hydrogen carrier and fuel for shipping.The REFHYNE Project in Germany, funded
by the European Commission’s Fuel Cells and
Hydrogen Joint Undertaking and supported
by Shell and ITM Power, aims to fully integrate
green hydrogen into refinery processes at an
existing refinery site. Construction began on
a 10 MW electrolysis plant in 2019 at the Shell
Rheinland refinery and is expected to begin
producing hydrogen in 2021. This pathway,
while a substitution for existing work in
refineries today, also offers a pathway to green
non-combustible products and an avenue for
refineries to move away from oil derivative
feedstocks. This stream of engagement offers
potential for the valuation of emitted carbon
and accordingly can link this to commodity
markets. In the lxong run, this pathway leads
to a carbon-neutral non-combustible refined
products production stream.
Several developers around the world have
announced projects to produce green ammonia.
Norwegian agricultural company Yara has
plans to convert an existing ammonia facility
to use green hydrogen as a feedstock, with
20,000 tonnes of capacity converted by 2023
and expected completion by 2026. Siemens is
establishing a Green Ammonia Demonstrator
in the UK that aims to show a full carbon-free
ammonia lifecycle from production to use as
a fuel to produce electricity. The ammonia,
in this case, essentially serves as an energy
storage mechanism for excess renewable
electricity. Renewable energy is used to power
all the stages of ammonia synthesis, including
the electrolysers to produce hydrogen, the
air separation unit to produce nitrogen, and
the Haber-Bosch process used to synthesize
ammonia. Other industrial ammonia producers,
including CF Industries in the United States and
Iberdrola/Fertiberia in Spain, have announced
plans to build electrolysers to synthesize
green hydrogen as a feedstock for ammonia
production. CF Industries, which has a target to
reach net-zero carbon emissions by 2050, will
build a 20,000 tonnes per year green ammonia
plant in Louisiana. The Iberdrola/Fertiberia
project will expand a 20 MW pilot plant to 800
MW of hydrogen production by 2027 with a
$2.1 billion investment.
Box 3
Box 4
Case Study: Refining
30
Case Study: Green Ammonia
34 www.niti.gov.in | www.rmi.org /
34Harnessing Green Hydrogen
Methanol
Methanol is primarily used to produce various chemicals
and solvents, and its use can be expanded as fuel for
transport in the form of various blends, marine fuel, and
cooking. Hydrogen is a main feedstock in the production
of methanol and, in India, is currently produced primarily
from natural gas. India currently produces only 13% of
its methanol consumption with a policy goal to increase
production through the Indian Methanol Economy
program. Future demand will rest on emerging demand
for speciality chemicals and solvents and the success of
the Indian Methanol Economy program.
Steel
Hydrogen demand for the steel industry is a matter of
technology competitiveness and fuel availability. Steel is
mainly produced from three main processes:
• blast furnace – basic oxygen furnace (BF – BOF),
which uses coking coal for reduction of iron ore;
• direct reduced iron – electric arc furnace/induction
furnace (DRI – EAF/IF), which can achieve the
reduction through use of either natural gas or coal
on pelletized iron-ore; and
• EAF/IF with scrap steel, where scrap or recycled
steel is directly heated via electricity to form steel.
The DRI process is where there is a potential role for
hydrogen to replace fossil fuels, mainly natural gas.
Most of the green methanol projects under
development are led by Carbon Recycling
International (CRI), which has projects under
various stages of development in Europe and
China. Its Emissions-to-Liquids (ETL) technology
utilizes CO
2
captured from industrial or other
sources and green hydrogen to produce low-
emissions methanol, which can be used as a
fuel or feedstock for other chemical products.
The North-C-Methanol project, a collaboration
between Proman, ENGIE, ArcelorMittal, and
others, is a large-scale demonstration project
located in Belgium and part of the North-CCU-
Hub Roadmap.
Methanol-to-olefin plants are emerging,
particularly in the APAC region, as effective
pathways for the production of common use
olefins found in plastics in particular. The
utilization of captured carbon and green
hydrogen to produce methanol creates a
pathway to plastics production that could
further reduce future need for fossil fuel
extraction, while developing a more complete
circular production pathway and creating a
recognizable value market for carbon.
Arising out of Sweden’s 2045 net-zero target,
the HYBRIT project in Sweden, a collaboration
between SSAB, LKAB, and Vattenfall, will
replace coking coal with green hydrogen in
the reduction process. Construction on the
pilot plant (costing ~$150 million) began in
2018 and operations started in August 2020,
with a goal to have demonstration completed
by 2035. Arising out of this effort, LKAB has
committed $47 billion to convert its operations.
Multiple pilot plants to demonstrate other
technologies are being built. ArcelorMittal
has several projects underway across Europe
that utilize green hydrogen in various ways in
primary steelmaking to reduce emissions. In
Bremen, Germany, a plant is planned that would
inject green hydrogen into the blast furnace.
The ArcelorMittal IGAR project in France is
developing a hybrid blast furnace process using
DRI gas injection and a plasma torch.
Box 5
Box 6
Case Study: Green Methanol
35
Case Study: Green Steel
36 www.niti.gov.in | www.rmi.org /
35Harnessing Green Hydrogen
Hydrogen’s role as a fuel for the transport sector
can extend beyond road transport to shipping and
aviation. Shipping and aviation sectors use heavy
fuel oil and jet fuel respectively. Moreover, there
are very few alternatives to decarbonize these
sectors, and they are less readily available and more
expensive than conventional fuels. Hence, hydrogen
or hydrogen-based compounds such as ammonia
or methanol can play a big role in decarbonizing
shipping and aviation.
On the shipping side, various efforts are underway
to decarbonize international maritime shipping led
by the International Maritime Organization (IMO).
IMO has set a goal of reducing international shipping
emissions to 50% of 2008 levels by 2050. A major
chunk of these emissions reductions can come from
ammonia as a shipping fuel. By 2050, 25% of the
fuel demand in this sector can be met via ammonia.
Ammonia has a competitive advantage when
compared with hydrogen—its higher energy density
makes it easier to store.
Another option is to power ships with fuel cells
powered by hydrogen, but that route is more geared
towards commuter ferries or short-
distance transport and competes directly with
battery-powered ships. In India, domestic coastal
and inland waterway shipping contribute to just 6%
of the total freight moved and is the least carbon-
intensive mode in terms of CO
2
emitted per tonne-
km of freight moved, even when powered with fossil
fuels. However, with the Indian government’s focus
on promoting multi-modal and inter-modal transport,
demand for shipping could rise in the future, meaning
increased emissions from burning fuel oil. Hydrogen
and ammonia can play a role, but there are still
significant challenges to their uptake including
high cost compared with conventional alternatives,
storage infrastructure requirements at ports, and the
need to change vehicle designs.
The aviation sector has the highest carbon emissions
intensity of any other mode of transport. With rising
income levels, the increase in tourism, and increasing
demand for faster deliveries by consumers, emissions
from the aviation sector will grow exponentially. By
2050, aviation will be the second-biggest emitter
of freight transport-related CO
2
emissions in India,
registering a 100-fold growth. Similar growth is
projected for passenger aviation as well.
The technology options to decarbonize the aviation
sector include 1) battery electric, 2) hydrogen-
powered fuel cell, 3) hydrogen-powered turbine,
4) sustainable aviation fuels made from waste and
agriculture residues, and 5) electrolytic hydrogen-
based synthetic fuels. No one technology stands
out as a single solution for decarbonizing the
aviation sector; each technology has its own merits
and challenges. For example, battery electric
and hydrogen fuel cells can deliver the maximum
decarbonization benefit per passenger-km or freight
tonne-km, however their use will be restricted to
short distance, smaller flights. The other three
technologies can be deployed for long distance-larger
aircrafts, however significant challenges exist due to
lack of storage infrastructure. High costs also remain
a barrier for all technologies.
Decreasing costs due to improved technologies and
economies of scale, policy push introducing demand
incentives, supply mandates and a carbon tax, and
innovative financing and business models can enable
decarbonization of aviation.
Box 7Beyond Freight—The Potential Role for Hydrogen in Aviation and Shipping
37
Long-Haul Freight and Heavy-Duty Vehicles (HDVs)
Like steel, hydrogen demand for long-haul freight
will depend on movement towards low-carbon
transportation and the competitiveness of technology
options with respect to diesel and against each other.
Two technology options exist to electrify HDVs: battery-
electric vehicles (BEVs) and fuel cell electric vehicles
(FCEVs). Both these technologies are complementary,
and their uptake will depend on technology merits,
refuelling time constraints, efficiency considerations,
costs, and duty cycles. www.niti.gov.in | www.rmi.org /
36Harnessing Green Hydrogen
Power Sector
High demand growth and renewable penetration
introduces the challenges and prospect of flexibility
and VRE integration. Hydrogen proponents have
also proposed the concept of power-H2-power as
another form to provide storage and flexibility. But
actual demand for hydrogen will be limited by its
competitiveness against other technologies such as
battery storage and demand response, in addition to
the unique nature of the country’s grid and emerging
supply and demand structure.
Potential future application – Electrofuels for
ground transportation
Electrofuels (e-fuels) are primarily hydrogen-based
fuels that are produced via hydrogen derived from the
water electrolysis process. The primary examples are
methanol and ethanol which can be blended with or
completely replace existing fossil fuels (with required
design changes) for powering vehicles. E-fuels can act
as a complementary technology to biofuels due to their
existing limitations around feedstock and applicability
in certain end use cases. In the near term, e-fuels can
be utilised as blended fuels with either petrol or diesel,
and there is a long-term potential of using them in
M100/E100 engines (100 percent methanol or ethanol
content). E-fuels have the following advantages:
• E-fuels can be produced at a lower cost in the near
future due to lower prices of renewable electricity
and declining electrolyser costs, hence outcompeting
other production processes.
• Reduction in well-to-wheel emissions — emissions
are reduced at the point of generation of the
fuel, owing to the use of green hydrogen. Even
tailpipe emissions are reduced on account of
reduced consumption of petrol or diesel.
Hydrogen’s potential as fuel for clean cooking
has been discussed and experimented with. But
given the distributed nature of cooking demand,
electrification is a better pathway for bettering
access to decarbonized cooking. Hydrogen could
Box 8Does hydrogen make sense as cooking fuel?
play a role through blending into existing city
gas distribution (CGD) network in urban areas.
But even there given hydrogen’s characteristics,
there is also a limit to blending in existing pipeline
infrastructure. Due to the low density and higher
diffusivity of hydrogen, existing gas pipelines
should be coated / made of different material to
withstand higher compression ratios. Furthermore,
rigorous testing is required to understand the
long-term impact of hydrogen, on materials and
equipment with leakage, flame stability, back firing,
ignition and must be investigated to ensure system
safety, efficiency and environmental performance.
Additionally, hydrogen specific furnaces and stoves
do not exist outside of prototypes. www.niti.gov.in | www.rmi.org /
37Harnessing Green Hydrogen
Exhibit 13Hydrogen demand outlook and potential green hydrogen share at cost parity (without policy intervention)
Source: MoS, MoC&F, MoPNG, IEA, TERI, BCG, World Bank, RMI Analysis
0.0
5.0
10.0
15.0
20.0
25.0
30.0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total Hydrogen Demand (Million Tonnes)
Green Hydrogen Share
2020204020502030
POWER
HDV
STEEL
METHANOL
AMMONIA
REFINERY
SHARE OF GREEN H2
Hydrogen Demand Outlook
As per our assessment, hydrogen demand can potentially grow more than fourfold between 2020 and 2050, amounting
to around 29 million tonnes by 2050 (Exhibit 13).
While steel and heavy-duty trucking will be the long-term driver for demand, in the near term, demand will likely be
driven by the more mature markets in industrial feedstock—ammonia and refining. Increasing consumption from these
two sectors can result in a demand of almost 11 million tonnes per year by 2030 from the current demand of around
6 million tonnes. Details of sectoral analysis are presented in Appendix B. www.niti.gov.in | www.rmi.org /
38Harnessing Green Hydrogen
The Potential for Green Hydrogen
Cost-competitive green hydrogen opens the possibility
for market development, especially in industries that
are already consumers of grey hydrogen. The share of
green hydrogen will depend on the cost of production
compared with alternative hydrogen sources, the share
of hydrogen cost in the end cost of the product, as
well any exogenous demand creation efforts that
may be imposed in the near term. Purely based on
cost-competitiveness, green hydrogen is expected
to dominate the hydrogen market in the long run.
Even in the 2030 timeframe, green hydrogen can
play a significant role for both existing brownfield
consumption and new greenfield investments. Almost
94% of hydrogen demand in 2050 can be met by green
hydrogen, up from 16% in 2030. The cumulative value of
the green hydrogen market in India could be $8 billion
by 2030 and $340 billion by 2050.
Refining and ammonia are the two sectors ripe for
near-term utilization of green hydrogen given the
already large share of hydrogen they are consuming
and are expected to consume in the near term. But new
hydrogen application areas like steel and heavy-duty
vehicles become much more prominent drivers for the
green hydrogen market in the long run, making them
ideal for small- and large-scale pilot development.
CO
2
and Energy Import Savings
This transition has significant impact on the
greenhouse gas emissions of the hard-to-abate sectors.
Cumulatively, between 2020 and 2050, India can
abate 3.6 giga tonnes of CO
2
emissions compared with
a limited hydrogen adoption case. While industrial
feedstock is an easier market, the majority of long-term
decarbonization potential lies in steel followed by heavy-
duty trucking, since their scale of demand is much higher.
When looked at from an energy security perspective,
domestically produced green hydrogen can translate
to a net energy import savings of $246–$358 billion
cumulatively between 2020 and 2050 ($3–$5 billion
between 2020 and 2030 alone). This is on account of a
reduction in both natural gas imports as grey hydrogen
is replaced with green hydrogen and oil imports as long-
haul freight transitions to hydrogen fuel cells trucks.
Exhibit 14CO
2
emissions reductions in 2050 due to green hydrogen uptake
Source: RMI Analysis
0
200
400
600
800
1000
1200
1400
1600
1800
2020 EmissionsRefinery Ammonia Methanol Steel HDVs 2050
Efficient
Emissions
2050
Business-as-usual
Emissions
CO
2
emissions (Million Tonnes)
HDV
STEEL
METHANOL
AMMONIA
REFINERY
CO
2
emissions reductions due to green hydrogen uptake in end use sectors www.niti.gov.in | www.rmi.org /
39Harnessing Green Hydrogen
Near-Term Market Development
Encouraging market development for green hydrogen will require further analyses than can inform decision-making.
Exhibit 15 lays out the relationship between the impact of hydrogen on the price of the final products of the end-use
sectors and their green hydrogen market potential by 2030 and 2040. End-use sectors should be assessed to identify
those ready for scaled consumption and those ripe for small- and large-scale pilot development.
Targeted Viability Gap Funding (VGF)
A targeted viability gap funding (VGF) mechanism that
can help address industry-specific cost differentials/
green premiums for some of the possible early markets
should be considered. As Exhibit 15 shows, refining
and ammonia could be ideal sectors for a targeted
VGF approach in the initial phase of green hydrogen
development. This is due to the current size of hydrogen
consumption and the potential to replace grey with
green hydrogen.
The impact of hydrogen on the price of refinery
products is much less than that of ammonia where
hydrogen as a feedstock constitutes almost 80%–90%
of the cost of end products like urea. From a government
expenditure perspective, the refinery sector is relatively
more ideal for VGF given that hydrogen contribution to
end product cost is only around 2%–4%.
But ammonia provides credible opportunity as well
given the large share of subsidy the government already
provides for urea imports. India currently imports
Exhibit 15Assessing opportunity for green hydrogen market creation by 2030
Source: RMI Analysis
Hydrogen share of product cost
Sector share of total green hydrogen demand
0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
5% 10% 15% 20% 25%30% 35% 40% 45% 50%
High cost, low impactHigh cost, high impact
Low cost, high impactLow cost, low impact
Bubble size indicated green hydrogen demand in million tonnes
*impact refers to impact of government support on demand creation
Methanol (for chemicals)
HDV
Steel
Ammonia
Refinery
2030
2040
0.5
1.5
3
5 www.niti.gov.in | www.rmi.org /
40Harnessing Green Hydrogen
almost 25%–30% of its annual urea consumption.
38
Directing part of the existing subsidy outlay towards
VGF for green ammonia production could also make
sense from an import substitution and supply security
perspective while making the VGF expenditure for
ammonia closer to being revenue neutral.
VGF can be directed through multiple economic
instruments such as depreciation benefits, tax benefits,
production-based incentives, and capital subsidies, as
Germany is currently promoting for electrolytic hydrogen
production. Another measure to incentivize industry is
carbon contracts for difference mechanisms or green
subsidies that cover the differential costs between
conventional and green hydrogen-based technologies,
improving the affordability of asset conversion. Lastly, a
production-linked incentive for end products like green
steel and green ammonia could be instituted.
The level of VGF should also be differentiated based on
whether these are targeted towards existing brownfield
assets or newer greenfield assets. Replacing grey
hydrogen in older plants is bound to demand higher
VGF due to depreciated assets, while newer plants will
demand lower VGF. For newer applications such as steel,
long-haul freight, and a city gas network, assessment
must be conducted to inform VGF potential in the medium
term against existing fuels that green hydrogen will
be replacing.
Hydrogen Mandates
A mandate-driven approach can also aid in market
creation. One way is to blend hydrogen with natural
gas by injecting it into existing natural gas pipeline
networks. This mode of blended hydrogen has recently
been featured in the national hydrogen strategies of
the Netherlands and Australia, in addition to a host
of small-scale pilot projects.
39
Blending can ensure
demand certainty for early investors in green hydrogen
production and could be crucial for early learnings and
scaling efforts. Also, at low blend volume, this strategy
could be very cost-effective for market creation.
Blending mandates can be put into effect for two major
sectors — industries that currently use hydrogen as a
feedstock and city gas distribution (CGD). Hydrogen
can be blended with natural gas for industries such
as ammonia, refining and methanol, as many of
these industries tend to along natural gas pipelines.
Additionally, hydrogen can also be blended with existing
city gas network of piped natural gas and compressed
natural gas.
Well designed blending mandates can complement
sector-specific VGF to create a high degree of demand
certainty for scaled deployment of green hydrogen.
Mandates can be driven by requiring all new greenfield
investment to use green hydrogen or by increasing the
blending of green hydrogen in existing brownfield units.
Exhibit 16 proposes such a potential mandate.
Exhibit 16Potential mandates for existing applications
Source: NITI Aayog
For new applications, an aspirational target-based approach that can inform future mandates should be applied.
Appropriate mandates could be designed in time to build markets in those application areas.
SectorTarget TypeMandateCut-off Date for the sector to go 100% Green
RefineryCorporate level targets 50% by 2030 2035
FertilizersImport substitutions 100% by 2030 2040 www.niti.gov.in | www.rmi.org /
41Harnessing Green Hydrogen
Industrial Cluster Identification and Development
VGF and mandates should also be suppplemented with geographical assessments to identify potential clusters around
existing factories, transmission infrastructure, and renewable hubs. Industrial clusters have been a common strategy
across many of the hydrogen roadmaps being developed, for example in the European Union (see Box 9).
Industrial clusters can help coordinate and concentrate
support to advance green hydrogen adoption. Providing
incentives and support to priority regions while creating
green hydrogen procurement quotas for industries
located in these clusters can solve demand and supply,
as well as alleviate finance constraints to accelerate
deployment. Several strategies (in Korea, Denmark,
EU, France, among others) have similarly focused on
supporting full value chains in high-potential regions.
Clusters will be essential in the near-term to guarantee
offtake certainty for early green hydrogen pilot
projects while reducing infrastructure costs. But in the
future, scaled industrial clusters could also become a
vector for demand aggregation, diversification of the
local industrial base using hydrogen, and lowering of
production costs due to emerging economies of scale.
As a new pipeline network emerges, or existing gas
pipelines become retrofitted and ready for hydrogen
transportation, these early clusters can also emerge as
green hydrogen industrial networks.
Cluster identification should be guided by concentration
of existing and expected end-use facilities and cost
of hydrogen production given local dynamics around
land and other resources. CEEW’s analysis presents
a possible early industry cluster in India focusing on
fertilizer and petrochemical in the western coasts and
iron and steel in the eastern belt.
41
A key conclusion
is that several of the most economically significant
clusters, from the perspective of hydrogen deployment,
are located close to some of India’s best renewable
resources (see Exhibit 17).
The European Union has historically focused on
the establishment of clusters as focal points for
industrial policy. Since 2008, the European Cluster
Observatory has mapped around 3,000 industrial
clusters—regional concentrations of specialised
companies and institutions that cooperate closely.
The EU sees clusters as playing a crucial role in
building collaboration, supporting innovation, setting
up transnational partnerships, and advancing the
carbon-neutrality agenda. The European Cluster
Collaboration Platform is an online hub for clusters
to develop partnerships, share knowledge with each
other, and participate in funding calls.
Europe's largest hydrogen cluster currently is the
NortH2 cluster in northern Netherlands. It was
launched by a consortium comprised of Groningen
Seaports, Shell Nederland, Gasunie, Equinor, and
RWE. It aims to produce hydrogen in Eemshaven,
Netherlands, using electricity generated by a mega-
scale offshore wind farm. The plan provides for a
large electrolyser and a smart transport network
using Gasunie's existing natural gas infrastructure.
It is expected to transport 1 million metric tonnes
of green hydrogen to industries in northern
Netherlands and north-west Europe annually by
2040.
Box 9Hydrogen Cluster Development in Europe
40 www.niti.gov.in | www.rmi.org /
42Harnessing Green Hydrogen
Exhibit 17Location of key industrial facilities
However, even clusters located away from India’s renewable-rich regions, for example, iron and steel clusters in Odisha,
still have access to large amounts of a high-quality solar resource.
42
Given that shipping electrons is always easier than
shipping molecules, emerging RTC renewables should also be looked at for hydrogen production even where renewable
resources may not be locally available.
Source: PPAC, NITI Aayog, CEEW www.niti.gov.in | www.rmi.org /
43Harnessing Green Hydrogen
Pilot and start-up scaling efforts through dedicated
hydrogen corridors
Given the nascency of the sector, pilots will be critical.
India can support prototype-stage projects to create
domestic supply chains and bring a local context into
innovation:
• In the short-term, demonstration projects can be
set-up either by government public sector undertakings
or by private entities with government encouragement.
The aim should be to address how to produce and
scale green hydrogen (see Box 10 for ongoing pilots
projects in India).
• Early pilots could be concentrated around existing
clusters of feedstock and petrochemical industries
highlighted above, followed by the steel sector. A
similar approach could be applied to transportation
by identifying and targeting major freight corridors
in the country in the medium to long term. Technology
demonstration pilots for FCEVs could also be conducted
on government offices or university campuses.
• Government could enable upscaling of lessons from
the pilots and demonstration projects by having a
centralized platform for collating and disseminating
results, as well as for hosting industry discussions
and dialogues.
Other Demand Creation Efforts
As sector use of green hydrogen matures from pilots,
the government should identify policy instruments to
encourage demand aggregation, including assessment
of any public procurement pathways. This can be crucial
in enabling scaled deployment. Further, introducing
voluntary purchase mechanisms and green certifications
for products such as green steel, green ammonia, and
green methanol can raise awareness among the end
consumers and enable a consumer-driven market pull
for green hydrogen in the long run.
Upside to Green Hydrogen Demand
All these market creation instruments along with favourable
policies around near-term cost reduction can result in a
substantial increase in green hydrogen demand by 2030.
The government is already taking steps to introduce
green hydrogen-based pilots in the country. The
government-led public sector undertaking (PSU),
Indian Oil, is at the forefront of the green hydrogen
revolution. It is planning to setup India’s first green
hydrogen unit for the Mathura refinery, which will
be used to process crude oil. Moreover, it plans
to utilize low-cost wind power from Rajasthan
(wheeling it to Mathura in Uttar Pradesh) to power
this green hydrogen plant. The organization has
also been conducting a pilot using hythane (H-CNG),
a blend of compressed natural gas (CNG) and
hydrogen. The pilot involved retrofitting 50 CNG
buses to test the feasibility of the H-CNG-powered
vehicles and their impact on emissions and fuel
economy. Another government-run PSU, NTPC,
has recently set up a tender to establish a first-of-
its-kind hydrogen refuelling station to be powered
entirely by renewables in Leh through a stand-alone
1.25 MW solar system.
Box 10Ongoing Demonstration Pilots in India
43
www.niti.gov.in | www.rmi.org /
44Harnessing Green Hydrogen
Under the FPS scenario, green hydrogen demand can be expected to almost double to 3.7 million tonnes from 1.7 million
tonnes in refence scenario (Exhibit 18). This additional demand will be critical in enabling the green hydrogen economy
to mature in the long term creating opportunities for both energy transition as well as industrial growth.
Exhibit 18The potential increase of the green hydrogen market under the FPS scenario in 2030
Source: NITI Aayog, RMI Analysis
Million Tonnes
Demand at cost parityPotential DemandUpside from incentives and mandates
RefineryAmmonia
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
HDV
STEEL
METHANOL
AMMONIA
REFINERY Manufacturing
Opportunities www.niti.gov.in | www.rmi.org /
46Harnessing Green Hydrogen
Manufacturing Opportunities
Beyond supply and demand, India’s robust economy and manufacturing and industrialization ambitions present other
opportunities to partake in the emerging global hydrogen economy. A robust market for green hydrogen translates to
a growing demand for production and consumption technologies such as electrolysers and fuel cells and an opportunity
for scaled manufacturing.
India’s Electrolyser Demand
In our reference case, India’s own internal market for electrolysers could be around $31 billion by 2050 representing
a demand of 226 GW (Exhibit 19). By 2030, India can expect a demand of 20 GW.
Exhibit 19Potential electrolyser market in India
There is significant near-term increase in the FPS scenario and demand of up to 44 GW can be expected by 2030
(Exhibit 20), provided VGFs, mandates, pilots, and cost reduction incentives can accelerate market development.
Early government efforts can help domestic manufacturers capture a significant share of the pie while potentially
emerging as a global manufacturer.
Source: RMI Analysis
0
50
100
150
200
250
Size (GWe)
Value (Billion US$)
204020502030
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
20
112
226 www.niti.gov.in | www.rmi.org /
47Harnessing Green Hydrogen
Technology Review and Implications
for India
The market for electrolysers is dominated by alkaline
and polymer electrolyte membrane (PEM) technologies
with advanced electrolyser technologies like solid oxide
and anion exchange membrane nearing commercial
deployment as well.
The fundamental components of the electrolyser consist
of the stack and a large array of balance of plant (BoP)
components. The actual splitting of water into hydrogen
and oxygen occurs at the stack level and is supported by
the various systems that fall collectively under the BoP.
Fundamental differences between PEM and alkaline
electrolysers are at the stack level (Box 11).
BoP components are common across both types of
electrolysers.
Exhibit 20The potential increase in the electrolyser market under the FPS scenario for 2030
Source: NITI Aayog, RMI analysis
The structure for both PEM and Alkaline
electrolysers is similar but there are a few
differences.
A PEM electrolyser relies on reversing the fuel
cell process and requires no electrolytes.
Box 11The Difference between PEM and Alkaline
Electrolysers
An alkaline electrolyser, on the other hand, is a
much more mature technology (it has been in
commercial application since the 1950s) but
requires an electrolyte liquid.
PEM stack components rely on rare earth metals.
The cathode and anode layers of a PEM stack
are created by depositing metals like iridium or
platinum on either side of the membrane. These
are the scarcest and most emissions-intensive
metals available. The bipolar plates of the PEM
stack are built using gold- or platinum-coated
titanium while the PTL can be built with titanium
or carbon cloth. Alkaline electrolysers rely mostly
on nickel whose supply is more diversified than
rare earth metals.
Compared with alkaline electrolysis, PEM
electrolysis has the advantage of quickly reacting
to the fluctuations typical of renewable power
generation. But PEM electrolysers tend to be
costlier. As electrolyser deployment moves towards
the gigawatt-scale market, the lower cost of
alkaline electrolysers is advantageous when it
comes to scale deployment.
RefineryAmmonia
Demand at cost parityPotential DemandUpside from incentives and mandates
0
10
20
40
30
50
GW
HDV
STEEL
METHANOL
AMMONIA
REFINERY www.niti.gov.in | www.rmi.org /
48Harnessing Green Hydrogen
Although the stack contributes close to 50% of the
total cost of both PEM and alkaline electrolysers, the
balance of plant (BOP) remains the predominant cost
contributor for both electrolysers (Exhibit 21). The
stack, power supply, and water circulation system
make up more than 80% of the cost. Power supply
alone accounts for 20%–30% of the total system
cost of electrolysers today. If seawater is utilized to
produce green hydrogen, the cost of desalination further
increases the water purification costs. This subsystem is
the second-largest cost component within the balance
of plant.
When it comes to the stack, the cost differs based on the
technology. The material intensity of PEM, especially
with its heavy reliance on rare-earth metals and precious
metals like gold and platinum, means that material costs
constitute a much larger share than manufacturing and
assembly costs. The easy availability of nickel coupled
with a simpler design makes alkaline electrolysers
50%–60% cheaper than PEM electrolysers. Hence
the stack cost of the alkaline electrolyte is not dominated
by the material costs but the manufacturing costs
amounting to 40% to the total stack cost.
The Domestic Manufacturing Opportunity
in India
Stack Manufacturing
When it comes to stack manufacturing, India’s initial
positioning is limited by import dependence for metals
like platinum, iridium, and even nickel. Even for new
technologies like solid oxide electrolysers, critical
materials are in short supply globally and almost 95%
comes exclusively from China. This import dependency
reduces near-term competitiveness, challenging private
sector interest in developing stack manufacturing
capabilities within the country.
Exhibit 21Cost breakdown of electrolyser (Adapted from IRENA
44
)
POROUS TRANSPARENT LAYER (PTL)
SMALL PARTS (SEALING, FRAMES)
STACK ASSEMBLY AND END PLATES
CATALYST COATED MEMBRANE
STRUCTURED LAYERS
BIPOLAR PLATES (BPs)
DIAPHRAGM / ELECRTRODE PACKAGE
PEMBalance of Plant
Cost of Electrolyser
Stack
components
45%
Balance
of Plant
55%
Alkaline
Power Supply
50%
53%
17%
3%24%3%
10% 8%
7%
Hydrogen
Processing
20%
Cooling 8%
57%
14%4%
Deionized
Water
Circulation
22% www.niti.gov.in | www.rmi.org /
49Harnessing Green Hydrogen
Additionally, there is the question of skilled labour for
stack manufacturing. While it warrants further research,
early conversations with electrolyser manufacturers
indicate that skilled labour may not be a problem, and
the country’s scientific and engineering professionals
are able to meet foreseeable demand.
45
Regardless,
further assessment is required on whether the current
level of technical education and research is providing an
adequate labour force as well as institutional knowledge
for the country to partake in the hydrogen economy in
general and electrolysers in particular.
But in the longer term, the country can still leverage
its expected growth in domestic green hydrogen
demand to encourage private sector interest. To begin
manufacturing electrolysers in-country, the government
could develop the following strategies:
• Identify and invest in research, development, and
commercialisation of low-cost electrolyser technologies
that require minimum rare earth metals.
• Secure a robust supply chain of metals and mineral
and identify electrolyser recycling strategies. These
strategies could be developed in parallel with the
domestic advanced chemical battery ecosystem,
which may need similar materials.
• Spur local demand for green hydrogen through
mandates and incentives. This will help create
demand certainty for manufacturers to build up
stack manufacturing capabilities.
Balance of Plant
Given that power supply, water circulation, and hydrogen
processing units account for 50% of the electrolyser
costs and with potential for further cost reduction,
India still can grow its position in the global electrolyser
market by emulating the progress it is making in the
electronics space. India’s electronics manufacturing has
grown from $29 billion to $70 billion in a span of five
years (2014–2019). This has resulted in India’s electronics
exports growing 39% year-on-year to $8.8 billion in 2019
coupled with a 5% contraction in electronics import.
46
This growth has been spurred by multiple Government
schemes that incentivized local manufacturing of
electronics including the Phased Manufacturing
Program, the Modified Special Incentive Package
Scheme, electronics manufacturing clusters, and the
National Policy on Electronics 2019. Those schemes,
along with the recently announced Production Linked
Incentive scheme for solar PV, automobiles, and batteries
are potential models that can encourage electrolyser
manufacturing in the near term.
47
While the country can leverage its experience in power
electronics manufacturing, efforts are required to
identify and establish standardized BoP components
for the global electrolyser market. This calls for room
for collaboration with global manufacturers to establish
standards for BoP components. Further, the supply
ecosystem in the country must be improved to increase
overall domestic value capture. www.niti.gov.in | www.rmi.org /
50Harnessing Green Hydrogen
Encouraging Electrolyser
Manufacturing
India’s electrolyser manufacturing ecosystem is at
a nascent stage today (see Box 12). Much is left to
be seen in how the government further encourages
both research and development efforts to indigenize
technologies, while encouraging development of start-
ups and OEMs engaged in electrolyser manufacturing.
Building the electrolyser ecosystem requires the
government to introduce direct and indirect incentives
to attract domestic and international players to create
electrolyser manufacturing capacity in the country.
A target-backed government incentive can greatly
accelerate manufacturing. The European Union has set
a target of 6 GW of electrolyser capacity by 2025 and
40 GW by 2030.
49
The ambitious targets are backed by
a functioning carbon trading mechanism and stricter
emission norms. Given the significant increase predicted
for electrolyser manufacturing in the next decade,
Indian manufacturing of electrolysers that support the
Indian green hydrogen industry could signal the advent
of a sunrise opportunity.
Initiatives like the United Nations Framework Convention
on Climate Change’s Green Hydrogen Catapult coalition
aim to drive down the cost of green hydrogen to less
than $2/kg by scaling up manufacturing of electrolysers
from the current estimated capacity of 2 GW to 25 GW
by 2026.
50
This growth is expected to materialize rapidly
with the commercial viability of hydrogen expanding
beyond the transport sector to the industry and building
sectors in the coming decade. This growth is attracting
global manufacturers like Orsted, ACWA Power, Envision,
Yara, Iberdrola, and Snam, which have already committed
ambitious manufacturing targets for electrolysers.
As per the Ministry of New and Renewable
Energy, India is already home to half a dozen
alkaline electrolyser manufacturers today.
However, the ministry acknowledges the need
for improving electrolyser technology to make
them more efficient and economical. A few
PSUs in India possess the manufacturing
capability for producing BoP components, but
the domestic production of electrochemical
stacks remains muted. The current electrolyser
demand in India for the chlor-alkali industry is
met by international manufacturers. Indigenous
solutions providers have also partnered with
international electrolyser manufacturers to
meet the domestic demand for hydrogen.
Beyond commercial hydrogen production
activities, there is significant research being done
across various institutions in the country. A few
notable research projects are mentioned below:
• Bhabha Atomic Research Centre (BARC) has
developed an alkali water electrolysis
technology for commercialization that can
produce 10 Nm3/hr of hydrogen.
Box 12Existing Electrolyser Manufacturing and
Research Efforts in India
48
• CSIR-CECRI, Karaikudi is designing
electrodes and electrolytes for hydrogen
generation using seawater with reduced
titania as a catalyst.
• The University of Lucknow is exploring
the use of transition metal mixed oxides
for alkaline water electrolysis along with
preparing electrodes using suitable
techniques.
• A consortium of institutes including IIT
Kanpur, IIT Madras, Dayalbagh Educational
Institute, IIT Jodhpur, CECRI Karaikudi, and
BARC are aiming to develop a scalable
design for a solar hydrogen generation
system using multiple technologies.
• ONGC Energy Centre alongside IIT Delhi
are utilizing Sulphur-iodine thermochemical
hydrogen cycle to generate low-cost clean
hydrogen fuel for industrial consumption. www.niti.gov.in | www.rmi.org /
51Harnessing Green Hydrogen
Encouragement towards electrolyser manufacturing
can ensure supply-chain security for the Indian
hydrogen economy and set up India to take advantage
of this emerging industry. Production and demand
side encouragements for green hydrogen as well as
direct incentives for manufacturing will be necessary.
Further, non fiscal measures like improving the
process for regulatory clearances coupled with
preferential treatment in public tenders can also
enable the environment for domestic manufacturing of
electrolysers.
Research and Development Program
Beyond encouragement for manufacturing a commercial
results-oriented research and development program
should be instituted focusing on electrolysers, fuel cells
(see Box 13 for a review of fuel cells), and associated
components looking at efficiency improvement, cost
reduction, stack life extension, and development of
a technology less dependent on metal and material
imports. This program can be a collaborative effort
by key industry players and renowned academic
institutions.
India should invest $1 billion in R&D by 2030 to catalyse
the development of commercial green hydrogen
technologies across the value chain. Instead of blanket
funding of research Institutions, the government can
implement a focused and commercial results-oriented
R&D program with well defined targets and rewards/
incentives for commercial technology development.
NITI Aayog recommends a mission mode R&D drive in
collaboration with the industries in the following area:
• Early-stage R&D to enable technologies that
reduces the cost of hydrogen delivery and
dispensing.
• Manufacturing techniques to reduce the cost
of automotive fuel cell stacks at high volume.
• R&D that reduces the costs of manufacturing
electrolyser components, using advanced
techniques such as additive manufacturing.
• Compression of hydrogen to 875 bar using
electrochemical cells and metal hydride materials.
• Improve efficiency and reduce the capital cost
of hydrogen liquefaction, using a vortex tube
concept.
• Establish the potential for magnetocaloric
technologies to liquefy hydrogen at twice the
energy efficiency of conventional liquefaction
plants.
• Secure critical mineral supply either through
indigenous development or global collaborations
for the supply chain of Nickel, Zirconium,
Lanthanum, Yttrium, Platinum, Iridium and other
key raw materials used in electrolysers.
A model R&D program is given below as an example of
such a target-based technology development program.
Exhibit 22Proposed technology innovation and scaling funding
Source: NITI Aayog
TypeInitiative Participants Public Investment Private Investment
International
Agencies
Early stage R&D Grand Challenge
Industry-Academia
Joint Teams
$400 Million $50 Million
Prototype and
Validation
Industrial Test Beds
National Labs or
Private Entities
$100 Million $5 Million $25 Million
Commerical
Scale Up
Hydrogen Venture
Capital
VC Funds$500 Million $300 Million $200 Million www.niti.gov.in | www.rmi.org /
52Harnessing Green Hydrogen
Fuel cells are in a sense the opposite of electrolysers.
Instead of splitting water into hydrogen and oxygen
using electricity, it houses an electrochemical reactor
that uses energy source natural gas or hydrogen as a
main source to produce electricity. They consist of an
electrolyte and two electrodes. Hydrogen molecules
react with the anode to form positive hydrogen
ions and electrons. The ions travel through the
electrolyte to react with air (oxygen) at the cathode,
while the electrons pass through a connected circuit
generating electricity. Finally, hydrogen ions and
electrons combine with oxygen at the cathode to
produce water.
Fuel cell technologies are similarly differentiated
based on the stack technology. PEM is the most used
fuel cell and is suited for transport applications due
to its lower operating temperature requirements and
quick start. The other technology options are more
suited for distributed power generation, except for
alkaline fuel cells, which are mainly used in military
applications.
Cost Implication
Manufacturing costs dominate the total cost of PEM
fuel cells, whereas the share of materials cost is
much lower. An increased scale in production can
bring the manufacturing costs down dramatically—a
45% reduction in fuel cell system costs is plausible
with scaling from 10,000 systems to 200,000
systems. India’s scale in terms of manufacturing
capability and demand and low-cost labour can help
reach economies of scale much faster. Investment
in larger equipment, advancement in manufacturing
operations, better utilization of machinery, and
aggregated procurement are the biggest factors to
reduce manufacturing costs related to fuel cells.
India’s Domestic Manufacturing Opportunity
RMI’s analysis indicates that fuel cell demand
through heavy-duty trucking alone presents a
$4 billion market opportunity by 2050 in India,
amounting to 10%–18% of global fuel cell demand
by 2050. Similar to electrolysers, this could create
opportunities for domestic manufacturing in India.
Market size and manufacturing opportunities for
fuel cells can be even greater if stationary fuel cell
systems also play a role in the future.
Box 13A Review of Fuel Cells
51 Export
Opportunities www.niti.gov.in | www.rmi.org /
54Harnessing Green Hydrogen
Export Opportunities
India’s domestic demand expectation will mean that it will not be a pure export-driven hydrogen producer like the
Middle East or Australia. But driven by the low cost of renewables in the country, India can still emerge as a one of
the most competitive sources for green hydrogen in the world (Exhibit 23). This will impact not just the prospects for
hydrogen exports but also the competitiveness of low-carbon products with embedded hydrogen such as green steel
and green ammonia.
Exhibit 23Comparison of levelized cost of green hydrogen in selected countries
Source: B N EF,
52
RMI Analysis
Hydrogen Export Opportunities
Disparity in sources and consumption of green hydrogen is bound to create markets for green hydrogen as a tradeable
energy commodity in the long term, albeit with challenges. We are already seeing early momentum as traditional
energy importers like Japan and South Korea, willing to pay premium prices, are increasingly pursuing the possibility
of importing hydrogen through ocean shipping (e.g., with Australia, see Box 14) either through LH
2
, LOCHs, and NH
3
.
European countries are also welcoming the prospects for both intra-regional and international hydrogen trade. Traditional
energy exporting regions like Australia and the Middle East are increasingly positioning themselves for hydrogen exports.
Box 14The Japan-Australia Hydrogen Energy Supply Chain (HESC) Project
53
Japan and Australia are currently working on a Hydrogen Energy Supply Chain (HESC) Project, the world’s
first endeavor to ship hydrogen over the ocean. It aims to safely produce and transport clean liquid hydrogen
from Australia’s Latrobe Valley in Victoria to Kobe in Japan. HESC hopes to demonstrate the viability of an
end-to-end hydrogen supply chain. The HESC Project is being developed in two phases, beginning with a
pilot, and moving on to commercialization. In the commercialization phase, coal from the Latrobe Valley
will produce blue hydrogen due to the addition of CCS. Australia aims to kickstart a hydrogen export industry
with this project. The pilot phase is to be completed in 2021 with commercial operation targeted for the
2030s depending on the results of the pilot.
0
0.5
1.0
1.5
2.0
2.5
3.0
South Korea
Japan
Philippines
Indonesia
Russia
Thailand
Malaysia
France
Germany
Turkey
Canada
Italy
China
Mexico
Spain
Saudi Arabia
U.S.
U.A.E.
Brazil
Australia
Chile
Sweden
Scandinavia
India (best case)
U.K.
2030 2050
LCOH ($/kg) www.niti.gov.in | www.rmi.org /
55Harnessing Green Hydrogen
Competitiveness of Indian Green Hydrogen Exports
Green hydrogen from India in 2050 could be remarkably competitive with hydrogen from countries like Australia
and the United States, which are already in conversation for ocean shipping of hydrogen. Even by 2030, Indian green
hydrogen could be competitive at the margin for select geographies.
Exhibit 24Potential delivered cost of Indian green hydrogen
Source: B N EF,
54
TERI, RMI Analysis
The prospect for pipeline trade to major ports and
energy trading hubs in the region like Singapore exists if
end-use sectors such as shipping and the airline industry
(in addition to refining) increase their use of hydrogen.
Challenges to Hydrogen Export
However, this brief analysis doesn’t highlight the various
techno-commercial challenges to international hydrogen
trade and India’s preparedness for it.
While marine hydrogen trade is theoretically promising,
many challenges persist. Unlike petroleum or natural
gas where resources are constrained by geography,
green hydrogen could be produced onshore, provided
resources (land, renewable electricity, etc.) are
adequately available. Export-dependent countries, willing
to pay a price premium, can also theoretically utilize
imported liquified natural gas (LNG) to produce hydrogen
onshore through steam methane reformation (SMR).
With LOHCs and hydrides like ammonia, the additional
energy cost of conversion makes cost considerations
necessary.
Pipelines, on the other hand, remain underdeveloped,
even nationally. As of 2016, there were only
approximately 2,800 miles of dedicated hydrogen
pipeline installed globally, with 1,600 miles of those in
the United States.
55
This contrasts with over 130,000
miles of onshore oil pipelines and 300,000 miles of
onshore natural gas pipelines in the United States alone.
Hydrogen blending is being proposed and utilized in
national natural networks but has not been used in
international trade yet. Due to their high capital cost and
long lifetime, hydrogen pipelines are typically reserved
for high volume flows. Lastly, the issue of hydrogen
embrittlement of steel can result in safety concerns and
potential cost considerations.
AUSTRALIA TO JAPAN (LH2) - 2050
FUTURE BEST CASE TRANSPORT COST
FUTURE BEST CASE DELIVERED COST
PRODUCTION COST (2030)
PRODUCTION COST (2050)
AUSTRALIA TO JAPAN - LH3 - 2030
US GULF TO KOREA (LH2) - 2030
US GULF TO KOREA (LH2) - 2050
AUSTRALIA TO SINGAPORE - PIPELINE - 2030
US GULF TO KOREA (LH2) - 2050
Pipeline - Chennai - SingaporePipeline - Mumbai - Oman
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
US$/kg
Shipping - LH2 - Chennai - TokyoShipping - LH2 - Chennai - Korea
Best case delivered cost of green hydrogen www.niti.gov.in | www.rmi.org /
56Harnessing Green Hydrogen
This challenge of infrastructure preparedness is
both global and local. India’s lack of experience as a
hydrocarbon exporter means there is a comparatively
steeper learning curve before it can effectively compete
with regions like Australia and the Middle East, which are
also equally blessed with the prospect of low-cost green
hydrogen. In the near-term this will involve assessment of
infrastructure readiness for hydrogen exports. Brownfield
assets including pipelines and LNG import terminals can
theoretically be repurposed for exports but given all
the challenges related to hydrogen transportation and
storage, a thorough assessment is warranted.
Near-term infrastructure development should also
be cognizant of such long-term prospects. In the
longer term, becoming an energy exporter will require
the country to invest in improving the business
environment, including aspects such as transparent
access to land, labour, and capital; a legal mechanism to
honour contracts; and a stable political environment.
Green Hydrogen-Embedded
Low-Carbon Products
Exporting hydrogen itself may have techno-commercial
challenges. But markets for products that rely on low-
carbon hydrogen as inputs (such as green steel and
green ammonia) can also be competitive opportunities
to leverage the green hydrogen potential of India.
Although it is early to ascertain how these markets
might evolve, this section helps illustrate the potential of
India’s low-carbon ammonia and steel in global markets.
Green Ammonia
Given the existing demand of hydrogen for ammonia
production, ammonia offers a more immediate path to
market than many other use cases. Beyond traditional
use cases like fertilizer and industrial feedstock,
ammonia is now being looked at for power generation,
marine fuel, and most importantly, as potentially the
most competitive energy carrier for the sea borne
hydrogen trade.
56
Unlike other “green” commodities,
the supply chain and logistics for ammonia is highly
developed and includes wide networks of ports, storage
facilities, and established shipping routes.
57
And given its
centrality in many sectors there are additional avenues
for moving up the value chain, boding well for the future
of a global trade in green ammonia.
A decarbonization agenda is shaping global demand.
Japan is expanding the use of ammonia as co-firing fuel
for its coal plants and targets annual consumption of 3
million tonnes by 2030 and 30 million tonnes by 2050.
58
Several companies are developing innovative engines
and turbines that can use ammonia as a feedstock.
59
Ammonia projects for marine fuel are also emerging.
India’s Potential
Given the cost sensitivity of ammonia to the price of
hydrogen, as discussed in Chapter 2, evolution of the
global green ammonia market will also rest heavily on the
prices at which green hydrogen can be delivered. In our
analysis, India’s early renewable LCOE advantage leads
to low-cost hydrogen and offers advantages in related
electrified processes. Today, ammonia produced by this
pathway would come at potentially a significant premium
over ammonia produced by conventional pathways.
However, through innovation and continued cost decline,
the pathway of production could become significantly
cheaper. This cost advantage could also potentially
improve India’s competitiveness for green hydrogen
trade, given ammonia’s role as an energy carrier.
Since infrastructure for ammonia production already
exists for the fertilizer industry, there are significant
synergies India should explore for expansion to cater to
an emerging global demand for green ammonia. www.niti.gov.in | www.rmi.org /
57Harnessing Green Hydrogen
Creating a Global Market for Green Ammonia
Building a global market for green ammonia will require
significant expansion of end use from more cost-
sensitive fertilizer and industry to energy applications,
which potentially could absorb slightly higher cost in
the right geographies. Identifying and encouraging
applications that can pay a higher green premium need
to be supported.
Decarbonization goals have and will continue to dictate the
longer-term direction of green ammonia. Therefore, early
leadership from prominent nations and clear alignment
in global policy direction is needed to provide the right
signal for the private sector to invest in market building.
To sustain and grow the market, significant innovation and
lowering of capital and energy cost will be required. This
could involve instituting research and development and
incentive mechanisms at a multilateral level. Mechanism
like carbon prices can also provide much needed levelling
of the economic gap for many of the end uses.
Green Steel
There is a tacit recognition of steel being an increasingly
important and viable pathway for hydrogen use.
DRI technology is already in use through natural gas,
and the first commercial pilots for hydrogen DRI are
already running. Major steel producers have announced
their foray into green steel, with seven out of the ten
biggest steel producing countries initiating green steel
projects.
60
Most of the investments are concentrated in
Europe with Sweden leading the way.
61
Swedish green
steel start-up H2GS AB recently raised $105 million
targeting an annual production of 5 million tonnes by
2030.
62
India’s own Tata Steel has announced plans for
green steel in its UK plants.
63
Decarbonization seems to be the biggest driver for this
shift and most projects are in countries with aggressive
CO
2
reduction targets. But the steel mills of progressive
companies that currently invest in and commit to
low-carbon production only represent 8% of global
steel production. A 100-fold step-change in the pace
of transition is needed for the steel industry to adhere
to a 1.5
°
C pathway.
64
Given project lead-time and the
long lives of steel mills, there is a need for immediacy in
initiating this transition.
Exhibit 25Cost comparison of green ammonia
Source: RMI Analysis
-80%
80%
100%
120%
-60%
60%
-40%
40%
-20%
20%
0%
202020302050
Discount / Premiun
AUSTRALIA
CHINA
INDIA
Comparison of potential green ammonia production cost
(against benchmark ammonia prices of USD 500/tonne) www.niti.gov.in | www.rmi.org /
58Harnessing Green Hydrogen
Steel is a traditionally tight margin market. Thus prices reflect a very tight capacity to absorb variable costs. In our
assessment, the same advantage of low hydrogen cost that allows India a potential advantage in manufacturing
ammonia creates a pathway for steel. This is further strengthened when considering the significant volume of
electric arc furnaces in use in India today (around 56% of current fleet)
66
that could be used in DRI crude production.
Additionally, while not modelled, the potential to utilize slack capacity in these EAFs would further reduce the cost points.
Creating a Global Market for Green Steel
Given the importance of steel to industrialisation, and the economics of multiple sectors, building a global green
steel market will require coordinated policies, pooling of investment and research and development resources,
harmonisation of product and process standards, and significant transition financing. RMI lists the following set of
interventions that could encourage this transition:
India’s Potential
This recognition bodes well for the future of the global green steel market. The only question is when it will start
making economic sense for scaling this transition. Hydrogen-based steel is expected to be cost-competitive between
2030 and 2040 in Europe.
65
But this scenario can be accelerated if an adequate carbon price is introduced or if the
price of hydrogen drops substantially.
Exhibit 26Cost comparison of green steel
Source: RMI Analysis
AUSTRALIA
CHINA
INDIA
-40%
40%
-30%
30%
-20%
20%
-10%
10%
0%
202020302050
Discount / Premiun
Comparison of potential green steel production cost
(against benchmark hot-rolled steel prices of USD 500/tonne) www.niti.gov.in | www.rmi.org /
59Harnessing Green Hydrogen
Key Takeaway
This preliminary analysis effort is not sufficient
to provide granular justification of specific cost
points, but the trend indicates the potential areas of
advantage that India could begin to leverage today.
The continued drive towards low-cost renewables
further supports the expected declines in electrolyser
capital expenditures and improvements in efficiency
that will drive to significantly more competitive pricing
for export hydrogen and commodities. Although India
would appear to have some advantage, these will be
significantly competitive markets internationally as
similar cost declines materialize in other countries.
Flexibility and nimbleness will be required to realizable
this advantage in the long term.
Ultimately, this export competitiveness circles back
to market creation to enable scaled deployment of
green hydrogen so that price decline expectations
can be met. In the medium term, export projects can
potentially serve as a market creation mechanism for
green hydrogen production. Green ammonia can be an
ideal product since India should already be targeting
ammonia for fertilizer production. In due course, India
can also pre-empt the green steel market through
export-oriented pilot projects and manufacturing
schemes. Government-to government cooperation
must be leveraged to develop collective frameworks
and labelling and standards around green hydrogen
and embedded products.
Policy Intervention
• Industry self-regulation and decarbonization commitments of critical scale
• Carbon taxes or equivalent mechanisms to reduce the cost advantage of high-carbon manufacturing
• Import tariffs based on carbon content to protect the local market from carbon leakage (i.e., competition from
high-carbon import)
• Carbon performance requirements in government and/or private procurement
Finance Intervention
• Government or voluntary support to lock in value premium for low-carbon steel production to reduce
uncertainty for investors in emerging technology
• Late stage R&D support for commercialization of technologies currently in pilot stage
• Investor pressure on steel companies to disclose and improve their carbon performance
• Securitization programs or other financial tools to manage the potential write-down value of high-carbon
production assets
Source: RMI
67
Exhibit 27Interventions towards a global green steel market
Market Information
• A differentiated low-carbon steel product to enable the supply-demand dynamic to create price premium for a
higher-performing supplier
• Asset portfolio differentiation to reduce risk exposure to medium-to-long-term market development toward a
low-carbon future
• New vehicles to scale intellectual property (IP) beyond single entitie www.niti.gov.in | www.rmi.org /
60Harnessing Green Hydrogen
Box 15Financing the Hydrogen Transition
68
Enabling India’s hydrogen transition will require an increased access to and flow of finance on part of several
stakeholders. Different stakeholders have different roles across technology stages due to differing risk
appetites and investment horizons. Considering these roles help define the most effective ways for each
stakeholder to finance green hydrogen. Mobilising finance will be particularly important to ready the market
for achieving large-scale deployment.
Public Finance
Government expenditure and publicly owned bodies are crucial to every stage of technology innovation due
to longer-term investment outlooks and greater tolerance for uncertainty. Governments can provide grants
and loans to start-ups and projects, support entrepreneurs through incubators and investor networks, and
put in place regulations that manage first-mover risks. They are crucial source for concessional finance to
bridge markets and support scale-up. Government can also use public procurement and purchase incentives
to create demand in niche markets and “crowd in” private investment.
Globally, governments are moving towards supporting commercialisation and demonstration of entire value
chains, often through public-private partnerships. Nations are increasingly using regions, cities, or industrial
clusters as focal points of financing. In addition to direct support and programs, public financial institutions
are being engaged to support the transition.
Multilateral Finance
Multilateral development banks (MDBs) and climate finance institutions can help catalyse technological
adoption across stages in partnership with public and private actors. MDBs can provide venture capital and
investor networks to entrepreneurs and projects, and support governments in developing enabling policies/
regulations. They can also explore support to demonstrations and pilots with industry actors. MBDs are also
crucial for concessional finance and can capitalise guarantees and risk-sharing facilities to support scale up.
They can also provide directed lending to local financial institutions. Although interest in hydrogen has been
growing, substantial funds have not yet been mobilized.
Private Finance and Industry
Private investment and business input is essential to developing a robust market, spreading market
awareness, and creating space for evidence-based policymaking. Corporate venture capital can incubate
applications of green hydrogen and provide opportunities for scale-up. Industries can finance in-house pilots
and first movers, possibly via public-private partnerships. Further, the larger financial industry can adjust
investment criteria and build capacity for maturity, engaging in risk-sharing and blended finance models.
They can also develop project finance models for green hydrogen. Private equity is slowly being mobilised,
signified by the launch of HydrogenOne Capital— the world’s first hydrogen-dedicated investment fund,
worth $315 million. Project finance, although a viable financial mechanism for funding hydrogen projects, is
still at early stages of exploration.
Policy and regulatory risks are seen to constrain private investment in hydrogen projects, especially in
nascent markets such as India. Hydrogen has limited commercial viability at this stage due to higher upfront
costs, longer payback periods, and unproven returns. But this creates an opportunity for a national program
to prime India through the design of de-risking schemes such as guarantees, first-loss tranches, and
concessional insurance while simultaneously building the capacity of public and private financial institutions. Steps to make India
a global hub of
green hydrogen www.niti.gov.in | www.rmi.org /
62Harnessing Green Hydrogen
Exhibit 28Potential direction of a National Green Hydrogen Roadmap
Source: NITI Aayog
Steps to make India a global hub of green hydrogen
The analyses and discussions presented in this report are only meant to highlight the opportunities that green
hydrogen presents for India for decarbonization, manufacturing, and exports. Real action is required for the country
to truly benefit from these opportunities.
This chapter distills the insights into ten actionable recommendations that can lead to a National Action Plan on
Green Hydrogen to guide and enhance the National Hydrogen Mission.
69
1. A detailed roadmap focused on all aspects of ‘Green Hydrogen’
The recent announcement of the National Hydrogen Mission signals the right intent but it needs to be complemented
with further policy direction in the form of a national roadmap/strategy. The emphasis of this roadmap should be to
elaborate on the government’s vision for green hydrogen in multiple sectors with timelines and investment aspirations
given the long-term cost advantage and multiple benefits that we have established in this report. This will improve
investors’ confidence and will converge the entire value chain and the various government agencies towards a
singular vision.
2020-25 2025-30 2030-40 2040-50
NH
3
NH
3
Enabling Green Ammonia for exports
Refinery
Ammonia for fertilizer
Green Steel for exports
Domestic Green Steel
Heavy Duty Trucking
• Seasonal storage and
other energy applications.
• Ships and airplanes.
City Gas Distribution (CDG) blending
Limited scale-upPilots
Pilots
Pilots www.niti.gov.in | www.rmi.org /
63Harnessing Green Hydrogen
2. Establish an aspirational cost-reduction target
and initiate supply-side intervention for achieving
cost reduction of green hydrogen
Enabling this roadmap with require both demand and
supply side interventions. In tandem with cost reduction
targets in the roadmap, the government should also
focus on enabling a cost reduction pathway for green
hydrogen to be produced in the country. The current
Green Hydrogen policy lays out adequate measures
focusing on inter-state transmission (ISTS) charges
waiver and open access for green hydrogen and green
ammonia production. It can be further improved by:
3. Initiate mandates and incentives towards a
visionary target of 160 GW of green hydrogen
production capacity including 100 GW of exports
In the demand sector, the government should set a
visionary target complemented by strict mandates
and adequate VGFs on more immediately addressable
end-use demand.
End-use sectors should be further assessed to identify
those sectors ready for scaled consumption and those
ripe for small- and large-scale pilot development.
They should also be supplemented with geographical • Reduction or exemption of tax and duties like the
GST and custom duties;
• Dollar-based tariffs for green hydrogen like the
standard practice in the oil and gas sector; and
Other measures such as revenue recycling of any
carbon tax, low emission PPAs, and avenues for
firming electricity supply including discounted grid
electricity to complement VRE generation.
To further motivate the private sector, the government
should establish an aspirational price decline target.
Such a target is proposed below:
Year202520302050
Green H2 Price$1.50/kg$1/kg< $1/kg
Exhibit 29Proposed aspirational hydrogen price targets
Source: NITI Aayog
assessments to identify potential clusters around
existing factories, transmission infrastructure, and
renewable hubs. Such cluster identification can also
include the prospect of exports.
A plan should also be set to propose clear mandates
around hydrogen blending in existing and potentially
future consumption sectors. This will provide demand
certainty for early green hydrogen projects and
encourage early market development. Potential
mandates being proposed by NITI Aayog are shown in
Exhibit 30.
Exhibit 30Potential mandates for existing applications
Source: NITI Aayog
SectorTarget TypeMandateCut-off Date for the Sector to go 100% Green
RefineryCorporate level targets 50% by 2030 2035
FertilizersImport substitutions 100% by 2030 2040
For new applications, where the viability of using green hydrogen is still nascent, necessary incentives should be
designed. One example is a PLI scheme for green steel targeting export markets. NITI Aayog is proposing the several
visionary targets for new applications (Exhibit 31). www.niti.gov.in | www.rmi.org /
64Harnessing Green Hydrogen
Year
Exhibit 31Aspirational targets for new applications
Source: NITI Aayog
Sector TypeTargets
SteelOld plants
Fleet level carbon intensity by 2035 should be less than 2 tonnes of
CO
2
per tonne of steel
New capacity
At least 20 million tonnes of green hydrogen- based green steel to be
made in India primarily for exports
City Gas Distribution (CDG) Pilot and subsequent scale-up 10% blending by 2025 and 20% by 2030
Green AmmoniaExports
25 million tonnes of exports to countries such as Japan, Korea, and
the European Union
Heavy-Duty Vehicles (HDVs) Pilots on specific routes
1,000 trucks, 50 boats, and 10 aircrafts to be piloted by 2030. Three
hydrogen corridors to be developed across the country based on
state grand challenge.
Power
Allow participation in RTC
tenders
Where economics makes sense, allow hydrogen to compete with other
storage technologies in Round the Clock tenders by SECI.
Box 16Assessing Viability Gap Funding for Exports
India has the potential to become a major exporter of green hydrogen-based products, given a strong base
of manufacturing excellence and ample availability of cheap renewable sources. However, the current high
cost of green hydrogen compared with grey hydrogen will act as a major roadblock for India to transition to a
global force in green hydrogen production and consumption. One policy instrument that can enable cost parity
of green hydrogen with grey is VGF, where a developer setting up a green hydrogen plant would be provided
marginal funding so that the green hydrogen price would become equivalent to grey hydrogen prices.
Since exports provide a strong potential for scaling green hydrogen uptake and fall within the priorities of
Government of India, an analysis has been developed to assess the amount of VGF required to match India’s
green hydrogen export aspirations. This assessment is an illustration and similar methodology can be followed
to assess VGF for other end uses.
Three scenarios for green hydrogen prices are assumed (representing the lower, middle and higher end
of green hydrogen prices previously shown in Exhibit 11 of this report). In each scenario, the price of green
hydrogen in a given year is compared against a target grey hydrogen price in that year. Then, the required
electrolyser price to reduce the green hydrogen price to the target price is assessed. The difference in the
upfront electrolyser prices multiplied with the electrolyser capacity in that year gives the yearly VGF
required. This process is repeated for each consecutive year. The electrolyser capacity for this analysis is
based on the target of 95GW by 2030. Moreover, the starting year for VGF is 2024, with ending year
differing in each scenario. www.niti.gov.in | www.rmi.org /
65Harnessing Green Hydrogen
Year
Exhibit 33Resulting cumulative electrolysis capacity targets
Source: NITI Aayog
Source: RMI Analysis
MarketTargets for cumulative electrolysis capacity by 2030
Green Hydrogen
Demand Targets
Addressable demand (RMI) 20 GW
Initiatives-based Demand45 GW
Exports aspiration95 GW
Total160 GW electrolysis
Exhibit 32 shows the VGF required for exports along with associated electrolyser capacity in the three
scenarios. Overall, a range of $1.4 billion - $5 billion will be required in VGF for India to match its aspirational
electrolyser targets for exports. It’s also interesting to look at why and how VGF is different for each scenario.
In scenario 1, where price declines for green hydrogen are happening at the fastest rate, the VGF will only be
required from 2024 to 2026. This is mainly because from 2027, green hydrogen prices will be less than the
target grey hydrogen price, negating the need for VGF. Moreover, the electrolyser scale till 2026 is around
10 GW of cumulative capacity. In scenario 2, the VGF requirement runs for four years, from 2024 to 2027.
In this scenario, the cumulative VGF requirement is $ 3 billion, which is twice the requirement in scenario 1.
This is because of two reasons – 1) the VGF is for four years instead of three years, because the price parity
is reached from 2028, instead of 2027 as in the first scenario and 2) cumulative GW capacity is also higher
because of added capacity in the year 2027. Similarly, VGF is the highest in scenario three because price
parity of green hydrogen happens in 2029, thereby necessitating the requirement of $5 billion across five
years (2024 – 2028).
Exhibit 32VGF and electrolyser capacity for exports
6
5
4
3
2
1
0
10
20
30
40
50
0
VGF ($ billion)
Electrolyzer capacity (GW)
Scenario 1Scenario 2Scenario 3
$1.4 billion
$3 billion
$5 billion
VIABILITY GAP FUNDING (VGF)
CUMILATIVE ELECTROLYZER CAPACITY www.niti.gov.in | www.rmi.org /
66Harnessing Green Hydrogen
Exhibit 34Visionary 2030 electrolysis target for green hydrogen production
Source: NITI Aayog
GREEN HYDROGEN EXPORTS
PRODUCT EXPORT INCENTIVES
PILOTS
MANDATES / VIABILITY GAP FUNDING (VGF)
ADDRESSABLE DEMAND (RMI)
0
20
40
60
80
100
120
140
160
180
RefineryMethanolSteelHDVs CGDVisionary
Demand Target
Exports
(other H2 carriers)
Ammonia
GW of Electrolyzer Capacity
Million tonnes of H2
41 160
5
0.2
0.5
12.3
31
15
69
0
2
4
6
8
10
12
14
4. Set-up visionary electrolyser manufacturing
capacity target of 25 GW for 2030 coupled with
supportive manufacturing and R&D investments
Given how important electrolyser cost is to the
cost-reduction pathway for green hydrogen and the
significant manufacturing opportunity it represents,
the roadmap should identify a timeline and scale of
maunfacturing support for electrolyser. India should
envisage a production capacity accounting not only for
Indian demand, but also for burgeoning global demand.
Radically improving the speed of regulatory clearances
coupled with preferential treatment in public tenders will
help catalyse local manufacturing.
The report predicts a significant increase in electrolyser
manufacturing in India in the next decade. India
should look at a minimum target of 25 GW by 2030.
The manufacturing of electrolysers to support the
Indian green hydrogen industry could signal the
advent of a multibillion-dollar sunrise opportunity with
significant export potential. In addition to electrolysers,
manufacturing of necessary value chain components
such as pipes, cylinder storage, compressors, heat
exchangers, nozzles, hoses etc should be encouraged
using adequate local value creation initiatives.
India should invest $1 billion in R&D by 2030 to catalyse
the development of commercial green hydrogen
technologies across the value chain. Industry and
academia should be ecouraged to particiapte together
as teams in well capaitalised grand challenges with
specific aspirational targets. R&D in alternative clean
hydrogen production processes like bio-hydrogen
technologies should also be encouraged.
5. Initiate green hydrogen standards and a labelling
programme
While the definition of Green Hydrogen has been
established in the policy, it is important to undertake
immediate actions on standard development and
harmonisation:
• Though standards are already available for grey
hydrogen, they are designed for limited industrial
use. It is important to construct new hydrogen
standards keeping in mind the widespread use of
hydrogen across sectors.
• Standards for new products such as electrolysers,
fuel cells, and other new products are required.
• A digital (AI/ML equipped) labelling and tracing
mechanism certification of origin should also be
initiated for ascertaining the green credentials of
all supply route of hydrogen including electrolytic,
fossil fuel based and bio based hydrogen.
• Government-to-government mechanisms must be
utilized towards initiating global regulations and
standard harmonization. www.niti.gov.in | www.rmi.org /
67Harnessing Green Hydrogen
Exhibit 35Policy driven demand targets of major import
focused countries
Region 2030 2050
Japan 3 MMTPA 20 MMTPA
South Korea 3.9 MMTPA 27 MMTPA
Germany 2.7 - 3.3 MMTPA
• Public entities such as BIS (Bureau of Indian
Standards) and PESO (The Petroleum and
Explosives Safety Organization) are expected to
take a leading role in this process.
6. Promotion of exports of green hydrogen-embed-
ded products and green hydrogen through an
international alliance
Exports of green hydrogen-embedded products in the
near term and of green hydrogen itself in the medium
to long term could also serve as important levers for
market creation and participation in the emerging
global green hydrogen market. The government
must explore forming government-to-government
partnerships with target geographies such as Japan,
Korea, Germany etc and integration of hydrogen into
existing energy and industrial partnerships globally.
This should include developing collective frameworks
and labelling and standards around green hydrogen and
hydrogen-embedded products like green steel and green
ammonia. The government should also explore near-
term incentives around green ammonia and green steel
production through public incentives to bridge the initial
viability gap.
7. Investment facilitation
The government has a large role in providing financial
certainty to early adopters of energy transition
technologies. In the near term a credit worthy offtaker
like SECI can be nominated to aggregate demand in
the initial period. In the long run, a smooth and market-
oriented green hydrogen industry should be developed.
Efforts should be made to ensure availability of long
tenor and low-interest finance for viable green hydrogen
projects. Developing a functioning carbon market can
also accelerate decarbonization of hard-to-abate sectors,
thereby making green hydrogen projects financially
more viable in the process. This will help create a more
predictable cash-flow for early adopters without loss
to the Indian exchequer, while making them more
competitive with existing carbon-intensive processes.
It is estimated that more than $250 billion (INR 18 lakh
crore) investment is required just to meet the 160 GW
electrolysers target (for financing the electrolysers and
associated renewable capacity).
70
It is critical for India to
take a leading role in accessing low-cost climate finance
through either multilateral institutions or by capitalising
on bilateral agreements with developed nations to
access part of the $100 billion/year commitments made
during COP16.
8. Encourage state-level action and policy making
related to Green Hydrogen
To ensure a widespread adoption of new technologies,
national and state-level policy decision-making need
to go hand in hand. It is evident from policy efforts
on electric vehicle (EV) adoption in India, where
various states have launched their own policies to
complement national-level policies, that dedicated
action is important at the state-level. Similarly, all states
should be encouraged to launch their own state-level
green hydrogen policies. Since each state is unique,
the policies can be targeted based on their needs and
strengths, where some states could focus on low-cost
green hydrogen production either through electrolytic
or bio-based routes, while others could focus on demand
clusters, etc.
9. Encourage capacity building and skill
development
Building a robust hydrogen economy is going to be new
to India. This will necessitate appropriate and rapid
skills development across the ecosystem including
government, industry, and academia. While technology
knowhow is essential, focus must go beyond to include
business models, policies, and geopolitics. A scalable
skills programme will have to be designed, developed,
and deployed rapidly. www.niti.gov.in | www.rmi.org /
68Harnessing Green Hydrogen
10. Construct an inter-ministerial governance structure
Considering the multi-sectoral impact of the hydrogen economy, governance of the transition efforts will be critical.
An interdisciplinary Project Management Unit (PMU) with globally trained experts must be created which can dedicate
fulltime resources to effectively implement the mission. The PMU must be nimble enough to adapt to global trends in
this fast-evolving sector. At the policy level, an inter-ministerial mechanism should be instituted to coordinate across the
various line ministries’ and departmental efforts required to achieve the target of the mission. Each co-chair of the inter-
ministerial mechanism would have a specific target to achieve. Conclusion www.niti.gov.in | www.rmi.org /
70Harnessing Green Hydrogen
Conclusion
Hydrogen can play a critical role in India’s energy
transition by enhancing its industrial competitiveness in
an increasingly decarbonizing world, boosting economic
development, reducing CO
2
emissions, and improving
public health and quality of life. Major countries around
the world are placing big bets and investing in hydrogen-
based technologies, and India can play a leadership role at
the global level in moving forward the hydrogen economy.
The biggest value proposition of hydrogen is in
decarbonizing the hard-to-abate sectors. Historically,
these sectors have been difficult to address because of a
lack of technically and economically feasible technologies.
Hydrogen can address many of these challenges and play
a complementary role to other efficiency measures to
effectively decarbonize these sectors.
Decreasing costs and an increase in renewable electricity,
along with high-scale manufacturing and technology
improvements in electrolysers will bring the cost of
green hydrogen down in the near future, making it cost-
competitive with existing technologies and fuel options.
With increased pressure on industries such as steel,
refining, and ammonia to reduce their carbon footprint
and de-risk their investment, hydrogen’s importance and
scale are bound to increase.
Apart from fulfilling national goals around reducing
emissions and enhancing domestic manufacturing,
hydrogen paves a way for India to become a global
powerhouse of zero-carbon embedded export products.
Products such as green steel and green ammonia present
an early mover opportunity for India, given India’s
capability and resources to produce them at a cheaper
rate than peer nations such as China and Australia.
Significant challenges need to be addressed to enable this
hydrogen transition. Costs of production are currently
higher, making all green hydrogen-based products more
expensive than fossil fuel-based alternatives. Transporting
and storing hydrogen are costly, and significant build-out
of infrastructure is required to bring down the costs of
delivered hydrogen. Regulations and standards are still
not clear, and financing remains a big challenge.
Key actions are required by policymakers, industry
players, and financial institutions to enable a hydrogen
economy in India. Significant R&D funding geared
towards hydrogen production and applications can help
in technology improvements and reduce costs. A public-
private partnership using these resources to conduct
high quality research, develop pilot projects, test
feasibility, and finally scale deployment can be a first
key step towards widespread adoption of hydrogen.
Policy push is needed both on the demand and supply
side. Demand incentives to ease the barriers of high cost
can enable initial market creation and can be phased out
as the market matures. Simultaneously, there must be a
push on the supply side, combined with infrastructure,
to provide green hydrogen at scale. This can be achieved
with a combination of production-linked incentives for
electrolysers and fuel cells, and requirements for the
industry and private players to deploy these technologies.
While initial deployment can happen in certain end uses
that use hydrogen as a feedstock such as ammonia,
methanol, or refining, it’s important to expand the
applications into other sectors to achieve bigger scales.
Standards and regulations around hydrogen production
and use should be revisited, and implementation of
new regulations and standards should be prioritized to
enable a quick transition to a hydrogen economy.
Financing hydrogen production and applications is
also a key component of this transition. Risk mitigation
measures for industry players is crucial. This can be done
by providing concessional funding, educating and building
capacity for industry and public and private institutions
to enhance multi-stakeholder collaboration, and shared
learning on technology readiness and demonstration
projects. These measures along with special funding for
domestic pilot projects can increase industry and lender’s
confidence and help ease this transition.
India has a unique opportunity to become a global
leader in the hydrogen energy ecosystem. With proper
policy support, industry action, market generation and
acceptance, and increased investor interest, India can
position itself as a low-cost, zero-carbon manufacturing
hub, at the same time fulfilling its goal of economic
development, job creation, and improved public health. www.niti.gov.in | www.rmi.org /
71Harnessing Green Hydrogen
Appendices
Appendix A: Global Examples of Hydrogen Strategies and Roadmap
European Union
Current Hydrogen
Demand
Not AvailableFocussed
Hydrogen
Colour/
Source
Low Carbon - Blue / Green
Policy Target
Demand
6GW capacity by 2024; 40 GW by 2030
10 MMTPA green H2 by 2030
Capital Allocated
(US$)
609 billion
Export/
Import Focus
NA
Demand Focus
(Industry)
1. Chemical feedstock
2. RefiningStrategy Features
1. Market development timeline
2. Direct investments
3. Other economic and financial mechanisms
4. Legislative and regulatory measures
Demand Focus
(Transport)
1. Medium and heavy duty
2. Buses
3. Rail
Demand Focus
(Others)
NA
Germany
Current Hydrogen
Demand
1.65 MMTPAFocussed
Hydrogen
Colour/
Source
Carbon free - Blue / Green
Policy Target
Demand
2.7 - 3.3 MMTPA by 2030
Capital Allocated
(US$)
15-25 billion
Export/
Import Focus
Import
Demand Focus
(Industry)
1. Iron and Steel
2.Chemical feedstock
3. Refining
Strategy Features
1. Market development timeline
2. Direct investments
3. Other economic and financial mechanisms
4. Legislative and regulatory measures
5. Standardisation strategy and priorities
6. Research and development initiatives
7. International strategy
Demand Focus
(Transport)
1. Medium and heavy duty
2. Buses
3. Rail
Demand Focus
(Others)
NA
European Union
71
Germany
72 www.niti.gov.in | www.rmi.org /
72Harnessing Green Hydrogen
Japan
Current Hydrogen
Demand
2 MMTPAFocussed
Hydrogen
Colour/
Source
Blue
Policy Target
Demand
3 MMTPA by 2030 and
20 MMTPA by 2050 (5-30 by 2050)
Capital Allocated
(US$)
664 million
Export/
Import Focus
Import
Demand Focus
(Industry)
NA
Strategy Features
1. Hydrogen price target
2. Market development timeline
3. Direct investments
4. Standardisation strategy and priorities
5. Research and development initiatives
6. International strategy
Demand Focus
(Transport)
1. Passenger Vehicle
Demand Focus
(Others)
1. Heating
2. Power Generation
Japan
73
South Kores
Current Hydrogen
Demand
220 KTPAFocussed
Hydrogen
Colour/
Source
Grey / Blue / Green
Policy Target
Demand
3.9 MMTPA by 2030 and 27 MMTPA by 2050
Capital Allocated
(US$)
653 million (annual targeted support for
hydrogen project)
Export/
Import Focus
Import
Demand Focus
(Industry)
NAStrategy Features
1. Hydrogen price target
2. Market development timeline
3. Direct investments
4. Other economic and financial mechanisms
5. Standardisation strategy and priorities
6. Research and development initiatives
7. International strategy
Demand Focus
(Transport)
1. Passenger Vehicle
2. Medium and Heavy Duty
3. Buses
Demand Focus
(Others)
1. Power Generation
South Korea
74
United States
Current Hydrogen
Demand
10 MMTPAFocussed
Hydrogen
Colour/
Source
Low Carbon - Blue / Green /Others
Policy Target
Demand
Not available
Capital Allocated
(US$)
> 15 billion
Export/
Import Focus
NA
Demand Focus
(Industry)
1. Refining
2. OthersStrategy Features
1. Hydrogen price target
2. Research and development initiatives
3. Other economic and financial mechanisms
4. Direct investments
Demand Focus
(Transport)
1. Passenger Vehicle
2. Medium and Heavy Duty
3. Buses
4. Aviation
Demand Focus
(Others)
1. Heating
2. Power Generation
United States
75 www.niti.gov.in | www.rmi.org /
73Harnessing Green Hydrogen
Australia
Current Hydrogen
Demand
650 KTPAFocussed
Hydrogen
Colour/
Source
Clean - Blue / Green
Policy Target
Demand
Not available
Capital Allocated
(US$)
487 million
Export/
Import Focus
Export
Demand Focus
(Industry)
1. Chemical FeedstockStrategy Features
1. Hydrogen price target
2. Market development timeline
3. Direct investments
4. Other economic and financial mechanisms
5. Legislative and regulatory measures
6. Standardisation strategy and priorities
7. Research and development initiatives
8. International strategy
Demand Focus
(Transport)
1. Medium and Heavy Duty
2. Buses
Demand Focus
(Others)
1. Heating
Chile
Current Hydrogen
Demand
58.5 KTPAFocussed
Hydrogen
Colour/
Source
Green
Policy Target
Demand
5 GW/a(2025)
25 GW/a(2025)
Capital Allocated
(US$)
50 million
Export/
Import Focus
Export
Demand Focus
(Industry)
1. Chemical Feedstock
2. RefiningStrategy Features
1. Hydrogen price target
2. Market development timeline
3. Legislative and regulatory measures
Demand Focus
(Transport)
1. Medium and Heavy Duty
2. Buses
Demand Focus
(Others)
1. Heating
Australia
76
Chile
77
Refinery
Opportunity
India’s refinery sector is the fourth largest in the world
in terms of capacity, processing almost 250 million
tonnes of crude oil yearly.
78
Currently the refinery
sector accounts for almost 3 million tonnes of hydrogen
demand, representing 46% of the total hydrogen
demand in the country.
79
The majority of this hydrogen
is generated from on-site SMR plants, which amount to
27 million tonnes of CO
2
emissions currently, which are
expected to rise to 47 million tonnes by 2050.
80
However, the refinery sector can witness a dramatic
decrease in CO
2
emissions through a higher uptake of
green hydrogen. Green hydrogen uptake in the refinery
sector is estimated to start around 2024 at a 1% share,
which can reach 24% by 2030 and 100% by 2050.
81
This
will enable close to zero CO
2
emissions from hydrogen
production by 2050 and cumulative CO
2
emissions
savings of 820 million tonnes between now and 2050.
82
Appendix B : Sectoral Demand Assessment www.niti.gov.in | www.rmi.org /
74Harnessing Green Hydrogen
Cost Implications
Currently, use of green hydrogen for desulphurization
of different kinds of fuels is more expensive than using
hydrogen produced from SMR. However, refining is unique
in that the share of hydrogen cost per tonne of crude in
refinery operating is much less (around 2%– 4%).
83
Hence,
the cost premium associated with green hydrogen in the
final refined product is not as significant as in some other
sectors like ammonia or methanol, where the share of
hydrogen cost as a percentage of total product cost can be
up to 80%–90%.
84
Refinery operating cost per tonne of crude where hydrogen
is supplied by renewables is estimated to be on parity with
hydrogen supplied through SMR by 2027.
85
However, with
the premium in the years before parity is reached being
so low (max 2% premium), this sector could be a potential
early market for green hydrogen deployment and use.
Hydrogen Demand Outlook
Hydrogen demand from the refinery sector will increase
until 2035. However, as petroleum demand starts
to decrease beyond 2035 on the account of higher
electrification of passenger and freight transport,
hydrogen demand will also start to decrease. In addition
to electrification, other efficiency improvements such
as modal shift, logistics efficiency, non-motorized
transport, and ride hailing can further reduce petroleum
and associated hydrogen demand from refineries.
Almost 100% of hydrogen demand from refineries in
2050 can be supplied via renewable electrolysis.
Exhibit 36Hydrogen demand from refinery
Source: RMI analysis
0
1
2
3
4
5
6
H2 demand (million tonnes)
FOSSIL FUEL BASED H2
GREEN H2
2020 2025 2030 2035 2045 20502040
Ammonia
Opportunity
With a growing need for fertilizer in the future, ammonia
demand is set to double in the next three decades,
increasing from 17 million tonnes in 2020 to 35 million
tonnes by 2050.
86
This directly translates to CO
2
emissions
of 40 million tonnes in 2020, increasing to 62 million tonnes
by 2050.
87
The path to decarbonization of ammonia production
involves replacing fossil fuel-based hydrogen with the
hydrogen produced from renewables. With a falling LCOE,
the cost of green hydrogen will decline, making green
ammonia competitive with conventional sources. However,
existing urea plant locations and favourable renewable
production in terms of lower costs are not aligned.
88
This
means the location of green ammonia production in the
future might shift to favourable renewable-energy-rich
states that will have considerations around transport and
storage. RTC renewable arrangement must be explored to
mitigate some of these considerations.
In the efficient scenario with a higher uptake of green
hydrogen, India can abate around 550 million tonnes of
CO
2
emissions cumulatively between 2020 and 2050.
89
Switching to green hydrogen-based ammonia also
alleviates India’s energy security concerns by reducing
natural gas imports.
Cost Implications
Currently, green ammonia costs are higher than
ammonia produced through the SMR process, even at
the higher end of natural gas prices of $12/mmBtu. This
is mainly due to high capital costs and lower utilization
of electrolysers as well as higher electricity prices.
With improvements in technology and economies of
scale, electrolyser costs will decrease dramatically
and renewable generation will get cheaper and more
abundant. This will make green hydrogen-based
ammonia fairly competitive by 2030 even at the lower
end of a natural gas price of $8/mmBtu, where green
ammonia will cost around $393/tNH
3
and grey ammonia
will cost $415/tNH
3
.
90
Transport and storage costs need
to be considered if ammonia is to be used away from
the point of production. Near-term projects that can use
on-site green hydrogen for ammonia production should
be prioritized in this decade, with a potential to move
towards deployment post 2030. www.niti.gov.in | www.rmi.org /
75Harnessing Green Hydrogen
Exhibit 37Hydrogen demand from ammonia for
fertilizer
Source: RMI analysis
0
1
2
3
4
5
7
6
H2 demand (million tonnes)
FOSSIL FUEL BASED H2
GREEN H2
2020 2025 2030 2035 20452040 2050
Methanol
Opportunity
With India’s policy push towards using coal gasification
for hydrogen production for methanol, the majority
of hydrogen will be produced with coal by 2050 in a
business-as-usual scenario. As a result, even though
emissions from methanol currently represent a very
small amount, they are bound to rise sharply, registering
the highest growth among all the industrial sectors for
the next three decades.
Hydrogen Demand Outlook
Ammonia production contributes to 48% of the current
hydrogen demand. By 2050, this demand is set to
double, representing the third largest source (21%)
of final hydrogen demand after steel and heavy-duty
trucking. The majority of this demand will be used for
ammonia production for the fertilizer industry. However,
if ammonia as fuel for the shipping industry becomes
viable, this demand will increase significantly. The share
of the hydrogen demand met with renewables will start
picking up around 2027 when green hydrogen-based
ammonia reaches cost parity with natural gas-based
ammonia, and will increase beyond that to represent
an 88% share by 2050.
However, green hydrogen can play a key role in
reducing emissions from this sector. With high uptake
of green hydrogen-based methanol production,
India can abate 150 million tonnes of CO
2
emissions
cumulatively between 2020 and 2050.
91
The majority
of these reductions will be achieved post 2040, with an
increasing share of green hydrogen-based production.
Cost Implications
India currently imports 80% of its methanol demand,
mainly because it is much cheaper than producing
methanol with imported natural gas.
92
However, coal-
based methanol production can be much more cost-
effective, given the cheap and abundant coal reserves
in India. That is one of the main reasons why India is
betting on coal-based methanol production—to drive the
percentage share of domestically produced methanol
that is cheaper. Currently, green hydrogen-based
methanol costs are much higher than the natural gas or
coal alternative. With falling costs of electrolysers and
renewable electricity, by 2030, green hydrogen-based
methanol will become cost-competitive with fossil fuel-
based alternatives. Costs in 2030 for green hydrogen-
based production could come down to $461/tonne of
methanol,
93
compared with $470/tonne for the coal-
based alternative.
94
Hydrogen Demand Outlook
Hydrogen demand for methanol will increase at a 12%
CAGR between 2020 and 2050. Currently natural gas
is used for the majority that demand. However with the
inability to compete with cheap imports and India’s push
towards coal-based methanol production, natural gas’s
share of hydrogen demand will decrease, while coal’s
share will increase. At the same time, green hydrogen’s
share will also start increasing once cost parity is
achieved. By 2050, 60% of the hydrogen demand for
methanol will be met via green hydrogen and the rest
via fossil fuels. www.niti.gov.in | www.rmi.org /
76Harnessing Green Hydrogen
Iron and Steel
Opportunity
India is currently the second largest producer and
consumer of steel, after China.
95
An abundance of iron
ore reserves and low-cost labour position India as a very
favourable market and production hub of steel. Steel is
majorly used in building various types of infrastructure,
vehicles, appliances, machinery, and equipment.
With India witnessing rapid growth in urbanization,
infrastructure buildout, economic growth, and demand
for cars and trucks in the coming decades, steel demand
is expected to increase fivefold between 2020 and 2050
(93 Mt in 2020 to 528 Mt in 2050).
96
India uses all three processes (BF-BOF—44%, DRI-EAF/IF—
34%, and EAF/IF with scrap steel—22%
97
) to make steel.
Currently, emissions from steel production account for
a significant share—11% of total CO
2
emissions and 45%
of industrial CO
2
emissions in India.
98
With increasing
demand for steel and use of carbon-intensive processes
and rising exports, emissions from the steel sector in
India will rise from 269 million tonnes in 2020 to 951
million tonnes by 2050.
99
It is imperative to reduce emissions from the steel
sector in India, given the increasing demand and the
associated increasing emissions. Hydrogen can play a
Exhibit 38Hydrogen demand from methanol
Source: RMI analysis
0.0
0.5
1.0
1.5
2.0
2.5
H2 demand (million tonnes)
FOSSIL FUEL BASED H2
GREEN H2
2045 2050203020402020 20252035
key role. Instead of the coal or natural gas-based DRI
process, hydrogen produced via renewables can be used
as a reductant to convert iron ore pellets to pig iron. This
process only leads to water as a by-product and creates no
emissions. It’s important that the EAF process is supplied
with renewable electricity, which will lead to further
emissions reductions.
Using green steel can help India abate 1.4 giga tonnes of
cumulative CO
2
emissions between 2020 and 2050.
100
Green steel will account for 20% of total steel demand
and can substitute 98% of natural gas-based DRI steel
demand by 2050.
101
Steel has other potential pathways
for emissions reductions complementary to the green
hydrogen pathway, these are:
102
1) improving the energy
efficiency of existing furnaces and equipment, and
2) switching to a smelting reduction process combined
with CCS, which eliminates the need for a blast furnace.
India can become a very strong market for domestic
manufacturing and exports. Green steel exports will
increase on account of more infrastructure buildout
and the growth of automotive markets, allowing India
to position itself as a global leader in green steel
manufacturing.
Cost Implications
Currently, the conventional process of making steel and
the one most predominant in India, BF-BOF and coal-
based DRI process respectively, are much cheaper than
the hydrogen-based alternative. This is mainly because
of the low cost of fuel for the conventional options. Both
BF-BOF and the coal based DRI process use coking coal
and non-coking coal respectively, which is much cheaper
than natural gas or green hydrogen.
However, with the falling costs of renewables, hydrogen-
based steel can reach cost parity with the natural gas-
based DRI process by 2027, with costs of green steel
around $460/tonne of steel.
103
By 2030, steel produced
via the green hydrogen-based DRI process will be the
most cost-competitive route, with costs around $411/
tonne of steel, compared with $443/tonne for BF-BOF
and $459/tonne for DRI-EAF.
104 www.niti.gov.in | www.rmi.org /
77Harnessing Green Hydrogen
Hydrogen Demand Outlook
Steel production via natural gas-based DRI-EAF
contributes to 0.3 million tonnes of hydrogen demand
currently. That is bound to rise to 8 million tonnes by
2050.
Green hydrogen demand from steel production will start
taking shape around 2030 and increase slowly until
2035 when pilot projects are deployed. The demand is
expected to rise sharply beyond that when there is full-
Exhibit 39Hydrogen demand from steel in India
Source: RMI analysis
0
1
2
3
4
5
6
H2 demand (million tonnes)
FOSSIL FUEL BASED H2
GREEN H2
7
8
2050202020452040203520302025
scale deployment. Steel will contribute to 27% of final
hydrogen demand in 2050, the highest demand among
all the potential sectors.
Long-Haul, Heavy-Duty Road Freight
Opportunity
Freight transport is critical to India’s growing economy,
providing citizens with goods, helping grow businesses,
and improving quality of life. Road freight is an essential
pillar of the overall freight transport sector, contributing
to 71% of freight movement and 95% of freight-related
CO
2
emissions.
105
Emissions from the road freight sector
will increase fourfold between now and 2050 (188 Mt CO
2
in 2020 to 797 Mt CO
2
in 2050) in a business-as-usual
scenario.
106
Moreover, the cost of logistics as a share of
GDP is 14% in India, much higher than in the European
Union or the United States.
107
Although heavy-duty vehicles (HDVs) represent only 20%
of total freight vehicles on the road, they are the biggest
contributor towards India’s road freight movement, hauling
over 74% of road freight.
108
They are also the biggest
emitter, producing 60% of road-freight CO
2
emissions,
which is expected to increase to 66% by 2050.
109
Electrification of HDVs can help reduce shipping and
logistics costs, improve air quality, and reduce carbon
emissions. Between 2020 and 2050, India can abate
2 giga tonnes of CO
2
emissions (0.7 giga tonnes from
fuel cell electric trucks and 1.3 giga tonnes from battery
electric trucks) and save $208 billion on oil import bills
by transitioning to electric.
Two technology options exist to electrify HDVs—battery
electric vehicles (BEVs) and fuel cell electric vehicles
(FCEVs). Hydrogen-powered FCEVs offer key advantages
and make a strong candidate to play a part in road
freight HDV decarbonization, along with BEVs. In the
near term, retrofitting existing diesel trucks with fuel
cell applications could also be pursued.
Cost Implications
Currently, both BEVs and FCEVs are more expensive than
diesel trucks on a total-cost-of-ownership basis. The major
drivers behind that are the higher capital cost of EVs,
higher interest rates charged, and costs associated with
battery packs and fuel cell stacks. However, declining
battery and fuel cell prices due to production scale-up
and technology improvements (between 2019 and 2030,
battery and fuel cell prices are expected to fall by 64
percent and 61 percent respectively
110
), improved charging,
and hydrogen refuelling station utilization, BEVs and
FCEVs will be at cost parity with diesel trucks by 2027 and
2031 respectively.
111
A stronger policy push towards HDV
electrification can bring the cost parity even sooner.
Hydrogen Demand Outlook
Currently, hydrogen demand for the transport sector is
almost nonexistent, as no FCEVs exist on the market in
India. However, in the efficient scenario, if HDV FCEVs
sales penetration start to pick up around 2026, and
reaches about 30% by 2050, the hydrogen and fuel
cell system demand could increase, reaching 6.4 million
tonnes and 16 GW, respectively, by 2050. In such a
scenario, HDVs could amount to 22% of final hydrogen
demand in India by 2050, and the cumulative market www.niti.gov.in | www.rmi.org /
78Harnessing Green Hydrogen
Exhibit 40Hydrogen demand from HDVs in the
efficient scenario in India
Source: RMI analysis
size for fuel cells between 2020 and 2050 could be USD
40–54 billion (INR 3-4 lakh crore).
112
Such rapid growth
signifies the opportunity for domestic manufacturing of
FCEVs and fuel cell system components in India.
Power
Opportunity
The power sector in India is underdoing dramatic
transition led by electrification, demand growth, and
a large increase in renewable energy generation. High
demand growth and renewable generation opens up the
challenges and prospect of demand flexibility and VRE
integration. Technical solutions like demand response,
battery energy storage, and supply-side flexibility of
thermal power plants are increasingly being touted as
part of the suite of solutions.
Hydrogen advocates have proposed the concept of
power-H2-power as another form to provide storage
and flexibility to the grid, opening an end-use sector
for hydrogen. Power-H2-power involves generating
hydrogen in times of excess generation, storing it either
physically or chemically (e.g., ammonia), and then at
time of need, discharging it either through gas turbines
(OCGT or CCGT) or fuel cells.
In contrast to technologies such as Li-ion batteries, the
per unit costs of power-H2-power grow more slowly
with a decreasing utilization factor. It is this relationship
between per unit costs and utilization factor that makes
power-H2-power among the most promising options
for long-term storage (alongside other potential long-
term chemical storage vectors, like ammonia).
113
Beyond
providing flexibility, hydrogen is also seen as a potential
fuel source for peaking power generation through
existing gas turbines, and for power generation and
back-up applications for distributed assets like cell-phone
towers and replacement of diesel gensets.
Cost Implications and Demand Considerations
Hydrogen’s usefulness for power, however, has its share
of general costs. First, the conversion losses and round-
trip efficiency of generation storage and consumption
of hydrogen in a power-H2-power process is substantial
enough to warrant a rethink of the usefulness for
hydrogen especially when compared with other storage
technologies. Round-trip conversion efficiency for
current technologies may be in the order of 33%,
increasing potentially to slightly less than 50% with
technological improvements. Thus, converting electricity
into hydrogen, or a similar chemical energy carrier
like ammonia, is an inefficient process with substantial
energy losses across the conversion chain.
114
Secondly,
without cost reduction expectations being met, capital
costs for both electrolysers and fuel cells remains
substantially high.
In the Indian power sector, the opportunity of hydrogen
is further limited. Considering only the use case for
peaking power, it is only economical at margin when
prices are where they are expected to be in 2050. By
that time, there are a fair degree of technical and non-
technical unknowns. Carbon pricing can theoretically
alter the economics of hydrogen. However, even then,
the challenge of supply, transport, and storage will
possibly increase the cost of using hydrogen purely for
meeting peaking power needs in India.
When it comes to the end use of hydrogen for power-
H2-power applications, especially for seasonal storage,
the unique load structure and renewable profile hinders
the potential for hydrogen. Unlike countries in higher
H2 demand (million tonnes)
0
1
2
3
4
5
7
6
2020 2025 20302040 2045
20352050
CAGR = 31% www.niti.gov.in | www.rmi.org /
79Harnessing Green Hydrogen
Exhibit 41Economics of battery energy storage and power-H2-power
Source: TERI
115
0%
5%
10%
15%
20%
0% 20% 40% 60% 80% 100%
Dispatch from Storage
(% of total load)
Wind and Solar Generation
(% of total generation)
2020 Costs
0%
5%
10%
15%
20%
0% 20% 40% 60% 80% 100%
Dispatch from Storage
(% of total load)
Wind and Solar Generation
(% of total generation)
2050 Costs
DISPATCH FROM H2 STORAGE DISPATCH FROM BATTERY STORAGE
latitudes with large winter heating loads, India’s level
of seasonal variation is limited, except in certain
geographies in north India. The unknown here is how
that might change with higher cooling penetration. But
even then, India’s most cost-effective renewable source
is solar, which requires mostly intraday and non inter-
seasonal balancing. Within this context, TERI’s analysis
shows that power-H2-power is only required at very high
penetrations of VRE (above 80%). Battery storage is
dispatched long before hydrogen gets a chance to be a
part of the power balancing mix.
A key conclusion is that hydrogen and other seasonal
storage options are only going to be necessary to
squeeze out the last 10%–20% of dispatchable fossil
generation during the transition to a very high VRE
system. IEA’s generation outlook estimates VRE to
account for at most 69% by 2040 in its sustainable
development scenario. Therefore, the prospect for
power-H2-power in India is going to be visible only at
the tail end of our scenario period and that too only
marginal with limited impact. www.niti.gov.in | www.rmi.org /
80Harnessing Green Hydrogen
Appendix C: Definitions
i. Hydrogen causes corrosion and brittleness when
it comes into contact with some metals, requiring
new coatings and other protective measures.
ii. Cryo-compressed hydrogen storage refers to the
storage of hydrogen at cryogenic temperatures
in a vessel that can be pressurized (nominally to
250-350 atm), in contrast to current cryogenic
vessels that store liquid hydrogen at near-ambient
pressures (Argonne National Laboratory, 2014).
iii. All monetary units in the report are listed in
US dollars.
iv. The Hydrogen Council's Net-Zero analysis puts
potential hydrogen demand 690 million tonnes by
2050, with total required investment to be around
$7-8 trillion.
v. Alternate route of hydrogen production like
bio-hydrogen are not addressed in the report.
While limited in production potential, bio-hydrogen
from agricultural waste could have locally
synergistic advantage for distributed generation
where resources and end consumers are readily
available. Potential for bio-hydrogen should be
further explored. www.niti.gov.in | www.rmi.org /
81Harnessing Green Hydrogen
Endnotes
1. Energy Technology Perspectives (ETP) 2020
International Energy Agency, September 2020
https://www.iea.org/reports/energy-technology-
perspectives-2020
2. Tegler, M. Hydrogen Roadmaps Under Development
Have Doubled This Year. Bloomberg New Energy
Finance, August 12, 2021
https://www.bnef.com/shorts/12191
3. Roy, A.“India to meet climate goals, be green
hydrogen hub: Modi on Independence Day,”
Hindustan Times, August 15, 2021
https://www.hindustantimes.com/india-news/
independence-day-2021-hydrogen-energy-hub-solar-
energy-india-climate-goals-modi-101629012924744.html
4. RMI Analysis based on IEA data in Energy
Technology Perspectives, 2020
5. RMI Analysis
6. Ibid
7. Ibid
8.
Singh, S.,“Budget 2021-22 : Major focus on energy
transition, traditional reform areas, Energyworld.
February 1, 2021
https://energy.economictimes.indiatimes.
com/news/renewable/budget-2021-22-
major-focus-on-energy-transition-traditional-
reformareas/80627087#:~:text=Sha%20also%20
said%20a%20National,population%20of%20
over%201%20million.
9. Energy Sector Management Assistance Program.
Green Hydrogen in Developing Countries.
World Bank, 2020
https://openknowledge.worldbank.org/
handle/10986/34398
10. Storage and Transport. eniscuola, February 2011
http://www.eniscuola.net/wp-content/uploads/2011/02/
pdf_hydrogen_2.pdf
11. Ibid
12. Dias, V., Pochet, M., Contino, F., & Jeanmart, H.
Energy and Economic Costs of Chemical Storage
Frontiers in Mechanical Engineering, May 29, 2020
https://www.frontiersin.org/articles/10.3389/
fmech.2020.00021/full
13. Tegler, M., Hydrogen Roadmaps , BNEF
https://www.bnef.com/shorts/12191
14. Energy Technology Perspectives (ETP) 2020
International Energy Agency
https://www.iea.org/reports/energy-technology-
perspectives-2020
15. Hydrogen On The Horizon: Ready, Almost Set, Go?
World Energy Council
https://www.worldenergy.org/assets/downloads/
Innovation_Insights_Briefing_-_Hydrogen_on_the_
Horizon_-_Ready%2C_Almost_Set%2C_Go_-_
July_2021.pdf
16. Albrecht, U., Bünger, U., Michalski, J., Raksha, T.,
Wurster, R., & Zerhusen, J. International Hydrogen
Studies World Energy Council, September 2020
https://www.weltenergierat.de/wp-content/
uploads/2020/10/WEC_H2_Strategies_finalreport.pdf
17. 2H 2021 Hydrogen Market Outlook
Bloomberg New Energy Finance, August 2021
https://www.bnef.com/insights/26977
18. The Future of Hydrogen: Seizing today’s opportunities
IEA, June 2019
https://www.iea.org/reports/the-future-of-hydrogen
19. Ibid; and 2H 2021 Hydrogen Market Outlook
Bloomberg New Energy Finance
https://www.bnef.com/insights/26977
20. Green Hydrogen Cost Reduction: Scaling Up
Electrolysers To Meet The 1.5
°
C Climate Goal www.niti.gov.in | www.rmi.org /
82Harnessing Green Hydrogen
InternationalRenewable Energy Agency,
December 2020
https://irena.org/-/media/Files/IRENA/Agency/
Publication/2020/Dec/IRENA_Green_hydrogen_
cost_2020.pdf
21. Energy Technology Perspectives (ETP) 2020
International Energy Agency
https://www.iea.org/reports/energy-technology-
perspectives-2020
22. The Future of Hydrogen, IEA
https://www.iea.org/reports/the-future-of-hydrogen
23. Energy Technology Perspectives (ETP) 2020, IEA
https://www.iea.org/reports/energy-technology-
perspectives-2020
Net Zero by 2050 - A Roadmap for the Global
Energy Sector, IEA, 2021
https://www.iea.org/reports/net-zero-by-2050
Hydrogen for Net-Zero - A critical cost-competitive
energy vector, Hydrogen Council, 2021
https://hydrogencouncil.com/wp-content/
uploads/2021/11/Hydrogen-for-Net-Zero_Full-
Report.pdf
24. Ibid.
25. 2H 2021 Hydrogen Market Outlook, BNEF
https://www.bnef.com/insights/26977
26. Ibid.
27. Smil, V., Energy Systems: Transition and Innovation
Innovation Agora, September 2019
https://www.youtube.com/watch?v=szikg74kgnM
28. Waiver of inter-state transmission charges on
transmission of the electricity generated from solar
and wind sources of energy
Ministry of Power, June 2021
https://powermin.gov.in/sites/default/files/webform/
notices/Waiver_of_inter_state_transmission_charges_
Order_dated_21_June_2021.pdf
29. Hall, W., Spencer, T., Renjith, G., & Dayal, S.,
The
Potential Role of Hydrogen in India-A pathway for
scaling-uplow carbon hydrogen across the economy
The Energy and Resource Institute (TERI), 2020
https://www.teriin.org/sites/default/files/2020-12/
Report%20on%20The%20Potential%20
Role%20of%20Hydrogen%20in%20India%20
%E2%80%93%20%27Harnessing%20the%20
Hype%27.pdf
30. REFHYNE Clean Refinery Hydrogen for Europe,
REFHYNE
https://refhyne.eu/;
Shell Rheinland Refinery Update
ITM Power, June 2019
https://www.itm-power.com/news/shell-rheinland-
refinery-update
31. RMI Analysis
32. Anhydrous Ammonia, Minnesota Department of
Agriculture, https://www.mda.state.mn.us/pesticide-
fertilizer/anhydrous-ammonia
33. Fertilizer Fact Sheet: Ammonia, The Fertilizer
Institute, RMI https://www.tfi.org/sites/default/files/
documents/ammoniafactsheet.pdf
34. Tullo, A. H, Yara plans to make green ammonia in
Norway. C&EN, September 2020
https://cen.acs.org/business/petrochemicals/Yara-
plans-make-green-ammonia/98/web/2020/12
'Green' ammonia is the key to meeting the twin
challenges of the 21
st
century
Siemens-Energy
https://www.siemens-energy.com/uk/en/offerings-
uk/green-ammonia.html
Brown, T, Green ammonia in Australia, Spain, and
the United States
Ammonia Energy Association, October 2020
https://www.ammoniaenergy.org/articles/green-
ammonia-in-australia-spain-and-the-united-states/
35. Projects, Carbon Cycling International: https://www.
carbonrecycling.is/projects; and North-C-Methanol,
North CCU Hub: https://northccuhub.eu/north-c-
methanol/
36. möjlighet!, Hybrit,
https://www.hybritdevelopment.se/ www.niti.gov.in | www.rmi.org /
83Harnessing Green Hydrogen
ArcelorMittal Europe to produce ’green steel’
starting in 2020, ArcelorMittal, October 2020,
https://corporate.arcelormittal.com/media/news-
articles/arcelormittal-europe-to-produce-green-
steel-starting-in-2020
IGAR: reforming carbon to reduce iron ore,
ArcelorMittal, https://storagearcelormittalprod.blob.
core.windows.net/media/lukmokpc/igar-content-
final.pdf
37. Initial IMO GHG Strategy
International Maritime Organization
https://www.imo.org/en/MediaCentre/HotTopics/
Pages/Reducing-greenhouse-gas-emissions-from-
ships.aspx;
Ammonia Energy Association
https://www.ammoniaenergy.org/;
Clean Skies forTomorrow: Sustainable Aviation
World Economic Forum and McKinsey & Company, 2020
https://www3.weforum.org/docs/WEF_Clean_Skies_
for_Tomorrow_Sustainable_Aviation_Fuel_Policy_
Toolkit_2021.pdf
38. Department of Fertilizer
Ministry of Chemicals and Fertilizers(MoC&F)
39. McDonald, Z
Injecting hydrogen in natural gas grids could provide
steady demand the sector needs to develop
S&P Global, May 9, 2020
https://www.spglobal.com/platts/en/market-
insights/blogs/natural-gas/051920-injecting-
hydrogen-in-natural-gas-grids-could-provide-steady-
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40. Industrial cluster policy, European Commission
https://ec.europa.eu/growth/industry/policy/
cluster_en
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Industrial clusters are critical to getting to net-zero.
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https://www.weforum.org/agenda/2020/10/industrial-
clusters-can-be-a-key-lever-for-decarbonization-heres-
why/
NortH2, NortH2,
https://www.north2.eu/en
41. CEEW Analysis
42. Hall, W., Spencer, T., Renjith, G., & Dayal, S.,
The Potential Role of Hydrogen in India - A pathway for
scaling-up low carbon hydrogen across the economy
The Energy and Resource Institute (TERI), 2020
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Report%20on%20The%20Potential%20
Role%20of%20Hydrogen%20in%20India%20
%E2%80%93%20%27Harnessing%20the%20
Hype%27.pdf
43. Indian Oil to build India's first green hydrogen plant
at Mathura refinery. Indian Oil, July 2021
https://iocl.com/NewsDetails/59274
NTPC invites tender to set up India’s first Green
Hydrogen Fuelling Station in Leh. NTPC, July 2021
https://www.ntpc.co.in/en/media/press-releases/
details/ntpc-invites-tender-set-india’s-first-green-
hydrogen-fuelling-station-leh
44. Green Hydrogen Cost Reduction: Scaling Up
Electrolysers To Meet The 1.5
°
C Climate Goal
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https://irena.org/-/media/Files/IRENA/Agency/
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cost_2020.pdf
45. RMI Interview, Electrolyser manufacturing in India
Ohmium, November, 2020.
46. India as a major country of the world with appropriate
technology, capital including FDI and extraordinary
human resource contributing significantly to the
global economy : RaviShankar Prasad
Ministry of Electronics & IT,June 2, 2020
https://pib.gov.in/PressReleasePage.aspx?
PRID=1628583 www.niti.gov.in | www.rmi.org /
84Harnessing Green Hydrogen
47. Cabinet approves PLI Scheme to 10 key Sectors for
Enhancing India’s Manufacturing Capabilities and
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48. Report on hydrogen storage and applications other
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https://static.pib.gov.in/WriteReadData/userfiles/
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49. Communication from the commission to the
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economic and social committee and the committee
of the regions-a hydrogen strategy for a climate-
neutral Europe, European Commission, 2020
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hydrogen_strategy.pdf
50. Green Hydrogen Catapult - World’s green hydrogen
leaders unite to drive 50-fold scale-up in six years
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https://racetozero.unfccc.int/green-hydrogen-
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51. Fueling the Future of Mobility - Hydrogen and fuel
cell solutions for transportation
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cn/Documents/finance/deloitte-cn-fueling-the-
future-of-mobility-en-200101.pdf
Path to Hydrogen Competitiveness - A Cost
Perspective, Hydrogen Council,January 20, 2020
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52. Hydrogen Economy Outlook, BNEF, May 2020
https://www.bnef.com/insights/22971
53. About HESC, Hydrogen Energy Supply Chain Project
https://www.hydrogenenergysupplychain.com/
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54. Hydrogen Economy Outlook, BNEF, May 2020
https://www.bnef.com/insights/22971
55. McDonald, Z, Hydrogen transport moving molecules
a core challenge for H2 market growth
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https://www.spglobal.com/en/research-
insights/articles/hydrogen-transport-moving-
molecules-a-core-challenge-for-h2-market-
growth#:~:text=Hydrogen%20
56. Tegler, M. Hydrogen Roadmaps Under Development
Have Doubled This Year, BNEF, August 12, 2021
https://www.bnef.com/shorts/12191
57. Green shift to create 1 billion tonne ‘green ammonia’
market? Argus Media, June, 2020
https://view.argusmedia.com/rs/584-BUW-606/
images/Argus%20White%20Paper%20-%20
Green%20Ammonia.pdf
58. Japan targets 3mn t/yr of ammonia fuel use by
2030, Argus Media, February 8, 2021
https://www.argusmedia.com/en/news/2184741-
japan-targets-3mn-tyr-of-ammonia-fuel-use-
by-2030
59. Green shift to create 1 billion tonne ‘green ammonia’
market? Argus Media, June, 2020
https://view.argusmedia.com/rs/584-BUW-606/
images/Argus%20White%20Paper%20-%20
Green%20Ammonia.pdf www.niti.gov.in | www.rmi.org /
85Harnessing Green Hydrogen
60. Gerres, T., Lehne, J., Mete, G., Schenk, S., & Swalec, C
Green steel production: how G7 countries can help
change the global landscape, Leadit, June, 2021
https://www.industrytransition.org/content/
uploads/2021/06/g7-green-steel-tracker-policy-brief.
pdf
61. Ibid
62. H2 Green Steel completes strong USD 105 million
initial funding round to accelerate the transition into
fossil-free steel making. Innoenergy, May 25, 2021
https://www.innoenergy.com/news-events/h2-
green-steel-completes-strong-usd-105-million-initial-
funding-round-to-accelerate-the-transition-into-
fossil-free-steel-making/
63. Tata Steel plans to go 'green' in UK with electric
arc furnaces: Report, Business Standard, Business
Standard, July 19, 2020
https://www.business-standard.com/article/
companies/tata-steel-plans-to-go-green-in-uk-with-
electric-arc-furnaces-report-120071900773_1.html
64. Blank, T. K The Disruptive Potential of Green Steel
RMI 2019
https://rmi.org/insight/the-disruptive-potential-of-
green-steel/
65. Hoffmann, C., Hoey, M. V., & Zeumer, B
Decarbonization challenge for steel
McKinsey & Company, June 3, 2020
https://www.mckinsey.com/industries/metals-and-
mining/our-insights/decarbonization-challenge-for-
steel
66. 2020 World Steel in Figures
World Steel Association, 2020
https://worldsteel.org/wp-content/uploads/2020-
World-Steel-in-Figures.pdf
67. Blank, T. K, The Disruptive Potential of Green Steel
RMI, 2019
https://rmi.org/insight/the-disruptive-potential-of-
green-steel
68. Mann, W., Meisel, J., Bodnar, P., & Granoff, I.
Recasting the Golden Key, RMI, 2020
https://rmi.org/insight/recasting-the-golden-key
Energy Technology Perspective (ETP) 2020
International Energy Agency (IEA), September, 2020
https://www.iea.org/reports/energy-technology-
perspectives-2020
Hall, W., Spencer, T., Renjith, G., & Dayal, S.,
The Potential Role of Hydrogen in India - A pathway for
scaling-up low carbon hydrogen across the economy,
The Energy and Resource Institute (TERI), 2020
https://www.teriin.org/sites/default/files/2020-12/
Report%20on%20The%20Potential%20
Role%20of%20Hydrogen%20in%20India%20
%E2%80%93%20%27Harnessing%20the%20
Hype%27.pdf
About Hydrogen, HydrogenOne Capital
https://hydrogenonecapitalgrowthplc.com/about/
about-hydrogen/
Hydrogen from Renewable Power- Technology
Outlook for the Energy Transition, International
Renewable Energy Agency(IRENA), 2018
https://www.irena.org/-/media/Files/IRENA/Agency/
Publication/2018/Sep/IRENA_Hydrogen_from_
renewable_power_2018.pdf
69. Singh, S, Budget 2021-22 : Major focus on energy
transition, traditional reform areas
ET Energyworld, February 1, 2021
https://energy.economictimes.indiatimes.
com/news/renewable/budget-2021-22-major-
focus-on-energy-transition-traditional-reform-
areas/80627087#:~:text=Sha%20also%20said%20
a%20National,population%20of%20over%201%20
million
70. RMI Analysis
71. Communication from the commission to the
European parliament, the council, the European
economic and social committee and the committee
of the regions- a hydrogen strategy for a climate-
neutral Europe. European Commission, 2020
https://ec.europa.eu/energy/sites/ener/files/
hydrogen_strategy.pdf
72. The National Hydrogen Strategy, Federal Ministry for
Economic Affairs and Energy, June 2020 www.niti.gov.in | www.rmi.org /
86Harnessing Green Hydrogen
https://www.bmwi.de/Redaktion/EN/Publikationen/
Energie/the-national-hydrogen-strategy.html
73. The Strategic Road Map for Hydrogen and Fuel Cells
METI, 2019
https://www.meti.go.jp/english/press/2019/
pdf/0312_002a.pdf
Japan: Strategic Hydrogen Roadmap, Ministry of
Foreign Affairs and Trade, October 30, 2020
https://www.mfat.govt.nz/assets/Trade-General/
Trade-Market-reports/Japan-Strategic-Hydrogen-
Roadmap-30-October-2020-PDF.pdf
74. Ha, J. E, Hydrogen Economy Plan in Korea,
Netherlands Enterprise Agency, January 18, 2019
https://www.rvo.nl/sites/default/files/2019/03/
Hydrogen-economy-plan-in-Korea.pdf
Hydrogen Economy Roadmap of Korea, Ministry of
Trade Industry and Energy,
https://docs.wixstatic.com/ugd/45185a_
fc2f37727595437590891a3c7ca0d025.pdf
Lim. D., Lee. J. S., Korea sees tenfold rise in
hydrogen fuel use by 2030,
The Korea Economic
Daily, October 7, 2021,
https://www.kedglobal.com/newsView/
ked202110070016
75. Roadmap to US Hydrogen Economy,
Cell and Hydrogen Energy Association, 2020
https://static1.squarespace.com/
static/53ab1feee4b0bef0179a1563/t/5e7ca9d6c8fb
3629d399fe0c/1585228263363/Road+Map+to+a+
US+Hydrogen+Economy+Full+Report.pdf
76. Bruce S, T. M,
National Hydrogen Roadmap, CSIRO, 2018
https://www.csiro.au/en/work-with-us/services/
consultancy-strategic-advice-services/csiro-futures/
futures-reports/hydrogen-roadmap
77. National Green Hydrogen Stretgy
Ministeri de Energia, 2020
https://energia.gob.cl/sites/default/files/national_
green_hydrogen_strategy_-_chile.pdf
78. Petroleum Planning and Analysis Cell (2019 data) and TERI
79. RMI Analysis
80. RMI Analysis
81. Ibid
82. Ibid
83. BCG Analysis
84. RMI Analysis
85. RMI Analysis
86. RMI Analysis
87. Ibid
88. CEEW Analysis
89. RMI Analysis
90. RMI Analysis
91. Ibid
92. Hall, W., Spencer, T., Renjith, G., & Dayal, S.
The Potential Role of Hydrogen in India - A pathway for
scaling-uplow carbon hydrogen across the economy
The Energy and Resource Institute (TERI), 2020
https://www.teriin.org/sites/default/files/2020-12/
Report%20on%20The%20Potential%20
Role%20of%20Hydrogen%20in%20India%20
%E2%80%93%20%27Harnessing%20the%20
Hype%27.pdf
93. RMI Analysis
94. CEEW Analysis
95. World Steel Association (2020)
2020 World Steel in Figures
Retrieved from World Steel Association
https://worldsteel.org/wp-content/uploads/2020-
World-Steel-in-Figures.pdf
96. RMI Analysis www.niti.gov.in | www.rmi.org /
87Harnessing Green Hydrogen
97. RMI Analysis based on data from TERI and World
Steel Association
98. RMI Analysis
99. RMI Analysis
100. RMI Analysis
101. TERI Analysis
102. Hall, W., Spencer, T., Renjith, G., & Dayal, S. The
Potential Role of Hydrogen in India- A pathway for
scaling-up low carbon hydrogen across the economy
The Energy and Resource Institute (TERI), 2020
https://www.teriin.org/sites/default/files/2020-12/
Report%20on%20The%20Potential%20
Role%20of%20Hydrogen%20in%20India%20
%E2%80%93%20%27Harnessing%20the%20
Hype%27.pdf
Decarbonization Challenge for Steel
Mckinsey & Company, 2020
https://www.mckinsey.com/industries/metals-and-
mining/our-insights/decarbonization-challenge-for-
steel
103. RMI Analysis
104. RMI Analysis
105. RMI Analysis
106. RMI Analysis
107. Press Release on National Logistics Policy
Ministry of Commerce and Industry, 2020
https://commerce.gov.in/press-releases/
national-logisticspolicy-will-be-released-soon-
policy-to-create-a-single-window-e-logistics-
market-will-generate-employment-and-make-
msmes-competitive-nirmala-sitharaman/
108. RMI Analysis
109. Ibid
110. Electric Vehicle Outlook 2020, BNEF, 2020
https://about.bnef.com/electric-vehicle-
outlook
Fueling the Future of Mobility-Hydrogen and
fuel cell solutions for transportation, Deloitte,
Ballard, 2020
https://www.bmwi.de/Redaktion/EN/
Publikationen/Energie/the-national-hydrogen-
strategy.html
111. RMI Analysis
112. RMI Analysis
113. Hall, W., Spencer, T., Renjith, G., & Dayal, S. The
Potential Role of Hydrogen in India-A pathway
for scaling-up low carbon hydrogen across the
economy
The Energy and Resource Institute (TERI), 2020
https://www.teriin.org/sites/default/
files/2021-07/Report_on_The_Potential_Role_
of_%20Hydrogen_in_India.pdf
114. Ibid
115. Ibid
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Fuel cell
Low Carbon
Products
Electrolyser
Ammonia
Report /
June 2022
Harnessing
GREEN HYDROGEN
OPPORTUNITIES FOR DEEP DECARBONISATION IN INDIA Authors
Kowtham Raj, NITI Aayog
Pranav Lakhina, RMI
Clay Stranger, RMI
Leadership
The team is grateful for the mentorship and inputs provided by:
Amitabh Kant, NITI Aayog
Dr. Rakesh Sarwal, NITI Aayog
Rajnath Ram, NITI Aayog
Manoj Kumar Upadhyay, NITI Aayog
Contacts
For more information, contact: rajnath-pc@gov.in / info@rmi.org
Acknowledgments
The team is grateful for the input and contributions received:
Thomas Koch Blank, RMI
Patrick Molloy, RMI
Emily Beagle, RMI
Akshima Ghate, RMI India
Jagabanta Ningthoujam, RMI India
Arjun Gupta, RMI India
Isha Kulkarni, RMI India
Nikunj Deep Singh, NITI Aayog
We would also like to thank the following organizations who provided valuable inputs that shaped
the contour of the report:
Ministry of Power (MoP)
The Energy and Resources Institute (TERI)
Council on Energy, Environment and Water (CEEW)
Boston Consulting Group (BCG)
Engineers India Limited (EIL)
Copyrights and Citation
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RMI: https://rmi.org/insight/harnessing-green-hydrogen/
RMI values collaboration and aims to accelerate the energy transitiowork through the Creative
Commons CC BY-SA 4.0 license. https://creativecommons.org/licenses/by-sa/4.0/
All images used are from iStock.com and shutterstock unless otherwise noted.
Cover page desiged by: YAAP. Report design by: Ants at work
Authors & Acknowledgments
www.niti.gov.in | www.rmi.org /
3Harnessing Green Hydrogen About Us
About RMI
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°
C future and secure a clean, prosperous, zero-
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supporting India’s mobility and energy transformation since 2016.
About NITI Aayog
The National Institution for Transforming India (NITI Aayog) was formed via a resolution of the
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of India, providing both directional and policy inputs. While designing strategic and long-term
policies and programmes for the Government of India, NITI Aayog also provides relevant technical
advice to the Centre and States. The Government of India, in keeping with its reform agenda,
constituted the NITI Aayog to replace the Planning Commission instituted in 1950. This was done in
order to better serve the needs and aspirations of the people of India. An important evolutionary
change from the past, NITI Aayog acts as the quintessential platform of the Government of India
to bring States to act together in national interest, and thereby fosters Cooperative Federalism.
www.niti.gov.in | www.rmi.org /
4Harnessing Green Hydrogen Table of Contents
Foreword
Preface
Executive Summary
Towards a National Action Plan on Green Hydrogen
Introduction
Hydrogen fundamentals
Production
Transportation and Storage
Emerging Importance of Hydrogen
Global Hydrogen Supply and Demand—Where Is Hydrogen Now and Where Is It Heading?
What Could Hydrogen Mean for India?
The Future of Hydrogen in India
Green Hydrogen Production in India
Demand Prospect for Hydrogen in India
The Potential for Green Hydrogen
Near-Term Market Development
Manufacturing Opportunities
India’s Electrolyser Demand
Technology Review and Implications for India
Encouraging Electrolyser Manufacturing
A Production-Linked Incentive Scheme for Electrolysers
Research and Development Program
Export Opportunities
Hydrogen Export Opportunities
Green Hydrogen-Embedded Low-Carbon Products
Key Takeaway
Steps to make India a global hub of green hydrogen
Conclusion
Appendices
Appendix A: Global Examples of Hydrogen Strategies and Roadmap
Appendix B: Sectoral Demand Assessment
Endnotes
www.niti.gov.in | www.rmi.org /
5Harnessing Green Hydrogen
05
09
11
16
26
44
52
60
68
70
80 Foreword
www.niti.gov.in | www.rmi.org /
6Harnessing Green Hydrogen
The publication of this report cannot come at a more opportune
time as the urgency to take aggressive action to fight climate
change has never been greater. The COP26 conference in Glasgow
signalled India’s willingness to show leadership in fighting climate
change. Prime Minister Narendra Modi put forth India’s vision to
achieve net zero by 2070, in addition to achieving aggressive near-
term targets such as 500 GW of renewables capacity, 50 percent
of requirements to be met with renewables, one billion tonne
reduction in cumulative emissions by 2030, and 45 percent lower
emissions intensity of gross domestic product (GDP) by 2030.
Addressing the nation on the 75
th
Independence Day, Prime
Minister Narendra Modi announced the National Hydrogen Mission
with an aim of making India a hub for the production and export of
green hydrogen. This is geared to make India energy independent
before the country completes 100 years of its independence in
2047. Currently, India spends over $160 billion of foreign exchange
every year for energy imports. These imports are likely to double
in the next 15 years without remedial action. This report intends to
highlight the unique ecosystem advantages India has and how the
stage is set for the country to become a global champion in green
hydrogen. The report works towards a hydrogen strategy that is
designed to construct a high-tech and low-carbon Indian brand.
If right steps are taken, the following targets can be achieved
by India:
1. The world’s largest electrolysis (green hydrogen generation)
capacity of over 60 GW/5 million tonnes by 2030 for
domestic consumption. This will help India meet the 500 GW
renewable energy target.
2. The world’s largest production of green steel at 15-20million
tonnes by 2030 — a pioneering effort to make green steel
mainstream for the world. www.niti.gov.in | www.rmi.org /
7Harnessing Green Hydrogen
3. The world’s largest electrolyser annual manufacturing
capacity of 25 GW by 2028 delivering affordable ones
for India and the world.
4. The world’s largest production of green ammonia for
exports by 2030 helping India’s allies to decarbonise.
This may require up to 100 GW of green hydrogen.
5. $1 billion investment into hydrogen research and
development to enable breakthrough technologies for
the world at scale and the speed that is required.
With proactive collaboration among innovators, entrepreneurs
and government, green hydrogen has the potential to drastically
reduce CO
2
emissions, fight climate change, and put India on
a path towards net-zero energy imports. It will also help India
export high-value green products making it one of the first major
economies to industrialise without the need to ‘carbonise’. This
report is a result of 12 months of intensive consultative analysis by
NITI Aayog and complemented by independent techno-economic
modelling of RMI.
Amitabh Kant, CEO (NITI Aayog) Foreword
www.niti.gov.in | www.rmi.org /
8Harnessing Green Hydrogen
India is undertaking a resolute march towards a sustainable
energy future. Prime Minister Narendra Modi’s pledge at COP26
towards a net-zero India by 2070 promises to accelerate this
momentum. Much action will be required to fulfil these pledges.
Central to a decarbonised India will be a widespread adoption
of renewable power and vehicle electrification. Targets and
policies such as the 500 GW non-fossil fuel electricity capacity by
2030, scheme for Faster Adoption and Manufacturing of Electric
Vehicles- Phase II (FAME II), and ₹18,100 crore production-linked
incentives for encouraging manufacturing of advanced cell
chemistry (ACC) batteries in the country, represent a concrete
policy push towards fulfilling these ambitions.
To further complement these ongoing efforts, India is prioritising
green hydrogen as a potential solution to decarbonise hard-to-
abate sectors such as refinery, ammonia, methanol, iron and steel
and heavy-duty trucking. Prime Minister Modi recently announced
the National Hydrogen Mission with the aim of making India the
world’s largest hydrogen hub. The efforts of the Mission has
resulted in the recently approved Green Hydrogen Policy.
India’s distinct advantage in terms of low-cost renewable electricity,
complemented by rapidly falling electrolyser prices, can enable
green hydrogen to be not just economical compared to fossil-fuel
based hydrogen but also compared to the green hydrogen being
produced around the globe.
Adoption of green hydrogen can enable India to abate 3.6
gigatonnes of CO
2
emissions cumulatively between now and 2050.
This can be a significant lever for the nation to contribute towards
its recently announced climate targets and net-zero vision. www.niti.gov.in | www.rmi.org /
9Harnessing Green Hydrogen
As highlighted in this report, India can target the following areas to
make a successful transition to green hydrogen.
• Both near-term and long-term policy pathways to reduce the
cost of green hydrogen need to be encouraged to enable cost
competitiveness against alternatives.
• A cost-competitive green hydrogen is bound to lead to market
creation. But the government can also encourage near-term
market development by identifying industrial clusters and
enacting associated viability gap funding and mandates.
• An emerging green hydrogen economy means opportunities
around research and development and manufacturing
of components such as electrolysers and fuel cells, crucial to
enabling the industry to develop and scale.
• A globally competitive green hydrogen industry also leads to
prospects of exports of green hydrogen and hydrogen-
embedded low-carbon products such as green ammonia and
green steel.
India is at a crucial juncture in terms of its energy landscape and
green hydrogen has a critical role to play to make the nation self-
reliant and energy-independent. Hydrogen can be an energy molecule
that is truly ‘made-in-India’ and that can contribute to the country’s
energy security and long-term economic competitiveness. India
has the unique opportunity to capitalise on this new technology
and become a world leader in green hydrogen production and its
applications.
We would like to congratulate NITI Aayog for its leadership and
partnership in the development of this report and for laying out a
green hydrogen roadmap. We hope this report will provide useful
inputs for the National Hydrogen Mission and its planning and
implementation.
Clay Stranger (Managing Director, RMI) Preface
The Ministry of Power (MoP) recently unveiled the first part of India’s much awaited
Green Hydrogen Policy on February 17, 2022. The policy is one of the key outcomes
of the National Hydrogen Mission which was launched by the Hon’ble Prime Minister,
Shri Narendra Modi, on India’s 75
th
Independence Day last year. It marks the culmination
of months of efforts across multiple ministries and stakeholder groups, and affirms
India’s intent to be a global green hydrogen hub.
There is also an increased consensus around the world that concerted steps need to
be taken to reduce global warming to levels less than 2°C and if possible to cap it at
1.5°C higher than pre-industrial levels. Various countries have pledged their Nationally
Determined Contributions to ensure energy transition and reduce emissions.
This report aspires to serve as one of the key knowledge bases for the benefit of India’s
Green Hydrogen Policy discourse and private sector investment decisions. It was
developed over the course of a year by the NITI Aayog team with RMI as the knowledge
partner. Beyond primary analysis, the report takes into account views expressed during
stakeholder engagements across academia, think tanks, private sector entities, and
startups. The report aims at providing the much-needed direction and insight for the
stakeholders to act on at this crucial juncture of industry building.
www.niti.gov.in | www.rmi.org /
10Harnessing Green Hydrogen
India’s Green Hydrogen Policy
Most large economies including India have committed to net zero targets. Transition to Green Hydrogen and
Green Ammonia is one of the major requirements for reduction of emissions, especially in the hard to abate
sectors. Government of India have had under consideration a number of policy measures in order to facilitate
the transition from fossil fuel I fossil fuel based feed stocks to Green Hydrogen / Green Ammonia both as
energy carriers and as chemical feed stock for different sectors. After careful consideration, the Government
of India have framed the policy on Green Hydrogen which provides the following:
1. Green Hydrogen / Green Ammonia shall be defined as Hydrogen / Ammonia produced by way of
electrolysis of water using Renewable Energy; including Renewable Energy which has been banked
and the Hydrogen/Ammonia produced from biomass. www.niti.gov.in | www.rmi.org /
11Harnessing Green Hydrogen
2. The waiver of inter-state transmission charges shall be granted for a period of 25 years to the producer of
Green Hydrogen and Green Ammonia from the projects commissioned before 30
th
June 2025.
3. Green Hydrogen / Green Ammonia can be manufactured by a developer by using Renewable Energy from
a co-located Renewable Energy plant, or sourced from a remotely located Renewable Energy plants,
whether set up by the same developer, or a third party or procured renewable energy from the Power
Exchange. Green Hydrogen/Green Ammonia plants will be granted Open Access for sourcing of Renewable
Energy within 15 days of receipt of application complete in all respects. The Open Access charges shall be in
accordance with Rules as laid down.
4. Banking shall be permitted for a period of 30 days for Renewable Energy used for making Green Hydrogen
/ Green Ammonia.
5. The charges for banking shall be as fixed by the State Commission which shall not be more than the cost
differential between the average tariff of renewable energy bought by the distribution licensee during the
previous year and the average market clearing price (MCP) in the Day Ahead Market (DAM) during the
month in which the Renewable Energy has been banked.
6. Connectivity, at the generation end and the Green Hydrogen / Green Ammonia manufacturing end, to
the ISTS for Renewable Energy capacity set up for the purpose of manufacturing Green Hydrogen / Green
Ammonia shall be granted on priority under the Electricity (Transmission system planning, development
and recovery of Inter State Transmission charges) Rules 2021.
7. Land in Renewable Energy Parks can be allotted for the manufacture of Green Hydrogen / Green Ammonia.
8. The Government of India proposes to set up Manufacturing Zones. Green Hydrogen / Green Ammonia
production plant can be set up in any of the Manufacturing Zones.
9. Manufacturers of Green Hydrogen / Green Ammonia shall be allowed to set up bunkers near Ports for
storage of Green Ammonia for export / use by shipping. The land for the storage purpose shall be provided
by the respective Port Authorities at applicable charges.
10. Renewable Energy consumed for the production of Green Hydrogen / Green Ammonia shall count towards
RPO compliance of the consuming entity. The renewable energy consumed beyond obligation of the
producer shall count towards RPO compliance of the DISCOM in whose area the project is located.
11. Distribution licensees may also procure and supply Renewable Energy to the manufacturers of Green
Hydrogen / Green Ammonia in their States. In such cases, the Distribution licensee shall only charge
the cost of procurement as well as the wheeling charges and a small margin as determined by the
State Commission.
12. Ministry of New and Renewable Energy (MNRE) will establish a single portal for all statutory clearances and
permissions required for manufacture, transportation, storage and distribution of Green Hydrogen / Green
Ammonia. The concerned agencies/authorities will be requested to provide the clearances and permissions
in a time-bound manner, preferably within a period of 30 days from the date of application.
13. In order to achieve competitive prices, MNRE may aggregate demand from different sectors and have
consolidated bids conducted for procurement of Green Hydrogen/Green Ammonia through any of the
designated implementing agencies. Executive
Summary www.niti.gov.in | www.rmi.org /
13Harnessing Green Hydrogen
Executive Summary
Hydrogen, as an energy carrier, is becoming crucial
for achieving decarbonization of hard-to-abate sectors.
Many sectors such as iron ore and steel, fertilizers,
refining, methanol, and maritime shipping emit major
amounts of CO
2
, and carbon-free hydrogen will play a
critical role in enabling deep decarbonization. For other
high-emitting sectors, such as heavy-duty trucking and
aviation, hydrogen is among the main options being
explored with an outlook to be the preferred solution
for several applications.
This has resulted in growing global momentum towards
hydrogen in general, and green hydrogen—hydrogen
produced through electrolysis of water using electricity
from renewable sources—in particular. Declining
prices of hydrogen, coupled with growing urgency for
decarbonization means the global demand for hydrogen
could grow by almost 400 percent by 2050, led by
industry and transportation.
1
A new growth momentum is emerging among various
nations. At least 43 countries have now set up or are
setting up strategies or roadmaps for a hydrogen
economy,
2
including financial incentives to accelerate
the transition. For India, this current impetus
surrounding the hydrogen transition fits well within the
context of a low-carbon economy, energy security, and
the larger economic development ambition of the nation.
The Prime Minister’s Independence Day speech on
August 15
th
, 2021, signalling the launch of the National
Hydrogen Mission, attests to India’s intent to be a global
hub for green hydrogen. As PM Modi’s speech outlines,
“not only will green hydrogen be the basis of green
growth through green jobs, but it will also set an example
for the world towards clean energy transition.”
3
India’s distinct advantage in low-cost renewable energy
generation makes green hydrogen the most competitive
form of hydrogen in the long run (Exhibit 1). This enables
India to potentially be one of the most competitive
producers of green hydrogen in the world. Green hydrogen
can achieve cost parity with natural gas-based hydrogen
(grey hydrogen) by 2030, if not before. Beyond cost, since
hydrogen is only as clean as its source of generation,
green hydrogen will be necessary to achieve a truly low-
carbon economy. It will also enable the emergence of a
domestically produced energy carrier that can reduce
the dependence on imports for key commodities like
natural gas and petroleum.
Exhibit 1Projected price trajectory of solar-green hydrogen production based on decline in electrolyser and
renewable costs
Source: IEA, BNEF, TERI, SECI, RMI Analysis | Currency conversion: $1 = ₹72
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
LCOH (US$/kg)
2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050
MOST COMPETITIVE BLUE H2
GREY H2 PRICE RANGE
GREEN H2 FROM ON SITE RENEWABLES
GREEN H2 FROM RTC RENEWABLES WITH T&D WAIVER
2030 prices:
Green H2: $1.7 - $2.4/kg
RTC Renewables: $2.1/kg
Grey H2: $1.8 - $2.7/kg
2050 prices:
Green H2: $0.6 - $1.2/kg
RTC Renewables: $0.9/kg
Grey H2: $1.9 - $2.9/kg www.niti.gov.in | www.rmi.org /
14Harnessing Green Hydrogen
Hydrogen demand in India could grow more than
fourfold by 2050, representing almost 10% of global
hydrogen demand.
4
Initial demand growth is expected
from mature markets like refinery, ammonia, and
methanol, which are already using hydrogen as
industrial feedstock and in chemical processes. In the
longer term, steel and heavy-duty trucking are likely to
drive the majority of demand growth, accounting for
almost 52% of total demand by 2050.
5
From a price parity basis alone, green hydrogen’s share
of this demand could grow from 16% in 2030 to almost
94% by 2050. This translates to an implied cumulative
electrolyser capacity demand of 20 GW by 2030 and
226 GW by 2050, promising a sizeable opportunity for
indigenous manufacturing of a global emerging energy
technology. The cumulative value of the green hydrogen
market in India could be $8 billion by 2030 and $340
billion by 2050. Electrolyser market size could be
approximately $5 billion by 2030 and $31 billion by 2050.
Adoption of green hydrogen will also result in 3.6 giga
tonnes of cumulative CO
2
emissions reductions between
2020 and 2050.
6
Energy import savings from green
hydrogen can range from $246 billion to $358 billion
within the same period.
7
Beyond the financial savings,
the energy security that green hydrogen provides will
translate to less volatile price inputs for India’s industries
as well as strengthen India’s foreign exchange situation
in the long run.
While the prospects for domestic demand and exports
are enticing, it’s also important to achieve the expected
decline in price. In the near-term, it’s crucial to focus
on domestic demand creation efforts, cost reduction
pathways, and early pilots, as well as to learn by doing in
competitive manufacturing of electrolysers. Limitation of
storage and the high cost of transportation means that
early market development should centre on identifying
clusters of industrial demand that could be served by
localized generation of hydrogen.
The government can reduce costs through preferential
electricity tariffs. And it can develop the market
Exhibit 2Hydrogen demand outlook and potential green hydrogen share at cost parity
(without policy intervention)
Source: MoS, MoC&F, MoPNG, IEA, TERI, BCG, World Bank, RMI Analysis
0.0
5.0
10.0
15.0
20.0
25.0
30.0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total Hydrogen Demand (Million Tonnes)
Green Hydrogen Share
2020204020502030
POWER
HDV
STEEL
METHANOL
AMMONIA
REFINERY
SHARE OF GREEN H2 www.niti.gov.in | www.rmi.org /
15Harnessing Green Hydrogen
through incentives and mandates for existing hydrogen-
consuming sectors like refinery and ammonia/fertilizer,
which will require comparatively lower transition support.
Such favourable policies can greatly increase demand
for hydrogen and the accompanying electrolyser
capacity required. It can provide a degree of near-term
demand certainty for the private sector, given the
risks associated with investment in early-stage energy
technologies like hydrogen. This demand certainty
can set the stage for green hydrogen to ride the cost
reduction curve and achieve scaled adoption in the long
term. And in the process it can lead to decarbonization,
energy and economic security, and indigenous
manufacturing.
A truly domestic energy carrier that is competitive
globally can also provide a unique opportunity to
participate in the energy and commodities trade. Given
the expected growth in global demand and the disparity
between producing and consuming nations, the need for
hydrogen trade is bound to emerge eventually. If volume
growth and price decline expectations can be met, this
hydrogen transition can enable industries to shape up in
India around exports of green hydrogen and hydrogen-
embedded low-carbon commodities like green ammonia
and green steel.
Towards a National Action Plan on
Green Hydrogen
Given the prospects that green hydrogen presents for
India, real action is required for the country to truly
benefit from the opportunities. This report provides ten
actionable steps that can guide a National Action Plan
on Green Hydrogen.
1. A detailed roadmap focused on all aspects of
‘Green Hydrogen’
The recent announcement of the National Hydrogen
Mission needs to be complemented with further policy
direction in the form of a national roadmap/strategy.
8
A long-term roadmap focused on green hydrogen will
improve investors’ confidence and will converge the
entire value chain and the various government agencies
towards a singular vision.
2. Intervene on the supply-side to reduce the cost
of green hydrogen to $1/kg
Similar to other technology deployment and scaling
efforts, government can encourage the cost economics
of early producers. The current Green Hydrogen policy
already focuses on measures like waiver of inter-state
transmission (ISTS) charges and granting of open access
for green hydrogen and green ammonia production.
Other measures could include reduction in taxes and
surcharges, preferential dollar-based electricity tariff,
revenue recycling of any carbon tax, low-emission power
purchase agreements (PPAs), and avenues for firming
electricity supply including discounted grid electricity
to complement variable renewable energy (VRE)
generation.
3. Establish mandates and provide incentives to
achieve a green hydrogen production capacity of
160 GW
The government can propose clear mandates around
hydrogen blending in existing (refinery and ammonia)
and potentially future consumption sectors (steel and
heavy-duty vehicles). This will provide demand certainty
for early green hydrogen projects and encourage market
development. For new applications, where the viability of
using green hydrogen is still nascent, the government can
provide incentives such as a production linked incentive
(PLI) scheme for green steel targeting export markets.
4. Build manufacturing capacity totalling 25GW
by 2030 coupled with supportive manufacturing
and R&D investments
The roadmap should also identify a timeline and scale
of manufacturing support for electrolysers. India may
aim for 25 GW of electrolysers by 2030, while also
investing $1 billion in R&D to catalyse the development
of commercial green hydrogen technologies across the
value chain. Radically improving the speed of regulatory
clearances coupled with preferential treatment in public
tenders will help catalyse local manufacturing. Grand
challenges, public-private venture capital and financing
test bench infrastructure could be part of the R&D
investments.
5. Initiate green hydrogen standards and a labelling
programme
Immediate action should be undertaken to further
develop standards and a green hydrogen labelling
programme. www.niti.gov.in | www.rmi.org /
16Harnessing Green Hydrogen
6. Promotion of exports of green hydrogen and green
hydrogen-embedded products through a global
hydrogen alliance
The government must explore integrating hydrogen into
existing energy and industrial partnerships globally.
This should include developing collective frameworks and
creating labelling and standards around green hydrogen
and hydrogen-embedded products like green steel and
green ammonia. The government should explore specific
near-term incentives around green ammonia and green steel
production.
7. Facilitate investment through demand aggregation
and dollar-based bidding for green hydrogen
The government can provide financial certainty to early
adopters through investment facilitation measures like
demand aggregation, ensuring availability of long-tenor
and low interest finance and initiation of a functioning
carbon market.
8. Encourage state-level action and policy making
related to Green Hydrogen
States should be encouraged to launch their own green
hydrogen-based policies in order to complement efforts at
the national-level. This way the champion green hydrogen
states could also be identified.
9. Encourage capacity building and skill development
Initiate appropriate and rapid skills development across the
ecosystem including government, industry, and academia
addressing technologies, business models, policies, and
geopolitics.
10. Construct an inter-ministerial governance structure
The government should create an interdisciplinary Project
Management Unit (PMU) with globally trained experts.
The PMU should dedicate fulltime resources to effectively
implement the mission. At the policy level, an inter-
ministerial mechanism should be instituted to coordinate
across the efforts of the various ministries and
departments required to achieve the target of the mission.
Exhibit 3Visionary 2030 electrolyzer target for green hydrogen production
Source: NITI Aayog * Note 1: 1 million tonnes of green hydrogen corresponds to around 11-13 GW of electrolyser capacity.
* Note 2: Additional demand could arise from electric fuels and 24X7 power storage depending on tech
and policy evolution
* Note 3: Exports (other H2 carriers) refers to a possible development of new H2 carriers. If new
carriers are not realised, Ammonia is likely to fulfil this portion of demand (41 GW).
GREEN HYDROGEN EXPORTS
PRODUCT EXPORT INCENTIVES
PILOTS
MANDATES / VIABILITY GAP FUNDING (VGF)
ADDRESSABLE DEMAND (RMI)
0
20
40
60
80
100
120
140
160
180
RefineryMethanolSteelHDVs CGDVisionary
Demand Target
Exports
(other H2 carriers)
Ammonia
GW of Electrolyzer Capacity
Million tonnes of H2
41 160
5
0.2
0.5
12.3
31
15
69
0
2
4
6
8
10
12
14 Introduction www.niti.gov.in | www.rmi.org /
18Harnessing Green Hydrogen
Introduction
The world is in a unique and necessary phase of energy
transition, where emerging low-carbon technologies are
replacing existing fossil fuel assets and are shaping a
new energy paradigm. Rise of technologies such as solar
and wind, lithium-ion batteries, and alternative fuels have
paved the way for decarbonization in various end-use
sectors. However, there are certain sectors like industry
and heavy transport that are hard to decarbonize using
the current low- or zero-carbon technologies. Hydrogen
promises to address those challenges and contribute to
the decarbonization of these hard-to-abate sectors.
Hydrogen fundamentals
Hydrogen is an energy carrier and can be used for a wide
array of energy and industrial applications. It can also be
stored for long time. The opportunities and challenges of
hydrogen emerge from its energy characteristics
(see Exhibit 4
9
). Hydrogen’s specific energy (i.e.,energy
content per unit of mass) is higher than most hydrocarbon
fuels. But its volumetric energy density is the lowest.
That means pressurization or liquefaction is required for
hydrogen to be useful as a fuel. These two properties
drive the value as well as the applicability of hydrogen
for the various possible end-use cases.
Production
Although hydrogen is the lightest and most abundant
element in the universe, it is rarely found in nature in its
elemental form and always must be extracted from other
hydrogen-containing compounds. It also means that how
well hydrogen contributes decarbonization depends on
how clean and green the method of production is.
Based on the sources and processes, hydrogen can be
classified into various colours:
• Black / Brown / Grey
hydrogen is produced via coal
or lignite gasification (black or
brown), or via a process called
steam methane reformation (SMR)
of natural gas or methane (grey).
These tend to be mostly carbon-
intensive processes.
• Blue hydrogen is produced
via natural gas or coal gasification
combined with carbon capture
storage (CCS) or carbon capture
use (CCU) technologies to reduce
carbon emissions.
• Green hydrogen is produced
using electrolysis of water with
electricity generated by renewable
energy. The carbon intensity
ultimately depends on the carbon
neutrality of the source of electricity
(i.e., the more renewable energy
there is in the electricity fuel
mix, the “greener” the hydrogen
produced).
Exhibit 4Energy density profile of different fuels
compared with Hydrogen
Source: World Bank ESMAP
Volumetric Energy Density (MJ/L)
0
20
40
60
80
100
120
140
160
0 5 10 15 20 25 30 35 40 45
Specific Energy (MJ/kg)
HYDROGEN (at 1 atm)
METHANOL
AMMONIA
GASOLINE
BIODIESEL
HEAVY FUEL OIL
NATURAL GAS
LNG
HYDROGEN (at 1,000 bar)
DIESEL
HYDROGEN (liquid) www.niti.gov.in | www.rmi.org /
19Harnessing Green Hydrogen
Central to the green hydrogen production process is
the electrolyser technology. Alkaline and polymer
electrolyte membrane (PEM) electrolysers are two
commercially available technologies for green hydrogen
production today. Advanced electrolyser technologies
like solid oxide and anion exchange membrane nearing
commercial deployment as well.
• Other less prevalent sources of production include
bio-hydrogen which can either be produced by an SMR
process around methane produced by anaerobic digestion
of organic waste or through a fermentation process
by bacteria.
Transportation and Storage
Storage and transportation of hydrogen have traditionally
been difficult due to the unique characteristics of the
gas—flammability, low density, ease of dispersion, and
embrittlement.
i
Yet technical development and commercial
impetus are increasingly enabling more economic modes of
storage and transportation.
Hydrogen has three main avenues for storage, each
with their own use cases and challenges:
• Storage Tanks are the simplest
and at times economical way to
store and transport hydrogen—
usually in the form of compressed
and cryo-compressed hydrogen.
ii
The challenge for compressed
hydrogen storage is that hydrogen’s
low-density results in the need for large containers—three
times the size used for methane and ten times the size
used for petrol
10
—which increases the material costs.
Liquefaction of hydrogen is another way to increase
density, but liquefaction also has higher energy costs—up
to 30% of the energy content of the fuel compared with
4%–7% for compressed hydrogen.
11
• Chemical storage in in the
form of compounds such as
liquified organic hydrogen carriers
(LOHCs) like methanol and
toluene, and hydrides such as
ammonia (NH
3
) are also gaining
prominence given the high energy cost of liquefaction
and material inefficiencies of compression. Each mode
of chemical storage, however, comes with its own uses
and hurdles, including energy conversion cost and chemical
characteristics that require careful handling etc.
12
• Natural underground storage
in salt caverns and salt domes
are large volume, low-cost, natural
storage options, but local availability
can be a challenge.
Hydrogen can be transported three main ways,
depending on the distance, volume, and state in
which transporting:
• Pipelines tend to be the cheapest
way to move hydrogen over longer
distances. Constructing pipelines
usually requires volume and demand
certainty to justify investment.
Additionally, existing natural gas
pipelines can be repurposed provided
they meet the technical criteria to reduce the risk of
embrittlement. Repurposing of existing pipelines also
enables blending of hydrogen within the existing natural
gas networks for end uses where blended hydrogen can
accelerate demand creation.
• Trucks are also used to transport
hydrogen in smaller volumes, both
in gaseous and liquid form, for local
distribution and longer journeys.
• Tanker ships are beginning to
be used for larger volume, longer
distance transport, mainly moving
liquid hydrogen (LH2), LHOCs, and
ammonia. Shipping of hydrogen is
currently expensive due to added
conversion costs (liquefaction or
chemical conversion) in addition
to the necessary structural design
to reduce risk of embrittlement. www.niti.gov.in | www.rmi.org /
20Harnessing Green Hydrogen
Challenges to a Hydrogen transition
In addition to the technical challenges discussed above,
the emergence of a hydrogen economy has been
challenging because of high costs, supply chain
complexity, policy, and regulations.
The cost of green hydrogen production is much higher
than what is produced from fossil fuels. Decreasing
renewables prices and economies of scale promise to
make green hydrogen economical going forward, but
much work remains.
Hydrogen can be produced by a variety of process and
has use in various sectors, making its sourcing and
supply chain complicated when compared to oil and gas.
Moreover, as discussed above, transporting and storing
hydrogen remain a big challenge and will require massive
investment in infrastructure upgrades.
Traditionally, hydrogen has seen minimal policy support
from governments across the globe so far. Policy push
has been towards other technology options and end
uses, even when hydrogen can make a much bigger
impact. Lastly, standards around hydrogen use either
don’t exist or haven’t been updated.
Emerging Importance of Hydrogen
Despite all the challenges discussed, hydrogen’s utility
for selected use cases is increasingly providing economic
value compared with alternatives. This is slowly shaping
a market for hydrogen.
Hydrogen can be consumed through either direct
combustion, electricity generation through fuel
cells, or industrial processes to be used as chemical
feedstock. Direct use includes industrial processes
in iron and steel plants and refineries; transportation
fuel for light duty vehicles, buses, trucks, trains, and
potentially shipping and aircrafts; and power sector
storage and grid balancing and for co-firing in thermal
power plants. Hydrogen is essential as a chemical
feedstock for the production of ammonia (used in
the fertilizer industry), methane, and methanol.
Exhibit 5Hydrogen End Use
Fuel
Feedstock
Transport
Power
MaritimeRoad Freight AviationTrains
Flexibility
Seasonal Storage
Peaking Plants
Power backup
Steel, Paper, Cement,
Aluminium, Food
Heat
ChemicalsProducts
Fertilizer, Plastics,
Fuel refining
Metallurgy, Steel
Food, Glass
Industry www.niti.gov.in | www.rmi.org /
21Harnessing Green Hydrogen
While the use cases for hydrogen are not a new revelation,
the emerging momentum is a recent phenomenon and
hinges on hydrogen’s role as an energy carrier crucial
for achieving deep decarbonization of hard-to-
abate sectors. Existing low-carbon technologies and
techniques such as solar, wind, Li-ion batteries, and
energy efficiency are contributing to the decarbonization
of various sectors such as power generation, buildings,
and light transportation.
However, carbon-free hydrogen will play a critical role in
decarbonizing certain end-use sectors such as iron ore
and steel, fertilizers, refining, methanol, and maritime
shipping, which emit major amounts of CO
2
. For other
high-emitting sectors, such as heavy-duty trucking and
aviation, hydrogen is among the main options being
explored with an outlook to be the preferred solution for
several applications.
Further, production of hydrogen through electrolysis
of water can support widespread renewable
electricity generation and can act as an energy storage
mechanism. Moreover, decreasing costs of renewables
will lead to a reduction in hydrogen production costs,
making hydrogen more competitive.
Lastly, hydrogen can help reduce the nation’s reliance
on oil imports and bolster a domestic job market.
Additionally, it provides the ability to participate in the
ensuing global energy transition and the economic
opportunity that transition presents.
A renewed momentum
With countries’ and companies’ growing net-zero
emission targets and hydrogen’s capability to
decarbonize the hard-to-abate sectors, hydrogen has
started witnessing new momentum among various
nations. At least 43 countries have now set up or are
setting up either strategies or roadmaps for a hydrogen
economy.
13
Most of the government related R&D funding
for hydrogen is concentrated in Europe, the United
States, Japan, and China.
14 www.niti.gov.in | www.rmi.org /
22Harnessing Green Hydrogen
Exhibit 6Mapping emerging hydrogen roadmaps and strategy documents of leading countries and regions
15,16
Current
Hydrogen
Demand
Policy Target
Demand
Demand FocusCapital
Allocated
(US$)
Focused
Hydrogen
Source IndustryTransport Others
Export/
Import
Focus
European Union
Germany
France
Netherlands
Hungary
Portugal
Spain
United Kingdom
Norway
Japan
South Korea
United States
Canada
Australia
Chile
China
Russia
1.65 MMTPA
0.9 MMTPA
1.5 MMTPA
160 ktpa
~150 ktpa
0.5 MMTPA
0.7 MMTPA
2 MMTPA
220 ktpa
10 MMTPA
3 MMTPA
650 ktpa
58.5 ktpa
22 MMTPA
2-3.5 MMTPA
6 GW capacity by 2024;
40 GW by 2030; 10 MMTPA
green H
2
by 2030
2.7-3.3 MMTPA by 2030
6.5 GW via electrolysis
by 2030
Not Available
36 ktpa (low carbon) +
138 ktpa (grey) by 2030
2-2.5 GW via electrolysis
by 2030
400 ktpa overall by 2030
4 GW via electrolysis by
2030
5 GW/a electrolysis
capacity by 2030
3 MMTPA by 2030 and
20 MMTPA by 2050
(5-30 by 2050)
3.9 MMTPA by 2030 and
27 MMTPA by 2050
20 MMTPA
5 GW/a (2025)
25 GW/a (2030)
35 MMTPA (by 2030);
160 MMTPA (by 2050)
7 MMTPA by 2035 and
33 MMTPA by 2050
(export only)
1. Chemical feedstock
2. Refining
1. Iron and Steel
2. Chemical feedstock
3. Refining
1. Iron and Steel
2. Chemical feedstock
3. Refining
4. Others
1. Iron and Steel
2. Chemical feedstock
3. Refining
4. Others
1. Chemical feedstock
2. Refining
1. Iron and Steel
2. Chemical feedstock
3. Refining
4. Others
1. Chemical feedstock
2. Refining
1. Chemical feedstock
2. Iron and Steel
1. Chemical feedstock
1. Refining
2. Others
1. Iron and Steel
2. Chemical feedstock
3. Refining
4. Others
1. Chemical feedstock
1. Chemical feedstock
2. Refining
1. Refining
609 billion
15-20 billion
> 7 billion
40-55
million/yr
450 million
No
dedicated
capital
No details
2 billion
23 million
935
million
/ y / yr
653
million
/ y / yr
> 15 billion
1.2 billion
278 million
(annual
support)/ yr
50 million
13 million
1.2 billion
Low Carbon -
Blue / Green
Carbon free -
Blue / Green
Low Carbon
- Blue
Blue / Green
Low Carbon -
Grey / Blue
Green
Green
Blue / Green
Clean
Blue
Grey / Blue /
Green
Low Carbon -
Blue / Green /
Others
Low Carbon
Intensity -
Grey / Blue
Clean - Blue /
Green
Green
Green (long-
term)
Low Carbon -
Blue / Nuclear
1. Medium and Heavy Duty
2. Buses
3. Rail
1. Medium and Heavy Duty
2. Buses
3. Rail
1. Medium and Heavy Duty
2. Buses
3. Rail
4. Aviation
1. Passenger Vehicle
2. Medium and Heavy Duty
3. Buses
4. Rail
1. Medium and Heavy Duty
2. Buses
1. Passenger Vehicle
2. Medium and Heavy Duty
3. Buses
1. Medium and Heavy Duty
2. Buses
3. Rail
4. Aviation
5. Shipping
1. Maritime
1. Passenger Vehicle
1. Passenger Vehicle
2. Medium and Heavy Duty
3. Buses
1. Passenger Vehicle
2. Medium and Heavy Duty
3. Buses
4. Aviation
1. Passenger Vehicle
2. Medium and Heavy Duty
3. Buses
4. Rail
1. Medium and Heavy Duty
2. Buses
1. Medium and Heavy Duty
2. Buses
1. Passenger Vehicle
2. Medium and Heavy Duty
3. Buses
1. Rail
Import
Export
EU Export/
Import
Hub
Export
Export
Export
Import
Import
Export
Export
Export
Export
1. Heating
1. Heating
1. Heating
1. Heating
2. Power
1. Heating
2. Power
1. Power
1. Heating
2. Power
3. Energy
storage
1. Heating
1. Heating
1. Heating
1. Power www.niti.gov.in | www.rmi.org /
23Harnessing Green Hydrogen
Over the past decade, financial support to hydrogen
by governments has increased. The amount of support
depends on countries’ advancement of their hydrogen
agenda. While early support had focused on R&D and
initial investments, much of the newer financial support
aims to close the gap on the operating cost differential
to existing technologies. Globally, governments are
moving towards supporting commercialisation and
demonstration of entire value chains, often through
public-private partnerships (See Appendix for details on
country strategy). Nations are increasingly using regions,
cities, or industrial clusters as focal points of financing. In
addition to direct support and programs, public financial
institutions are being engaged to support the transition.
Currently, almost $11.4 billion per year of national
government subsidies have become available for
hydrogen projects directly or indirectly.
17
This signals a
growing intent to spur the hydrogen economy, akin to
the support the solar and wind industries received over
the previous decades.
Global Hydrogen Supply and Demand
– Where is hydrogen now and where
it is heading?
Given this growing support, global supply and demand
of hydrogen, particularly green hydrogen is expected
to witness tremendous growth. Sustaining this policy
momentum is the emerging economics of green
hydrogen production (see Box 1). Although 98% of
hydrogen is currently produced from fossil fuels
(Natural gas – 71%, Coal – 27%)
18
, in the last decade,
number of electrolyser projects have jumped from
40 to 100, amounting to an increase in their capacity
from 2 MW to over 200 MW in 2020.
19
Box 1What Drives the cost of Hydrogen production?
20
GREY HYDROGEN ECONOMICS
For traditional fossil fuel-based grey (or even brown) hydrogen, the fossil fuel price is the biggest determinant of hydrogen
cost. Other costs include for transportation and storage and any taxes or foreign exchange risk associated with fuel
imports. For blue hydrogen, the cost of carbon capture and storage (CCS) will need to be included. The difference with
green hydrogen is that, in the absence of fuel, the capital expenditure around electrolysers (and any other associated
infrastructure) and their utilization and power costs are what ultimately decides the production economics.
Central to global scale-up of green hydrogen, are the lowering of renewable costs and expected cost decline of electrolysers.
IRENA estimates an 80% drop in green hydrogen costs if the electrolyser capital cost falls by 80% and the electricity
costs drop below $20/MWh.
Additional factors like higher capacity factors of renewable energy generators, increased
electrolyser efficiency, and longer electrolyser lifetimes are important contributing factors that can enable the cost-
competitiveness of green hydrogen.
Hydrocarbon economics
(LNG / fossil fuel landed
cost + transportation)
Foreign exchange
(if fuel is imported)
Transportation, Storage
and Others
GREEN HYDROGEN ECONOMICS
Electricity Cost (Generation
cost + utilization factor +
T&D cost)
Electrolyser Cost
(Capex + efficiency
& degradation)
Transportation, Storage
and Others www.niti.gov.in | www.rmi.org /
24Harnessing Green Hydrogen
Renewables prices have witnessed incredible declines
over the past years and the economic inertia is expected
to drive further decrease. When coupled with the decline
in electrolyser costs, as technology matures and volume
production and deployment take place, there is an
emerging consensus that green hydrogen production
will become economical. RMI’s analysis of IEA’s outlook
shows that the green hydrogen market could be
US$120–US$175 billion annually by 2050 based on a
range of projected prices.
iii,21
Exhibit 7The driving forces of the emerging economics of green hydrogen
Source: IRENA, BNEF, IEA
Globally, demand for hydrogen has increased by 17%
between 2010 and 2018,
22
used mostly to produce
ammonia and in refineries. With the global decarbonization
push, current policy momentum, and improvement in
economics and durability of end-use technologies like
fuels cells, hydrogen could serve 7%–18% of global final
energy demand in 2050.
23
Significant upside exists if
net zero targets are pursued seriously. The IEA projects
potential hydrogen demand of 528 million tonnes under
their net zero scenario, up from 287 million tonnes
as per their sustainable development scenario.
iv
This
could result in the mitigation of 1.6-3.5 giga tonnes of
greenhouse gas emissions annually by 2050.
24
Industrial
decarbonization (both energy and feedstock) is driving
near-term hydrogen demand creation. But longer-term
opportunities fall in transport, power, and even for
decarbonization of the shipping and airline industry.
Electrolyser price ($/kW)0
50
100
150
250
200
300
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2019 2030 2040 2050
Million Tonnes
India has some of the lowest renewable
costs in the world
Green hydrogen could become the largest source of
Hydrogen in the long-term
Alkaline electrolyser price decline PEM electrolyser price decline
RANGE OF WIND LCOE
RANGE OF UTILITY SOLAR LCOE
INDIA (WIND)
INDIA (SOLAR)
BROWN AND GRAY
BLUE
GREEN
SHARE OF GREEN H2
0
20
40
60
80
100
120
140
160
180
200
2020 2030 2040 2050
2018 USD/MWH
Renewable costs are declining globally
Exponential cost decline expectation for electrolysers
Global Hydrogen Production Outlook
RANGE
AVERAGE
0
200
400
600
800
1000
1200
1400
1600
2020 2030 2040 2050
0
200
400
600
800
1200
1400
2000
2020 2030 2040 2050
1000
1600
1800 www.niti.gov.in | www.rmi.org /
25Harnessing Green Hydrogen
Given the projected growth in green hydrogen, there
is consequent expectation for an exponential growth
in electrolyser capacity. The electrolyser market is
expected to reach gigawatt-scale in 2022 spurred by
increasing installation in China.
25
Almost 40 GW of
electrolysers by 2030 are already proposed.
26
There
could be significant increase if an aggressive green
hydrogen price decline allows for the replacement of
blue hydrogen with green hydrogen.
What could hydrogen mean for India?
For India, this momentum currently surrounding the
hydrogen transition efforts needs to be situated within the
context of a low-carbon economy, energy security, and
the larger economic development ambition of the nation.
India’s thrust towards a low-carbon economy currently
hinges on an accelerated transition towards a higher
share of renewables in the electricity grid complemented
by electrification of end uses such as transportation.
But there is a tacit recognition that materials critical
to industrialisation and urbanization such as steel,
ammonia, cement, and plastic have no substitutes and
cannot be decarbonized with electricity alone.
27
Green
hydrogen is a necessary lever to achieve a truly low-
carbon economy.
For India, this transition can be synergistic with the
scale, ambition, and economic competitiveness of
its renewable industry. Unlike fossil fuels which have
resource and geography constraints, green hydrogen
can be produced anywhere there is ample renewable
potential. India is blessed in that aspect. This will enable
the emergence of an energy carrier that is domestically
produced, reducing the dependence on imports for key
energy commodities like natural gas and petroleum.
Exhibit 8Hydrogen demand is expected to grow substantially
Source: IEA, S&P, Ballard, US DoE, RMI Analysis
Green demand has potential to grow more than threefold by 2050
POWER
HEATING IN BUILDINGS
SYNFUEL PRODUCTION
TRANSPORT
AMMONIA PRODUCTION FOR SHIPPING
INDUSTRY (INCL. AMMONIA)
REFINING
Global Hydrogen Demand Outlook
0
50
100
150
250
200
300
2019 2030 2040 2050
Million Tonnes
0
20
40
60
80
100
No. of fuel cell systems produced
Fuel cost decline
Learning rate = 15%
110 100 1,000 10,000 100,000
Fuel cell indexed cost
As end-use technology such as fuel-cell scales, their costs will also experience a decline
Hydrogen is not new; it is already being used for industrial feedstock uses.
Even India already consumes a substantial amount of industrial hydrogen,
2020eIndia(2020e)
Global Demand for Pure Hydrogen
OTHER
AMMONIA
REFINING
0
10
20
30
50
40
60
70
80
19751980198519901995200020052010201520182019e
Million Tonnes
Around 8%
of global
demand www.niti.gov.in | www.rmi.org /
26Harnessing Green Hydrogen
Given that the cost of electrolysers must decline for
hydrogen to become cost-competitive, research and
development and scaled manufacturing of electrolysers
is becoming an area of global technology competition.
India will benefit greatly from enabling domestic
manufacturing of electrolysers (and relatedly fuel
cells). This will allow the country to achieve technical
capability, participate in an emerging global market
underpinning the clean energy transition, and capture
more of the economic gains of this transition.
A truly domestic energy carrier that is price competitive
globally can also mean a unique opportunity to
participate in an energy and commodities trade. Given
the expected growth in global demand and the disparity
between producing and consuming nations, the need for
a hydrogen trade is bound to emerge eventually.
If volume growth and price decline expectations can be
met, this hydrogen transition can enable industries to
shape up in India around exports of green hydrogen and
hydrogen-embedded low-carbon commodities like green
ammonia and green steel.
This report is an attempt to understand this emerging
opportunity in India better. The next three chapters
lay out the scale of the opportunity while highlighting
possible challenges. The report also touches on the role
of finance in enabling this transition. Lastly, the report
aims to provide useful insights and policy-relevant
recommendations that can accelerate the development
of a sustainable hydrogen economy in India. Future of Hydrogen
in India www.niti.gov.in | www.rmi.org /
28Harnessing Green Hydrogen
The Future of Hydrogen in India
The emerging opportunity for hydrogen in India rests in
the ability to produce price-competitive green hydrogen
and enabling market creation for that hydrogen. This
chapter will focus on the supply and demand dynamics
within India.
Green Hydrogen Production in India
How competitive can it be?
As stated earlier, green hydrogen prices are determined
largely by the cost of electrolysers and electricity.
Beyond that, there are the operating costs, transmission
and distribution (T&D) costs, and wheeling charges for
electricity as well as specific local duties and taxes like
the goods and services tax (GST) in India. The supply
chain model, distance to demand centre, system design,
and utilization factor are additional factors that strongly
influence the delivered cost of hydrogen.
The cost of hydrogen from electrolysis today is relatively
high, between around $7/kg and $4.10/kg depending on
various technology choices and the associated soft costs
(see Exhibit 9). This makes it hard to compete with the
existing cost of grey or brown hydrogen. But India has
some of the most competitive levelized cost of electricity
(LCOE) for solar and wind in the world while remaining
a net importer of natural gas. Given the promises of
electrolyser cost and LCOE decline, it is more beneficial
to expand green hydrogen production in India rather
than production of grey or blue hydrogen.
v
Exhibit 9Current cost economics of green hydrogen production in India
Green HydrogenNatural Gas Based HydrogenCoal Based Hydrogen
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7. 0
LCOH ($/kg)
ElectricityFuelCapexCapexOpexOpexOthersOthersGrey H2CCSBlue H2Green H2FuelCapexOpexOthersBrown H2CCSBlue H2
FUEL
CAPEX
OPEX
OTHERS
CCS
RANGE
Source: RMI Analysis for Green and Natural Gas Based Hydrogen; Coal Based Hydrogen analysis adapted from TERI and BNEF www.niti.gov.in | www.rmi.org /
29Harnessing Green Hydrogen
Soft-cost driven green hydrogen price
reduction pathway
While electrolyser and electricity costs will guide the
long-term price trajectory of green hydrogen, there
are soft cost elements that can help reduce green
hydrogen production costs today to help spur market
development. Specifically targeting duty waiver and
reduction of the GST and T&D charges, the levelized cost
of hydrogen (LCOH) can be reduced to around $3.2/kg in
the best case, making it closer to becoming competitive
with grey hydrogen (Exhibit 10).
Reduction of T&D charges is not a novel suggestion
and should be pursued. The Ministry of Power already
waives inter-state transmission system charges for
electricity generated from wind and solar. Most recently,
this waiver was extended to projects commissioned from
30 June 2025, including for pumped storage hydro and
battery energy storage systems.
28
Extending this waiver
to renewable-based hydrogen production can drastically
improve the near-term economics of green hydrogen.
Beyond these soft costs, India should strive to reduce
renewable power tariffs for hydrogen production. These
could include revenue recycling of any carbon tax or
coal cess, low-emissions PPAs, and avenues for firming
electricity supply including discounted grid electricity to
complement the VRE generation.
Exhibit 10Soft cost led price-reduction pathway for current (2020) round-the-clock (RTC) renewable-based
green hydrogen
Source: RMI Analysis
* Hydrogen price calculated for RTC renewable (@ ₹3.6/kWh) with average T&D charges
** The range is based on high and low end of electrolzyer capex price: $500 - 969/kW
0
1
2
3
4
5
7
6
Refrence Green Hydrogen Price*GST Waiver (18% to 5%) Aggressive Hydrogen Price
LCOH ($/kg)
Full T&D Waiver
1.5
5.3 - 5.9
0.59 - 0.65
3.2 - 3.7
STACK REPLACEMENT
OPEX
CAPEX
ELECTRICITYT&D CHARGES
GST
RANGE** www.niti.gov.in | www.rmi.org /
30Harnessing Green Hydrogen
Future Price Trajectory of Green Hydrogen
With an expected price decline for both electrolysers
and renewables, our analysis indicates that in the best-
case scenario, the cost of green hydrogen can fall to
approximately $1.60/kg by 2030 and $0.70/kg by 2050
(Exhibit 11). Regardless of the scenario, the conclusion is
clear. Green hydrogen can become competitive with grey
hydrogen by 2030, if not earlier. Additional factors such
as a potential carbon price on fossil fuels could also aid in
the cost-competitiveness of green hydrogen.
Exhibit 11Projected price trajectory of solar-green hydrogen production based on decline in electrolyser and
renewable costs
Source: IEA, BNEF, TERI, SECI, RMI Analysis
MOST COMPETITIVE BLUE H2
GREY H2 PRICE RANGE
GREEN H2 FROM ON SITE RENEWABLES
GREEN H2 FROM RTC RENEWABLES WITH T&D WAIVER
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
LCOH (US$/kg)
2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050
2030 prices:
Green H2: $1.7 - $2.4/kg
RTC Renewables: $2.1/kg
Grey H2: $1.8 - $2.7/kg
2050 prices:
Green H2: $0.6 - $1.2/kg
RTC Renewables: $0.9/kg
Grey H2: $1.9 - $2.9/kg
Given the low LCOE of renewables, green hydrogen from
standalone renewable systems or from RTC renewable
arrangements will be more cost-effective than grid-
connected electrolysis. Additionally, given that the grid
is only gradually decarbonizing, the CO
2
intensity of
hydrogen generated with grid electricity will also remain
net positive even in the most VRE-rich case. While RTC
renewables could be very cost-competitive today and in
the near-term, there is a longer term potential for green
hydrogen generation from standalone renewables,
provided LCOE decline expectations materialise. www.niti.gov.in | www.rmi.org /
31Harnessing Green Hydrogen
Exhibit 12Most optimistic green hydrogen price trajectory
STANDALONE SOLAR
RTC RENEWABLES
0.0
H2 Price (US$/kg)
20302020 2021 2022 2023 2024 2025 20262028 20292027
0.1
0.2
0.3
0.4
3.23
3.12
3.00
2.75
2.52
2.31
2.11
1.92
1.75
1.59
1.43
(Key assumptions behind this scenario: Electrolyzer Capex ($/kW): 500(2020) , 125 (2030); Full T&D waiver; GST waiver
18% to 5%); LCOE of solar (INR/kWh): 1.9 (2020), 1.5 (2030); LCOE of RTC renewables (INR/kWh): 3.6 (2020), 2.85 (2030))
Box 2Aspirational price targets can be conducive to green hydrogen market development
As mentioned earlier, electrolyser price and the pace of its decline will be the most crucial determinant of long-
term price trajectory of green hydrogen. An assessment of the most optimistic price decline scenario informed
by a very aggressive electrolyser price decline assumption yields a hydrogen price of $1.4 / kg by 2030. While
there is a degree of uncertainty to this outlook, it is fair to conclude that aggressive price decline targets
coupled with relevant supply and demand side policy support could be effective tools for developing a viable
and competitive green hydrogen market in the country. www.niti.gov.in | www.rmi.org /
32Harnessing Green Hydrogen
Hydrogen Storage and Transportation
Considerations
Storage will eventually become necessary given the
variability of renewable sources and the possibility of
large and consistent demand coming from industries.
Storage costs could also potentially alter the cost
economics of standalone renewables and RTC
renewables-based hydrogen production, which can
have higher capacity utilization. Availability of cheap
natural storage like salt and rock caverns in India needs
to be assessed further given the high cost of storage in
pressurized steel tanks and the energy costs associated
with chemical storage. Further consideration is around
siting. Natural storage options will have limited flexibility
while steel tanks could be sited close to consumption or
production much more readily.
Transportation cost is another factor that can impact
cost economics. Pipelines become cost-effective once
hydrogen demand exceeds tens of tonnes per day.
29
As such, near-term development for large-scale
industrial consumption could be located closer to
production to minimize transportation and storage
costs. Transportation through compressed hydrogen
trucks looks to be the mainstay during the early phase
of hydrogen development. Given that moving electrons
is always more cost-effective than moving molecules,
there will always be a case for siting production closer
to consumption where possible.
Given that the evolution of transport and storage costs
and deployment is a large unknown, government, in
partnership with the private sector and other countries,
must play a part in both infrastructure assessment
and cost-reduction pathways. In the near term, an
assessment is needed on the viability and upgradation
costs of existing natural gas pipelines for hydrogen
transportation, which could help minimize the transition
cost to hydrogen.
Demand Prospect for Hydrogen
in India
India currently consumes almost 6 million tonnes of
grey hydrogen largely concentrated in industrial uses
in refining and as feedstock to produce ammonia and
methanol. Current hydrogen consumption is almost
equally split between refining and ammonia production
with a small share of consumption in methanol
production. A small quantity of hydrogen, amounting
to 0.3 million tonnes, is already being consumed for
steel production. Beyond these sectors, our assessment
indicates emerging potential demand in heavy-duty,
long-haul freight transportation and to a limited extent
in the power sector. Our assessment excludes niche
applications such as in industrial forklifts and cell phone
towers and city gas distribution. It also excludes demand
potential from aviation, shipping, and potentially
cooking, which are currently more speculative and
technically in very early stages.
Hydrogen demand is assessed under a scenario
where the pace and technology adoption are high, and
policies are implemented to enable the green hydrogen
transition. Scenario assumptions include a high uptake
of green hydrogen in end-use sectors, increased
penetration of fuel cell trucks, a rapid decrease in
electrolyser and renewable costs, and options for
financing this transition. Green hydrogen demand
is estimated within the overall hydrogen demand by
assessing the cost parity of green hydrogen-based end-
use products against grey/brown hydrogen-based end-
use products. CO
2
emissions and energy import savings
are estimated and compared with a base case of grey
hydrogen consumption in ammonia, refinery, methanol,
and steel and oil consumption for heavy-duty trucking.
A favourable policies (FPS) scenario is developed
to assess the market potential through incentives,
waivers, and mandates. The FPS analysis is intended to
understand the market creation in the short term and
hence is limited until 2030 only.
What drives sectoral demand for
Hydrogen?
Demand drivers for hydrogen are highly sector
specific. They depend on whether hydrogen is used
as industrial feedstock with no other alternatives or
whether it requires adopting new technology and
displacing existing fuel or technology. Further, the pace
of energy transition, new technology adoption, and the
presence of requisite policy and financial support will
also determine the demand outlooks for hydrogen. This
section is a brief discussion of sector-specific demand
drivers for hydrogen.
Refining
Hydrogen is essential to the petroleum refining industry
and is primarily used for desulphurisation of products www.niti.gov.in | www.rmi.org /
33Harnessing Green Hydrogen
such as diesel and petrol. Hydrogen demand depends on
two factors: 1) demand of petroleum products, which is
bound to increase considerably if efficiency measures
and low/zero-carbon alternatives are not adopted and
2) stringent policy actions on limiting the sulphur
content from petroleum products—the more stringent
the standards, the higher the requirement of hydrogen
in desulphurisation.
Ammonia
Ammonia, a compound made of nitrogen and hydrogen,
is extensively used in the chemical sector. Currently,
the majority of the hydrogen feedstock for ammonia is
mainly natural gas-based which can be replaced by the
renewable-based electrolysis process to form green
ammonia. Ammonia’s applications can span across
the following:
• Ammonia-derived fertilisers: Ammonia is majorly
used in the manufacturing of nitrogen-based (urea)
and other complex fertilisers such as diammonium
phosphate (DAP). The demand for nitrogenous
fertilisers is expected rise at the rate of 3 percent
compound annual growth rate (CAGR) over the
next decade, owing to rising population and
increasing demand for food.
31
• Ammonia as fertiliser: Although ammonia is
majorly used as feedstock for other fertilisers, it can
also be directly applied to soil, either in anhydrous
form or as aqua-ammonia (ammonia dissolved in
water). Anhydrous ammonia is readily available and
can be easily applied to soil,
however it requires
careful consideration in terms of its transportation
and storage.
32
Aqua-ammonia, on the other hand,
is relatively safer than the anhydrous form and can
be applied easily since it is not injected as deeply
as the anhydrous form.
33
• There is also the potential for the use of ammonia
as a hydrogen carrier and fuel for shipping.The REFHYNE Project in Germany, funded
by the European Commission’s Fuel Cells and
Hydrogen Joint Undertaking and supported
by Shell and ITM Power, aims to fully integrate
green hydrogen into refinery processes at an
existing refinery site. Construction began on
a 10 MW electrolysis plant in 2019 at the Shell
Rheinland refinery and is expected to begin
producing hydrogen in 2021. This pathway,
while a substitution for existing work in
refineries today, also offers a pathway to green
non-combustible products and an avenue for
refineries to move away from oil derivative
feedstocks. This stream of engagement offers
potential for the valuation of emitted carbon
and accordingly can link this to commodity
markets. In the lxong run, this pathway leads
to a carbon-neutral non-combustible refined
products production stream.
Several developers around the world have
announced projects to produce green ammonia.
Norwegian agricultural company Yara has
plans to convert an existing ammonia facility
to use green hydrogen as a feedstock, with
20,000 tonnes of capacity converted by 2023
and expected completion by 2026. Siemens is
establishing a Green Ammonia Demonstrator
in the UK that aims to show a full carbon-free
ammonia lifecycle from production to use as
a fuel to produce electricity. The ammonia,
in this case, essentially serves as an energy
storage mechanism for excess renewable
electricity. Renewable energy is used to power
all the stages of ammonia synthesis, including
the electrolysers to produce hydrogen, the
air separation unit to produce nitrogen, and
the Haber-Bosch process used to synthesize
ammonia. Other industrial ammonia producers,
including CF Industries in the United States and
Iberdrola/Fertiberia in Spain, have announced
plans to build electrolysers to synthesize
green hydrogen as a feedstock for ammonia
production. CF Industries, which has a target to
reach net-zero carbon emissions by 2050, will
build a 20,000 tonnes per year green ammonia
plant in Louisiana. The Iberdrola/Fertiberia
project will expand a 20 MW pilot plant to 800
MW of hydrogen production by 2027 with a
$2.1 billion investment.
Box 3
Box 4
Case Study: Refining
30
Case Study: Green Ammonia
34 www.niti.gov.in | www.rmi.org /
34Harnessing Green Hydrogen
Methanol
Methanol is primarily used to produce various chemicals
and solvents, and its use can be expanded as fuel for
transport in the form of various blends, marine fuel, and
cooking. Hydrogen is a main feedstock in the production
of methanol and, in India, is currently produced primarily
from natural gas. India currently produces only 13% of
its methanol consumption with a policy goal to increase
production through the Indian Methanol Economy
program. Future demand will rest on emerging demand
for speciality chemicals and solvents and the success of
the Indian Methanol Economy program.
Steel
Hydrogen demand for the steel industry is a matter of
technology competitiveness and fuel availability. Steel is
mainly produced from three main processes:
• blast furnace – basic oxygen furnace (BF – BOF),
which uses coking coal for reduction of iron ore;
• direct reduced iron – electric arc furnace/induction
furnace (DRI – EAF/IF), which can achieve the
reduction through use of either natural gas or coal
on pelletized iron-ore; and
• EAF/IF with scrap steel, where scrap or recycled
steel is directly heated via electricity to form steel.
The DRI process is where there is a potential role for
hydrogen to replace fossil fuels, mainly natural gas.
Most of the green methanol projects under
development are led by Carbon Recycling
International (CRI), which has projects under
various stages of development in Europe and
China. Its Emissions-to-Liquids (ETL) technology
utilizes CO
2
captured from industrial or other
sources and green hydrogen to produce low-
emissions methanol, which can be used as a
fuel or feedstock for other chemical products.
The North-C-Methanol project, a collaboration
between Proman, ENGIE, ArcelorMittal, and
others, is a large-scale demonstration project
located in Belgium and part of the North-CCU-
Hub Roadmap.
Methanol-to-olefin plants are emerging,
particularly in the APAC region, as effective
pathways for the production of common use
olefins found in plastics in particular. The
utilization of captured carbon and green
hydrogen to produce methanol creates a
pathway to plastics production that could
further reduce future need for fossil fuel
extraction, while developing a more complete
circular production pathway and creating a
recognizable value market for carbon.
Arising out of Sweden’s 2045 net-zero target,
the HYBRIT project in Sweden, a collaboration
between SSAB, LKAB, and Vattenfall, will
replace coking coal with green hydrogen in
the reduction process. Construction on the
pilot plant (costing ~$150 million) began in
2018 and operations started in August 2020,
with a goal to have demonstration completed
by 2035. Arising out of this effort, LKAB has
committed $47 billion to convert its operations.
Multiple pilot plants to demonstrate other
technologies are being built. ArcelorMittal
has several projects underway across Europe
that utilize green hydrogen in various ways in
primary steelmaking to reduce emissions. In
Bremen, Germany, a plant is planned that would
inject green hydrogen into the blast furnace.
The ArcelorMittal IGAR project in France is
developing a hybrid blast furnace process using
DRI gas injection and a plasma torch.
Box 5
Box 6
Case Study: Green Methanol
35
Case Study: Green Steel
36 www.niti.gov.in | www.rmi.org /
35Harnessing Green Hydrogen
Hydrogen’s role as a fuel for the transport sector
can extend beyond road transport to shipping and
aviation. Shipping and aviation sectors use heavy
fuel oil and jet fuel respectively. Moreover, there
are very few alternatives to decarbonize these
sectors, and they are less readily available and more
expensive than conventional fuels. Hence, hydrogen
or hydrogen-based compounds such as ammonia
or methanol can play a big role in decarbonizing
shipping and aviation.
On the shipping side, various efforts are underway
to decarbonize international maritime shipping led
by the International Maritime Organization (IMO).
IMO has set a goal of reducing international shipping
emissions to 50% of 2008 levels by 2050. A major
chunk of these emissions reductions can come from
ammonia as a shipping fuel. By 2050, 25% of the
fuel demand in this sector can be met via ammonia.
Ammonia has a competitive advantage when
compared with hydrogen—its higher energy density
makes it easier to store.
Another option is to power ships with fuel cells
powered by hydrogen, but that route is more geared
towards commuter ferries or short-
distance transport and competes directly with
battery-powered ships. In India, domestic coastal
and inland waterway shipping contribute to just 6%
of the total freight moved and is the least carbon-
intensive mode in terms of CO
2
emitted per tonne-
km of freight moved, even when powered with fossil
fuels. However, with the Indian government’s focus
on promoting multi-modal and inter-modal transport,
demand for shipping could rise in the future, meaning
increased emissions from burning fuel oil. Hydrogen
and ammonia can play a role, but there are still
significant challenges to their uptake including
high cost compared with conventional alternatives,
storage infrastructure requirements at ports, and the
need to change vehicle designs.
The aviation sector has the highest carbon emissions
intensity of any other mode of transport. With rising
income levels, the increase in tourism, and increasing
demand for faster deliveries by consumers, emissions
from the aviation sector will grow exponentially. By
2050, aviation will be the second-biggest emitter
of freight transport-related CO
2
emissions in India,
registering a 100-fold growth. Similar growth is
projected for passenger aviation as well.
The technology options to decarbonize the aviation
sector include 1) battery electric, 2) hydrogen-
powered fuel cell, 3) hydrogen-powered turbine,
4) sustainable aviation fuels made from waste and
agriculture residues, and 5) electrolytic hydrogen-
based synthetic fuels. No one technology stands
out as a single solution for decarbonizing the
aviation sector; each technology has its own merits
and challenges. For example, battery electric
and hydrogen fuel cells can deliver the maximum
decarbonization benefit per passenger-km or freight
tonne-km, however their use will be restricted to
short distance, smaller flights. The other three
technologies can be deployed for long distance-larger
aircrafts, however significant challenges exist due to
lack of storage infrastructure. High costs also remain
a barrier for all technologies.
Decreasing costs due to improved technologies and
economies of scale, policy push introducing demand
incentives, supply mandates and a carbon tax, and
innovative financing and business models can enable
decarbonization of aviation.
Box 7Beyond Freight—The Potential Role for Hydrogen in Aviation and Shipping
37
Long-Haul Freight and Heavy-Duty Vehicles (HDVs)
Like steel, hydrogen demand for long-haul freight
will depend on movement towards low-carbon
transportation and the competitiveness of technology
options with respect to diesel and against each other.
Two technology options exist to electrify HDVs: battery-
electric vehicles (BEVs) and fuel cell electric vehicles
(FCEVs). Both these technologies are complementary,
and their uptake will depend on technology merits,
refuelling time constraints, efficiency considerations,
costs, and duty cycles. www.niti.gov.in | www.rmi.org /
36Harnessing Green Hydrogen
Power Sector
High demand growth and renewable penetration
introduces the challenges and prospect of flexibility
and VRE integration. Hydrogen proponents have
also proposed the concept of power-H2-power as
another form to provide storage and flexibility. But
actual demand for hydrogen will be limited by its
competitiveness against other technologies such as
battery storage and demand response, in addition to
the unique nature of the country’s grid and emerging
supply and demand structure.
Potential future application – Electrofuels for
ground transportation
Electrofuels (e-fuels) are primarily hydrogen-based
fuels that are produced via hydrogen derived from the
water electrolysis process. The primary examples are
methanol and ethanol which can be blended with or
completely replace existing fossil fuels (with required
design changes) for powering vehicles. E-fuels can act
as a complementary technology to biofuels due to their
existing limitations around feedstock and applicability
in certain end use cases. In the near term, e-fuels can
be utilised as blended fuels with either petrol or diesel,
and there is a long-term potential of using them in
M100/E100 engines (100 percent methanol or ethanol
content). E-fuels have the following advantages:
• E-fuels can be produced at a lower cost in the near
future due to lower prices of renewable electricity
and declining electrolyser costs, hence outcompeting
other production processes.
• Reduction in well-to-wheel emissions — emissions
are reduced at the point of generation of the
fuel, owing to the use of green hydrogen. Even
tailpipe emissions are reduced on account of
reduced consumption of petrol or diesel.
Hydrogen’s potential as fuel for clean cooking
has been discussed and experimented with. But
given the distributed nature of cooking demand,
electrification is a better pathway for bettering
access to decarbonized cooking. Hydrogen could
Box 8Does hydrogen make sense as cooking fuel?
play a role through blending into existing city
gas distribution (CGD) network in urban areas.
But even there given hydrogen’s characteristics,
there is also a limit to blending in existing pipeline
infrastructure. Due to the low density and higher
diffusivity of hydrogen, existing gas pipelines
should be coated / made of different material to
withstand higher compression ratios. Furthermore,
rigorous testing is required to understand the
long-term impact of hydrogen, on materials and
equipment with leakage, flame stability, back firing,
ignition and must be investigated to ensure system
safety, efficiency and environmental performance.
Additionally, hydrogen specific furnaces and stoves
do not exist outside of prototypes. www.niti.gov.in | www.rmi.org /
37Harnessing Green Hydrogen
Exhibit 13Hydrogen demand outlook and potential green hydrogen share at cost parity (without policy intervention)
Source: MoS, MoC&F, MoPNG, IEA, TERI, BCG, World Bank, RMI Analysis
0.0
5.0
10.0
15.0
20.0
25.0
30.0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total Hydrogen Demand (Million Tonnes)
Green Hydrogen Share
2020204020502030
POWER
HDV
STEEL
METHANOL
AMMONIA
REFINERY
SHARE OF GREEN H2
Hydrogen Demand Outlook
As per our assessment, hydrogen demand can potentially grow more than fourfold between 2020 and 2050, amounting
to around 29 million tonnes by 2050 (Exhibit 13).
While steel and heavy-duty trucking will be the long-term driver for demand, in the near term, demand will likely be
driven by the more mature markets in industrial feedstock—ammonia and refining. Increasing consumption from these
two sectors can result in a demand of almost 11 million tonnes per year by 2030 from the current demand of around
6 million tonnes. Details of sectoral analysis are presented in Appendix B. www.niti.gov.in | www.rmi.org /
38Harnessing Green Hydrogen
The Potential for Green Hydrogen
Cost-competitive green hydrogen opens the possibility
for market development, especially in industries that
are already consumers of grey hydrogen. The share of
green hydrogen will depend on the cost of production
compared with alternative hydrogen sources, the share
of hydrogen cost in the end cost of the product, as
well any exogenous demand creation efforts that
may be imposed in the near term. Purely based on
cost-competitiveness, green hydrogen is expected
to dominate the hydrogen market in the long run.
Even in the 2030 timeframe, green hydrogen can
play a significant role for both existing brownfield
consumption and new greenfield investments. Almost
94% of hydrogen demand in 2050 can be met by green
hydrogen, up from 16% in 2030. The cumulative value of
the green hydrogen market in India could be $8 billion
by 2030 and $340 billion by 2050.
Refining and ammonia are the two sectors ripe for
near-term utilization of green hydrogen given the
already large share of hydrogen they are consuming
and are expected to consume in the near term. But new
hydrogen application areas like steel and heavy-duty
vehicles become much more prominent drivers for the
green hydrogen market in the long run, making them
ideal for small- and large-scale pilot development.
CO
2
and Energy Import Savings
This transition has significant impact on the
greenhouse gas emissions of the hard-to-abate sectors.
Cumulatively, between 2020 and 2050, India can
abate 3.6 giga tonnes of CO
2
emissions compared with
a limited hydrogen adoption case. While industrial
feedstock is an easier market, the majority of long-term
decarbonization potential lies in steel followed by heavy-
duty trucking, since their scale of demand is much higher.
When looked at from an energy security perspective,
domestically produced green hydrogen can translate
to a net energy import savings of $246–$358 billion
cumulatively between 2020 and 2050 ($3–$5 billion
between 2020 and 2030 alone). This is on account of a
reduction in both natural gas imports as grey hydrogen
is replaced with green hydrogen and oil imports as long-
haul freight transitions to hydrogen fuel cells trucks.
Exhibit 14CO
2
emissions reductions in 2050 due to green hydrogen uptake
Source: RMI Analysis
0
200
400
600
800
1000
1200
1400
1600
1800
2020 EmissionsRefinery Ammonia Methanol Steel HDVs 2050
Efficient
Emissions
2050
Business-as-usual
Emissions
CO
2
emissions (Million Tonnes)
HDV
STEEL
METHANOL
AMMONIA
REFINERY
CO
2
emissions reductions due to green hydrogen uptake in end use sectors www.niti.gov.in | www.rmi.org /
39Harnessing Green Hydrogen
Near-Term Market Development
Encouraging market development for green hydrogen will require further analyses than can inform decision-making.
Exhibit 15 lays out the relationship between the impact of hydrogen on the price of the final products of the end-use
sectors and their green hydrogen market potential by 2030 and 2040. End-use sectors should be assessed to identify
those ready for scaled consumption and those ripe for small- and large-scale pilot development.
Targeted Viability Gap Funding (VGF)
A targeted viability gap funding (VGF) mechanism that
can help address industry-specific cost differentials/
green premiums for some of the possible early markets
should be considered. As Exhibit 15 shows, refining
and ammonia could be ideal sectors for a targeted
VGF approach in the initial phase of green hydrogen
development. This is due to the current size of hydrogen
consumption and the potential to replace grey with
green hydrogen.
The impact of hydrogen on the price of refinery
products is much less than that of ammonia where
hydrogen as a feedstock constitutes almost 80%–90%
of the cost of end products like urea. From a government
expenditure perspective, the refinery sector is relatively
more ideal for VGF given that hydrogen contribution to
end product cost is only around 2%–4%.
But ammonia provides credible opportunity as well
given the large share of subsidy the government already
provides for urea imports. India currently imports
Exhibit 15Assessing opportunity for green hydrogen market creation by 2030
Source: RMI Analysis
Hydrogen share of product cost
Sector share of total green hydrogen demand
0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
5% 10% 15% 20% 25%30% 35% 40% 45% 50%
High cost, low impactHigh cost, high impact
Low cost, high impactLow cost, low impact
Bubble size indicated green hydrogen demand in million tonnes
*impact refers to impact of government support on demand creation
Methanol (for chemicals)
HDV
Steel
Ammonia
Refinery
2030
2040
0.5
1.5
3
5 www.niti.gov.in | www.rmi.org /
40Harnessing Green Hydrogen
almost 25%–30% of its annual urea consumption.
38
Directing part of the existing subsidy outlay towards
VGF for green ammonia production could also make
sense from an import substitution and supply security
perspective while making the VGF expenditure for
ammonia closer to being revenue neutral.
VGF can be directed through multiple economic
instruments such as depreciation benefits, tax benefits,
production-based incentives, and capital subsidies, as
Germany is currently promoting for electrolytic hydrogen
production. Another measure to incentivize industry is
carbon contracts for difference mechanisms or green
subsidies that cover the differential costs between
conventional and green hydrogen-based technologies,
improving the affordability of asset conversion. Lastly, a
production-linked incentive for end products like green
steel and green ammonia could be instituted.
The level of VGF should also be differentiated based on
whether these are targeted towards existing brownfield
assets or newer greenfield assets. Replacing grey
hydrogen in older plants is bound to demand higher
VGF due to depreciated assets, while newer plants will
demand lower VGF. For newer applications such as steel,
long-haul freight, and a city gas network, assessment
must be conducted to inform VGF potential in the medium
term against existing fuels that green hydrogen will
be replacing.
Hydrogen Mandates
A mandate-driven approach can also aid in market
creation. One way is to blend hydrogen with natural
gas by injecting it into existing natural gas pipeline
networks. This mode of blended hydrogen has recently
been featured in the national hydrogen strategies of
the Netherlands and Australia, in addition to a host
of small-scale pilot projects.
39
Blending can ensure
demand certainty for early investors in green hydrogen
production and could be crucial for early learnings and
scaling efforts. Also, at low blend volume, this strategy
could be very cost-effective for market creation.
Blending mandates can be put into effect for two major
sectors — industries that currently use hydrogen as a
feedstock and city gas distribution (CGD). Hydrogen
can be blended with natural gas for industries such
as ammonia, refining and methanol, as many of
these industries tend to along natural gas pipelines.
Additionally, hydrogen can also be blended with existing
city gas network of piped natural gas and compressed
natural gas.
Well designed blending mandates can complement
sector-specific VGF to create a high degree of demand
certainty for scaled deployment of green hydrogen.
Mandates can be driven by requiring all new greenfield
investment to use green hydrogen or by increasing the
blending of green hydrogen in existing brownfield units.
Exhibit 16 proposes such a potential mandate.
Exhibit 16Potential mandates for existing applications
Source: NITI Aayog
For new applications, an aspirational target-based approach that can inform future mandates should be applied.
Appropriate mandates could be designed in time to build markets in those application areas.
SectorTarget TypeMandateCut-off Date for the sector to go 100% Green
RefineryCorporate level targets 50% by 2030 2035
FertilizersImport substitutions 100% by 2030 2040 www.niti.gov.in | www.rmi.org /
41Harnessing Green Hydrogen
Industrial Cluster Identification and Development
VGF and mandates should also be suppplemented with geographical assessments to identify potential clusters around
existing factories, transmission infrastructure, and renewable hubs. Industrial clusters have been a common strategy
across many of the hydrogen roadmaps being developed, for example in the European Union (see Box 9).
Industrial clusters can help coordinate and concentrate
support to advance green hydrogen adoption. Providing
incentives and support to priority regions while creating
green hydrogen procurement quotas for industries
located in these clusters can solve demand and supply,
as well as alleviate finance constraints to accelerate
deployment. Several strategies (in Korea, Denmark,
EU, France, among others) have similarly focused on
supporting full value chains in high-potential regions.
Clusters will be essential in the near-term to guarantee
offtake certainty for early green hydrogen pilot
projects while reducing infrastructure costs. But in the
future, scaled industrial clusters could also become a
vector for demand aggregation, diversification of the
local industrial base using hydrogen, and lowering of
production costs due to emerging economies of scale.
As a new pipeline network emerges, or existing gas
pipelines become retrofitted and ready for hydrogen
transportation, these early clusters can also emerge as
green hydrogen industrial networks.
Cluster identification should be guided by concentration
of existing and expected end-use facilities and cost
of hydrogen production given local dynamics around
land and other resources. CEEW’s analysis presents
a possible early industry cluster in India focusing on
fertilizer and petrochemical in the western coasts and
iron and steel in the eastern belt.
41
A key conclusion
is that several of the most economically significant
clusters, from the perspective of hydrogen deployment,
are located close to some of India’s best renewable
resources (see Exhibit 17).
The European Union has historically focused on
the establishment of clusters as focal points for
industrial policy. Since 2008, the European Cluster
Observatory has mapped around 3,000 industrial
clusters—regional concentrations of specialised
companies and institutions that cooperate closely.
The EU sees clusters as playing a crucial role in
building collaboration, supporting innovation, setting
up transnational partnerships, and advancing the
carbon-neutrality agenda. The European Cluster
Collaboration Platform is an online hub for clusters
to develop partnerships, share knowledge with each
other, and participate in funding calls.
Europe's largest hydrogen cluster currently is the
NortH2 cluster in northern Netherlands. It was
launched by a consortium comprised of Groningen
Seaports, Shell Nederland, Gasunie, Equinor, and
RWE. It aims to produce hydrogen in Eemshaven,
Netherlands, using electricity generated by a mega-
scale offshore wind farm. The plan provides for a
large electrolyser and a smart transport network
using Gasunie's existing natural gas infrastructure.
It is expected to transport 1 million metric tonnes
of green hydrogen to industries in northern
Netherlands and north-west Europe annually by
2040.
Box 9Hydrogen Cluster Development in Europe
40 www.niti.gov.in | www.rmi.org /
42Harnessing Green Hydrogen
Exhibit 17Location of key industrial facilities
However, even clusters located away from India’s renewable-rich regions, for example, iron and steel clusters in Odisha,
still have access to large amounts of a high-quality solar resource.
42
Given that shipping electrons is always easier than
shipping molecules, emerging RTC renewables should also be looked at for hydrogen production even where renewable
resources may not be locally available.
Source: PPAC, NITI Aayog, CEEW www.niti.gov.in | www.rmi.org /
43Harnessing Green Hydrogen
Pilot and start-up scaling efforts through dedicated
hydrogen corridors
Given the nascency of the sector, pilots will be critical.
India can support prototype-stage projects to create
domestic supply chains and bring a local context into
innovation:
• In the short-term, demonstration projects can be
set-up either by government public sector undertakings
or by private entities with government encouragement.
The aim should be to address how to produce and
scale green hydrogen (see Box 10 for ongoing pilots
projects in India).
• Early pilots could be concentrated around existing
clusters of feedstock and petrochemical industries
highlighted above, followed by the steel sector. A
similar approach could be applied to transportation
by identifying and targeting major freight corridors
in the country in the medium to long term. Technology
demonstration pilots for FCEVs could also be conducted
on government offices or university campuses.
• Government could enable upscaling of lessons from
the pilots and demonstration projects by having a
centralized platform for collating and disseminating
results, as well as for hosting industry discussions
and dialogues.
Other Demand Creation Efforts
As sector use of green hydrogen matures from pilots,
the government should identify policy instruments to
encourage demand aggregation, including assessment
of any public procurement pathways. This can be crucial
in enabling scaled deployment. Further, introducing
voluntary purchase mechanisms and green certifications
for products such as green steel, green ammonia, and
green methanol can raise awareness among the end
consumers and enable a consumer-driven market pull
for green hydrogen in the long run.
Upside to Green Hydrogen Demand
All these market creation instruments along with favourable
policies around near-term cost reduction can result in a
substantial increase in green hydrogen demand by 2030.
The government is already taking steps to introduce
green hydrogen-based pilots in the country. The
government-led public sector undertaking (PSU),
Indian Oil, is at the forefront of the green hydrogen
revolution. It is planning to setup India’s first green
hydrogen unit for the Mathura refinery, which will
be used to process crude oil. Moreover, it plans
to utilize low-cost wind power from Rajasthan
(wheeling it to Mathura in Uttar Pradesh) to power
this green hydrogen plant. The organization has
also been conducting a pilot using hythane (H-CNG),
a blend of compressed natural gas (CNG) and
hydrogen. The pilot involved retrofitting 50 CNG
buses to test the feasibility of the H-CNG-powered
vehicles and their impact on emissions and fuel
economy. Another government-run PSU, NTPC,
has recently set up a tender to establish a first-of-
its-kind hydrogen refuelling station to be powered
entirely by renewables in Leh through a stand-alone
1.25 MW solar system.
Box 10Ongoing Demonstration Pilots in India
43
www.niti.gov.in | www.rmi.org /
44Harnessing Green Hydrogen
Under the FPS scenario, green hydrogen demand can be expected to almost double to 3.7 million tonnes from 1.7 million
tonnes in refence scenario (Exhibit 18). This additional demand will be critical in enabling the green hydrogen economy
to mature in the long term creating opportunities for both energy transition as well as industrial growth.
Exhibit 18The potential increase of the green hydrogen market under the FPS scenario in 2030
Source: NITI Aayog, RMI Analysis
Million Tonnes
Demand at cost parityPotential DemandUpside from incentives and mandates
RefineryAmmonia
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
HDV
STEEL
METHANOL
AMMONIA
REFINERY Manufacturing
Opportunities www.niti.gov.in | www.rmi.org /
46Harnessing Green Hydrogen
Manufacturing Opportunities
Beyond supply and demand, India’s robust economy and manufacturing and industrialization ambitions present other
opportunities to partake in the emerging global hydrogen economy. A robust market for green hydrogen translates to
a growing demand for production and consumption technologies such as electrolysers and fuel cells and an opportunity
for scaled manufacturing.
India’s Electrolyser Demand
In our reference case, India’s own internal market for electrolysers could be around $31 billion by 2050 representing
a demand of 226 GW (Exhibit 19). By 2030, India can expect a demand of 20 GW.
Exhibit 19Potential electrolyser market in India
There is significant near-term increase in the FPS scenario and demand of up to 44 GW can be expected by 2030
(Exhibit 20), provided VGFs, mandates, pilots, and cost reduction incentives can accelerate market development.
Early government efforts can help domestic manufacturers capture a significant share of the pie while potentially
emerging as a global manufacturer.
Source: RMI Analysis
0
50
100
150
200
250
Size (GWe)
Value (Billion US$)
204020502030
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
20
112
226 www.niti.gov.in | www.rmi.org /
47Harnessing Green Hydrogen
Technology Review and Implications
for India
The market for electrolysers is dominated by alkaline
and polymer electrolyte membrane (PEM) technologies
with advanced electrolyser technologies like solid oxide
and anion exchange membrane nearing commercial
deployment as well.
The fundamental components of the electrolyser consist
of the stack and a large array of balance of plant (BoP)
components. The actual splitting of water into hydrogen
and oxygen occurs at the stack level and is supported by
the various systems that fall collectively under the BoP.
Fundamental differences between PEM and alkaline
electrolysers are at the stack level (Box 11).
BoP components are common across both types of
electrolysers.
Exhibit 20The potential increase in the electrolyser market under the FPS scenario for 2030
Source: NITI Aayog, RMI analysis
The structure for both PEM and Alkaline
electrolysers is similar but there are a few
differences.
A PEM electrolyser relies on reversing the fuel
cell process and requires no electrolytes.
Box 11The Difference between PEM and Alkaline
Electrolysers
An alkaline electrolyser, on the other hand, is a
much more mature technology (it has been in
commercial application since the 1950s) but
requires an electrolyte liquid.
PEM stack components rely on rare earth metals.
The cathode and anode layers of a PEM stack
are created by depositing metals like iridium or
platinum on either side of the membrane. These
are the scarcest and most emissions-intensive
metals available. The bipolar plates of the PEM
stack are built using gold- or platinum-coated
titanium while the PTL can be built with titanium
or carbon cloth. Alkaline electrolysers rely mostly
on nickel whose supply is more diversified than
rare earth metals.
Compared with alkaline electrolysis, PEM
electrolysis has the advantage of quickly reacting
to the fluctuations typical of renewable power
generation. But PEM electrolysers tend to be
costlier. As electrolyser deployment moves towards
the gigawatt-scale market, the lower cost of
alkaline electrolysers is advantageous when it
comes to scale deployment.
RefineryAmmonia
Demand at cost parityPotential DemandUpside from incentives and mandates
0
10
20
40
30
50
GW
HDV
STEEL
METHANOL
AMMONIA
REFINERY www.niti.gov.in | www.rmi.org /
48Harnessing Green Hydrogen
Although the stack contributes close to 50% of the
total cost of both PEM and alkaline electrolysers, the
balance of plant (BOP) remains the predominant cost
contributor for both electrolysers (Exhibit 21). The
stack, power supply, and water circulation system
make up more than 80% of the cost. Power supply
alone accounts for 20%–30% of the total system
cost of electrolysers today. If seawater is utilized to
produce green hydrogen, the cost of desalination further
increases the water purification costs. This subsystem is
the second-largest cost component within the balance
of plant.
When it comes to the stack, the cost differs based on the
technology. The material intensity of PEM, especially
with its heavy reliance on rare-earth metals and precious
metals like gold and platinum, means that material costs
constitute a much larger share than manufacturing and
assembly costs. The easy availability of nickel coupled
with a simpler design makes alkaline electrolysers
50%–60% cheaper than PEM electrolysers. Hence
the stack cost of the alkaline electrolyte is not dominated
by the material costs but the manufacturing costs
amounting to 40% to the total stack cost.
The Domestic Manufacturing Opportunity
in India
Stack Manufacturing
When it comes to stack manufacturing, India’s initial
positioning is limited by import dependence for metals
like platinum, iridium, and even nickel. Even for new
technologies like solid oxide electrolysers, critical
materials are in short supply globally and almost 95%
comes exclusively from China. This import dependency
reduces near-term competitiveness, challenging private
sector interest in developing stack manufacturing
capabilities within the country.
Exhibit 21Cost breakdown of electrolyser (Adapted from IRENA
44
)
POROUS TRANSPARENT LAYER (PTL)
SMALL PARTS (SEALING, FRAMES)
STACK ASSEMBLY AND END PLATES
CATALYST COATED MEMBRANE
STRUCTURED LAYERS
BIPOLAR PLATES (BPs)
DIAPHRAGM / ELECRTRODE PACKAGE
PEMBalance of Plant
Cost of Electrolyser
Stack
components
45%
Balance
of Plant
55%
Alkaline
Power Supply
50%
53%
17%
3%24%3%
10% 8%
7%
Hydrogen
Processing
20%
Cooling 8%
57%
14%4%
Deionized
Water
Circulation
22% www.niti.gov.in | www.rmi.org /
49Harnessing Green Hydrogen
Additionally, there is the question of skilled labour for
stack manufacturing. While it warrants further research,
early conversations with electrolyser manufacturers
indicate that skilled labour may not be a problem, and
the country’s scientific and engineering professionals
are able to meet foreseeable demand.
45
Regardless,
further assessment is required on whether the current
level of technical education and research is providing an
adequate labour force as well as institutional knowledge
for the country to partake in the hydrogen economy in
general and electrolysers in particular.
But in the longer term, the country can still leverage
its expected growth in domestic green hydrogen
demand to encourage private sector interest. To begin
manufacturing electrolysers in-country, the government
could develop the following strategies:
• Identify and invest in research, development, and
commercialisation of low-cost electrolyser technologies
that require minimum rare earth metals.
• Secure a robust supply chain of metals and mineral
and identify electrolyser recycling strategies. These
strategies could be developed in parallel with the
domestic advanced chemical battery ecosystem,
which may need similar materials.
• Spur local demand for green hydrogen through
mandates and incentives. This will help create
demand certainty for manufacturers to build up
stack manufacturing capabilities.
Balance of Plant
Given that power supply, water circulation, and hydrogen
processing units account for 50% of the electrolyser
costs and with potential for further cost reduction,
India still can grow its position in the global electrolyser
market by emulating the progress it is making in the
electronics space. India’s electronics manufacturing has
grown from $29 billion to $70 billion in a span of five
years (2014–2019). This has resulted in India’s electronics
exports growing 39% year-on-year to $8.8 billion in 2019
coupled with a 5% contraction in electronics import.
46
This growth has been spurred by multiple Government
schemes that incentivized local manufacturing of
electronics including the Phased Manufacturing
Program, the Modified Special Incentive Package
Scheme, electronics manufacturing clusters, and the
National Policy on Electronics 2019. Those schemes,
along with the recently announced Production Linked
Incentive scheme for solar PV, automobiles, and batteries
are potential models that can encourage electrolyser
manufacturing in the near term.
47
While the country can leverage its experience in power
electronics manufacturing, efforts are required to
identify and establish standardized BoP components
for the global electrolyser market. This calls for room
for collaboration with global manufacturers to establish
standards for BoP components. Further, the supply
ecosystem in the country must be improved to increase
overall domestic value capture. www.niti.gov.in | www.rmi.org /
50Harnessing Green Hydrogen
Encouraging Electrolyser
Manufacturing
India’s electrolyser manufacturing ecosystem is at
a nascent stage today (see Box 12). Much is left to
be seen in how the government further encourages
both research and development efforts to indigenize
technologies, while encouraging development of start-
ups and OEMs engaged in electrolyser manufacturing.
Building the electrolyser ecosystem requires the
government to introduce direct and indirect incentives
to attract domestic and international players to create
electrolyser manufacturing capacity in the country.
A target-backed government incentive can greatly
accelerate manufacturing. The European Union has set
a target of 6 GW of electrolyser capacity by 2025 and
40 GW by 2030.
49
The ambitious targets are backed by
a functioning carbon trading mechanism and stricter
emission norms. Given the significant increase predicted
for electrolyser manufacturing in the next decade,
Indian manufacturing of electrolysers that support the
Indian green hydrogen industry could signal the advent
of a sunrise opportunity.
Initiatives like the United Nations Framework Convention
on Climate Change’s Green Hydrogen Catapult coalition
aim to drive down the cost of green hydrogen to less
than $2/kg by scaling up manufacturing of electrolysers
from the current estimated capacity of 2 GW to 25 GW
by 2026.
50
This growth is expected to materialize rapidly
with the commercial viability of hydrogen expanding
beyond the transport sector to the industry and building
sectors in the coming decade. This growth is attracting
global manufacturers like Orsted, ACWA Power, Envision,
Yara, Iberdrola, and Snam, which have already committed
ambitious manufacturing targets for electrolysers.
As per the Ministry of New and Renewable
Energy, India is already home to half a dozen
alkaline electrolyser manufacturers today.
However, the ministry acknowledges the need
for improving electrolyser technology to make
them more efficient and economical. A few
PSUs in India possess the manufacturing
capability for producing BoP components, but
the domestic production of electrochemical
stacks remains muted. The current electrolyser
demand in India for the chlor-alkali industry is
met by international manufacturers. Indigenous
solutions providers have also partnered with
international electrolyser manufacturers to
meet the domestic demand for hydrogen.
Beyond commercial hydrogen production
activities, there is significant research being done
across various institutions in the country. A few
notable research projects are mentioned below:
• Bhabha Atomic Research Centre (BARC) has
developed an alkali water electrolysis
technology for commercialization that can
produce 10 Nm3/hr of hydrogen.
Box 12Existing Electrolyser Manufacturing and
Research Efforts in India
48
• CSIR-CECRI, Karaikudi is designing
electrodes and electrolytes for hydrogen
generation using seawater with reduced
titania as a catalyst.
• The University of Lucknow is exploring
the use of transition metal mixed oxides
for alkaline water electrolysis along with
preparing electrodes using suitable
techniques.
• A consortium of institutes including IIT
Kanpur, IIT Madras, Dayalbagh Educational
Institute, IIT Jodhpur, CECRI Karaikudi, and
BARC are aiming to develop a scalable
design for a solar hydrogen generation
system using multiple technologies.
• ONGC Energy Centre alongside IIT Delhi
are utilizing Sulphur-iodine thermochemical
hydrogen cycle to generate low-cost clean
hydrogen fuel for industrial consumption. www.niti.gov.in | www.rmi.org /
51Harnessing Green Hydrogen
Encouragement towards electrolyser manufacturing
can ensure supply-chain security for the Indian
hydrogen economy and set up India to take advantage
of this emerging industry. Production and demand
side encouragements for green hydrogen as well as
direct incentives for manufacturing will be necessary.
Further, non fiscal measures like improving the
process for regulatory clearances coupled with
preferential treatment in public tenders can also
enable the environment for domestic manufacturing of
electrolysers.
Research and Development Program
Beyond encouragement for manufacturing a commercial
results-oriented research and development program
should be instituted focusing on electrolysers, fuel cells
(see Box 13 for a review of fuel cells), and associated
components looking at efficiency improvement, cost
reduction, stack life extension, and development of
a technology less dependent on metal and material
imports. This program can be a collaborative effort
by key industry players and renowned academic
institutions.
India should invest $1 billion in R&D by 2030 to catalyse
the development of commercial green hydrogen
technologies across the value chain. Instead of blanket
funding of research Institutions, the government can
implement a focused and commercial results-oriented
R&D program with well defined targets and rewards/
incentives for commercial technology development.
NITI Aayog recommends a mission mode R&D drive in
collaboration with the industries in the following area:
• Early-stage R&D to enable technologies that
reduces the cost of hydrogen delivery and
dispensing.
• Manufacturing techniques to reduce the cost
of automotive fuel cell stacks at high volume.
• R&D that reduces the costs of manufacturing
electrolyser components, using advanced
techniques such as additive manufacturing.
• Compression of hydrogen to 875 bar using
electrochemical cells and metal hydride materials.
• Improve efficiency and reduce the capital cost
of hydrogen liquefaction, using a vortex tube
concept.
• Establish the potential for magnetocaloric
technologies to liquefy hydrogen at twice the
energy efficiency of conventional liquefaction
plants.
• Secure critical mineral supply either through
indigenous development or global collaborations
for the supply chain of Nickel, Zirconium,
Lanthanum, Yttrium, Platinum, Iridium and other
key raw materials used in electrolysers.
A model R&D program is given below as an example of
such a target-based technology development program.
Exhibit 22Proposed technology innovation and scaling funding
Source: NITI Aayog
TypeInitiative Participants Public Investment Private Investment
International
Agencies
Early stage R&D Grand Challenge
Industry-Academia
Joint Teams
$400 Million $50 Million
Prototype and
Validation
Industrial Test Beds
National Labs or
Private Entities
$100 Million $5 Million $25 Million
Commerical
Scale Up
Hydrogen Venture
Capital
VC Funds$500 Million $300 Million $200 Million www.niti.gov.in | www.rmi.org /
52Harnessing Green Hydrogen
Fuel cells are in a sense the opposite of electrolysers.
Instead of splitting water into hydrogen and oxygen
using electricity, it houses an electrochemical reactor
that uses energy source natural gas or hydrogen as a
main source to produce electricity. They consist of an
electrolyte and two electrodes. Hydrogen molecules
react with the anode to form positive hydrogen
ions and electrons. The ions travel through the
electrolyte to react with air (oxygen) at the cathode,
while the electrons pass through a connected circuit
generating electricity. Finally, hydrogen ions and
electrons combine with oxygen at the cathode to
produce water.
Fuel cell technologies are similarly differentiated
based on the stack technology. PEM is the most used
fuel cell and is suited for transport applications due
to its lower operating temperature requirements and
quick start. The other technology options are more
suited for distributed power generation, except for
alkaline fuel cells, which are mainly used in military
applications.
Cost Implication
Manufacturing costs dominate the total cost of PEM
fuel cells, whereas the share of materials cost is
much lower. An increased scale in production can
bring the manufacturing costs down dramatically—a
45% reduction in fuel cell system costs is plausible
with scaling from 10,000 systems to 200,000
systems. India’s scale in terms of manufacturing
capability and demand and low-cost labour can help
reach economies of scale much faster. Investment
in larger equipment, advancement in manufacturing
operations, better utilization of machinery, and
aggregated procurement are the biggest factors to
reduce manufacturing costs related to fuel cells.
India’s Domestic Manufacturing Opportunity
RMI’s analysis indicates that fuel cell demand
through heavy-duty trucking alone presents a
$4 billion market opportunity by 2050 in India,
amounting to 10%–18% of global fuel cell demand
by 2050. Similar to electrolysers, this could create
opportunities for domestic manufacturing in India.
Market size and manufacturing opportunities for
fuel cells can be even greater if stationary fuel cell
systems also play a role in the future.
Box 13A Review of Fuel Cells
51 Export
Opportunities www.niti.gov.in | www.rmi.org /
54Harnessing Green Hydrogen
Export Opportunities
India’s domestic demand expectation will mean that it will not be a pure export-driven hydrogen producer like the
Middle East or Australia. But driven by the low cost of renewables in the country, India can still emerge as a one of
the most competitive sources for green hydrogen in the world (Exhibit 23). This will impact not just the prospects for
hydrogen exports but also the competitiveness of low-carbon products with embedded hydrogen such as green steel
and green ammonia.
Exhibit 23Comparison of levelized cost of green hydrogen in selected countries
Source: B N EF,
52
RMI Analysis
Hydrogen Export Opportunities
Disparity in sources and consumption of green hydrogen is bound to create markets for green hydrogen as a tradeable
energy commodity in the long term, albeit with challenges. We are already seeing early momentum as traditional
energy importers like Japan and South Korea, willing to pay premium prices, are increasingly pursuing the possibility
of importing hydrogen through ocean shipping (e.g., with Australia, see Box 14) either through LH
2
, LOCHs, and NH
3
.
European countries are also welcoming the prospects for both intra-regional and international hydrogen trade. Traditional
energy exporting regions like Australia and the Middle East are increasingly positioning themselves for hydrogen exports.
Box 14The Japan-Australia Hydrogen Energy Supply Chain (HESC) Project
53
Japan and Australia are currently working on a Hydrogen Energy Supply Chain (HESC) Project, the world’s
first endeavor to ship hydrogen over the ocean. It aims to safely produce and transport clean liquid hydrogen
from Australia’s Latrobe Valley in Victoria to Kobe in Japan. HESC hopes to demonstrate the viability of an
end-to-end hydrogen supply chain. The HESC Project is being developed in two phases, beginning with a
pilot, and moving on to commercialization. In the commercialization phase, coal from the Latrobe Valley
will produce blue hydrogen due to the addition of CCS. Australia aims to kickstart a hydrogen export industry
with this project. The pilot phase is to be completed in 2021 with commercial operation targeted for the
2030s depending on the results of the pilot.
0
0.5
1.0
1.5
2.0
2.5
3.0
South Korea
Japan
Philippines
Indonesia
Russia
Thailand
Malaysia
France
Germany
Turkey
Canada
Italy
China
Mexico
Spain
Saudi Arabia
U.S.
U.A.E.
Brazil
Australia
Chile
Sweden
Scandinavia
India (best case)
U.K.
2030 2050
LCOH ($/kg) www.niti.gov.in | www.rmi.org /
55Harnessing Green Hydrogen
Competitiveness of Indian Green Hydrogen Exports
Green hydrogen from India in 2050 could be remarkably competitive with hydrogen from countries like Australia
and the United States, which are already in conversation for ocean shipping of hydrogen. Even by 2030, Indian green
hydrogen could be competitive at the margin for select geographies.
Exhibit 24Potential delivered cost of Indian green hydrogen
Source: B N EF,
54
TERI, RMI Analysis
The prospect for pipeline trade to major ports and
energy trading hubs in the region like Singapore exists if
end-use sectors such as shipping and the airline industry
(in addition to refining) increase their use of hydrogen.
Challenges to Hydrogen Export
However, this brief analysis doesn’t highlight the various
techno-commercial challenges to international hydrogen
trade and India’s preparedness for it.
While marine hydrogen trade is theoretically promising,
many challenges persist. Unlike petroleum or natural
gas where resources are constrained by geography,
green hydrogen could be produced onshore, provided
resources (land, renewable electricity, etc.) are
adequately available. Export-dependent countries, willing
to pay a price premium, can also theoretically utilize
imported liquified natural gas (LNG) to produce hydrogen
onshore through steam methane reformation (SMR).
With LOHCs and hydrides like ammonia, the additional
energy cost of conversion makes cost considerations
necessary.
Pipelines, on the other hand, remain underdeveloped,
even nationally. As of 2016, there were only
approximately 2,800 miles of dedicated hydrogen
pipeline installed globally, with 1,600 miles of those in
the United States.
55
This contrasts with over 130,000
miles of onshore oil pipelines and 300,000 miles of
onshore natural gas pipelines in the United States alone.
Hydrogen blending is being proposed and utilized in
national natural networks but has not been used in
international trade yet. Due to their high capital cost and
long lifetime, hydrogen pipelines are typically reserved
for high volume flows. Lastly, the issue of hydrogen
embrittlement of steel can result in safety concerns and
potential cost considerations.
AUSTRALIA TO JAPAN (LH2) - 2050
FUTURE BEST CASE TRANSPORT COST
FUTURE BEST CASE DELIVERED COST
PRODUCTION COST (2030)
PRODUCTION COST (2050)
AUSTRALIA TO JAPAN - LH3 - 2030
US GULF TO KOREA (LH2) - 2030
US GULF TO KOREA (LH2) - 2050
AUSTRALIA TO SINGAPORE - PIPELINE - 2030
US GULF TO KOREA (LH2) - 2050
Pipeline - Chennai - SingaporePipeline - Mumbai - Oman
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
US$/kg
Shipping - LH2 - Chennai - TokyoShipping - LH2 - Chennai - Korea
Best case delivered cost of green hydrogen www.niti.gov.in | www.rmi.org /
56Harnessing Green Hydrogen
This challenge of infrastructure preparedness is
both global and local. India’s lack of experience as a
hydrocarbon exporter means there is a comparatively
steeper learning curve before it can effectively compete
with regions like Australia and the Middle East, which are
also equally blessed with the prospect of low-cost green
hydrogen. In the near-term this will involve assessment of
infrastructure readiness for hydrogen exports. Brownfield
assets including pipelines and LNG import terminals can
theoretically be repurposed for exports but given all
the challenges related to hydrogen transportation and
storage, a thorough assessment is warranted.
Near-term infrastructure development should also
be cognizant of such long-term prospects. In the
longer term, becoming an energy exporter will require
the country to invest in improving the business
environment, including aspects such as transparent
access to land, labour, and capital; a legal mechanism to
honour contracts; and a stable political environment.
Green Hydrogen-Embedded
Low-Carbon Products
Exporting hydrogen itself may have techno-commercial
challenges. But markets for products that rely on low-
carbon hydrogen as inputs (such as green steel and
green ammonia) can also be competitive opportunities
to leverage the green hydrogen potential of India.
Although it is early to ascertain how these markets
might evolve, this section helps illustrate the potential of
India’s low-carbon ammonia and steel in global markets.
Green Ammonia
Given the existing demand of hydrogen for ammonia
production, ammonia offers a more immediate path to
market than many other use cases. Beyond traditional
use cases like fertilizer and industrial feedstock,
ammonia is now being looked at for power generation,
marine fuel, and most importantly, as potentially the
most competitive energy carrier for the sea borne
hydrogen trade.
56
Unlike other “green” commodities,
the supply chain and logistics for ammonia is highly
developed and includes wide networks of ports, storage
facilities, and established shipping routes.
57
And given its
centrality in many sectors there are additional avenues
for moving up the value chain, boding well for the future
of a global trade in green ammonia.
A decarbonization agenda is shaping global demand.
Japan is expanding the use of ammonia as co-firing fuel
for its coal plants and targets annual consumption of 3
million tonnes by 2030 and 30 million tonnes by 2050.
58
Several companies are developing innovative engines
and turbines that can use ammonia as a feedstock.
59
Ammonia projects for marine fuel are also emerging.
India’s Potential
Given the cost sensitivity of ammonia to the price of
hydrogen, as discussed in Chapter 2, evolution of the
global green ammonia market will also rest heavily on the
prices at which green hydrogen can be delivered. In our
analysis, India’s early renewable LCOE advantage leads
to low-cost hydrogen and offers advantages in related
electrified processes. Today, ammonia produced by this
pathway would come at potentially a significant premium
over ammonia produced by conventional pathways.
However, through innovation and continued cost decline,
the pathway of production could become significantly
cheaper. This cost advantage could also potentially
improve India’s competitiveness for green hydrogen
trade, given ammonia’s role as an energy carrier.
Since infrastructure for ammonia production already
exists for the fertilizer industry, there are significant
synergies India should explore for expansion to cater to
an emerging global demand for green ammonia. www.niti.gov.in | www.rmi.org /
57Harnessing Green Hydrogen
Creating a Global Market for Green Ammonia
Building a global market for green ammonia will require
significant expansion of end use from more cost-
sensitive fertilizer and industry to energy applications,
which potentially could absorb slightly higher cost in
the right geographies. Identifying and encouraging
applications that can pay a higher green premium need
to be supported.
Decarbonization goals have and will continue to dictate the
longer-term direction of green ammonia. Therefore, early
leadership from prominent nations and clear alignment
in global policy direction is needed to provide the right
signal for the private sector to invest in market building.
To sustain and grow the market, significant innovation and
lowering of capital and energy cost will be required. This
could involve instituting research and development and
incentive mechanisms at a multilateral level. Mechanism
like carbon prices can also provide much needed levelling
of the economic gap for many of the end uses.
Green Steel
There is a tacit recognition of steel being an increasingly
important and viable pathway for hydrogen use.
DRI technology is already in use through natural gas,
and the first commercial pilots for hydrogen DRI are
already running. Major steel producers have announced
their foray into green steel, with seven out of the ten
biggest steel producing countries initiating green steel
projects.
60
Most of the investments are concentrated in
Europe with Sweden leading the way.
61
Swedish green
steel start-up H2GS AB recently raised $105 million
targeting an annual production of 5 million tonnes by
2030.
62
India’s own Tata Steel has announced plans for
green steel in its UK plants.
63
Decarbonization seems to be the biggest driver for this
shift and most projects are in countries with aggressive
CO
2
reduction targets. But the steel mills of progressive
companies that currently invest in and commit to
low-carbon production only represent 8% of global
steel production. A 100-fold step-change in the pace
of transition is needed for the steel industry to adhere
to a 1.5
°
C pathway.
64
Given project lead-time and the
long lives of steel mills, there is a need for immediacy in
initiating this transition.
Exhibit 25Cost comparison of green ammonia
Source: RMI Analysis
-80%
80%
100%
120%
-60%
60%
-40%
40%
-20%
20%
0%
202020302050
Discount / Premiun
AUSTRALIA
CHINA
INDIA
Comparison of potential green ammonia production cost
(against benchmark ammonia prices of USD 500/tonne) www.niti.gov.in | www.rmi.org /
58Harnessing Green Hydrogen
Steel is a traditionally tight margin market. Thus prices reflect a very tight capacity to absorb variable costs. In our
assessment, the same advantage of low hydrogen cost that allows India a potential advantage in manufacturing
ammonia creates a pathway for steel. This is further strengthened when considering the significant volume of
electric arc furnaces in use in India today (around 56% of current fleet)
66
that could be used in DRI crude production.
Additionally, while not modelled, the potential to utilize slack capacity in these EAFs would further reduce the cost points.
Creating a Global Market for Green Steel
Given the importance of steel to industrialisation, and the economics of multiple sectors, building a global green
steel market will require coordinated policies, pooling of investment and research and development resources,
harmonisation of product and process standards, and significant transition financing. RMI lists the following set of
interventions that could encourage this transition:
India’s Potential
This recognition bodes well for the future of the global green steel market. The only question is when it will start
making economic sense for scaling this transition. Hydrogen-based steel is expected to be cost-competitive between
2030 and 2040 in Europe.
65
But this scenario can be accelerated if an adequate carbon price is introduced or if the
price of hydrogen drops substantially.
Exhibit 26Cost comparison of green steel
Source: RMI Analysis
AUSTRALIA
CHINA
INDIA
-40%
40%
-30%
30%
-20%
20%
-10%
10%
0%
202020302050
Discount / Premiun
Comparison of potential green steel production cost
(against benchmark hot-rolled steel prices of USD 500/tonne) www.niti.gov.in | www.rmi.org /
59Harnessing Green Hydrogen
Key Takeaway
This preliminary analysis effort is not sufficient
to provide granular justification of specific cost
points, but the trend indicates the potential areas of
advantage that India could begin to leverage today.
The continued drive towards low-cost renewables
further supports the expected declines in electrolyser
capital expenditures and improvements in efficiency
that will drive to significantly more competitive pricing
for export hydrogen and commodities. Although India
would appear to have some advantage, these will be
significantly competitive markets internationally as
similar cost declines materialize in other countries.
Flexibility and nimbleness will be required to realizable
this advantage in the long term.
Ultimately, this export competitiveness circles back
to market creation to enable scaled deployment of
green hydrogen so that price decline expectations
can be met. In the medium term, export projects can
potentially serve as a market creation mechanism for
green hydrogen production. Green ammonia can be an
ideal product since India should already be targeting
ammonia for fertilizer production. In due course, India
can also pre-empt the green steel market through
export-oriented pilot projects and manufacturing
schemes. Government-to government cooperation
must be leveraged to develop collective frameworks
and labelling and standards around green hydrogen
and embedded products.
Policy Intervention
• Industry self-regulation and decarbonization commitments of critical scale
• Carbon taxes or equivalent mechanisms to reduce the cost advantage of high-carbon manufacturing
• Import tariffs based on carbon content to protect the local market from carbon leakage (i.e., competition from
high-carbon import)
• Carbon performance requirements in government and/or private procurement
Finance Intervention
• Government or voluntary support to lock in value premium for low-carbon steel production to reduce
uncertainty for investors in emerging technology
• Late stage R&D support for commercialization of technologies currently in pilot stage
• Investor pressure on steel companies to disclose and improve their carbon performance
• Securitization programs or other financial tools to manage the potential write-down value of high-carbon
production assets
Source: RMI
67
Exhibit 27Interventions towards a global green steel market
Market Information
• A differentiated low-carbon steel product to enable the supply-demand dynamic to create price premium for a
higher-performing supplier
• Asset portfolio differentiation to reduce risk exposure to medium-to-long-term market development toward a
low-carbon future
• New vehicles to scale intellectual property (IP) beyond single entitie www.niti.gov.in | www.rmi.org /
60Harnessing Green Hydrogen
Box 15Financing the Hydrogen Transition
68
Enabling India’s hydrogen transition will require an increased access to and flow of finance on part of several
stakeholders. Different stakeholders have different roles across technology stages due to differing risk
appetites and investment horizons. Considering these roles help define the most effective ways for each
stakeholder to finance green hydrogen. Mobilising finance will be particularly important to ready the market
for achieving large-scale deployment.
Public Finance
Government expenditure and publicly owned bodies are crucial to every stage of technology innovation due
to longer-term investment outlooks and greater tolerance for uncertainty. Governments can provide grants
and loans to start-ups and projects, support entrepreneurs through incubators and investor networks, and
put in place regulations that manage first-mover risks. They are crucial source for concessional finance to
bridge markets and support scale-up. Government can also use public procurement and purchase incentives
to create demand in niche markets and “crowd in” private investment.
Globally, governments are moving towards supporting commercialisation and demonstration of entire value
chains, often through public-private partnerships. Nations are increasingly using regions, cities, or industrial
clusters as focal points of financing. In addition to direct support and programs, public financial institutions
are being engaged to support the transition.
Multilateral Finance
Multilateral development banks (MDBs) and climate finance institutions can help catalyse technological
adoption across stages in partnership with public and private actors. MDBs can provide venture capital and
investor networks to entrepreneurs and projects, and support governments in developing enabling policies/
regulations. They can also explore support to demonstrations and pilots with industry actors. MBDs are also
crucial for concessional finance and can capitalise guarantees and risk-sharing facilities to support scale up.
They can also provide directed lending to local financial institutions. Although interest in hydrogen has been
growing, substantial funds have not yet been mobilized.
Private Finance and Industry
Private investment and business input is essential to developing a robust market, spreading market
awareness, and creating space for evidence-based policymaking. Corporate venture capital can incubate
applications of green hydrogen and provide opportunities for scale-up. Industries can finance in-house pilots
and first movers, possibly via public-private partnerships. Further, the larger financial industry can adjust
investment criteria and build capacity for maturity, engaging in risk-sharing and blended finance models.
They can also develop project finance models for green hydrogen. Private equity is slowly being mobilised,
signified by the launch of HydrogenOne Capital— the world’s first hydrogen-dedicated investment fund,
worth $315 million. Project finance, although a viable financial mechanism for funding hydrogen projects, is
still at early stages of exploration.
Policy and regulatory risks are seen to constrain private investment in hydrogen projects, especially in
nascent markets such as India. Hydrogen has limited commercial viability at this stage due to higher upfront
costs, longer payback periods, and unproven returns. But this creates an opportunity for a national program
to prime India through the design of de-risking schemes such as guarantees, first-loss tranches, and
concessional insurance while simultaneously building the capacity of public and private financial institutions. Steps to make India
a global hub of
green hydrogen www.niti.gov.in | www.rmi.org /
62Harnessing Green Hydrogen
Exhibit 28Potential direction of a National Green Hydrogen Roadmap
Source: NITI Aayog
Steps to make India a global hub of green hydrogen
The analyses and discussions presented in this report are only meant to highlight the opportunities that green
hydrogen presents for India for decarbonization, manufacturing, and exports. Real action is required for the country
to truly benefit from these opportunities.
This chapter distills the insights into ten actionable recommendations that can lead to a National Action Plan on
Green Hydrogen to guide and enhance the National Hydrogen Mission.
69
1. A detailed roadmap focused on all aspects of ‘Green Hydrogen’
The recent announcement of the National Hydrogen Mission signals the right intent but it needs to be complemented
with further policy direction in the form of a national roadmap/strategy. The emphasis of this roadmap should be to
elaborate on the government’s vision for green hydrogen in multiple sectors with timelines and investment aspirations
given the long-term cost advantage and multiple benefits that we have established in this report. This will improve
investors’ confidence and will converge the entire value chain and the various government agencies towards a
singular vision.
2020-25 2025-30 2030-40 2040-50
NH
3
NH
3
Enabling Green Ammonia for exports
Refinery
Ammonia for fertilizer
Green Steel for exports
Domestic Green Steel
Heavy Duty Trucking
• Seasonal storage and
other energy applications.
• Ships and airplanes.
City Gas Distribution (CDG) blending
Limited scale-upPilots
Pilots
Pilots www.niti.gov.in | www.rmi.org /
63Harnessing Green Hydrogen
2. Establish an aspirational cost-reduction target
and initiate supply-side intervention for achieving
cost reduction of green hydrogen
Enabling this roadmap with require both demand and
supply side interventions. In tandem with cost reduction
targets in the roadmap, the government should also
focus on enabling a cost reduction pathway for green
hydrogen to be produced in the country. The current
Green Hydrogen policy lays out adequate measures
focusing on inter-state transmission (ISTS) charges
waiver and open access for green hydrogen and green
ammonia production. It can be further improved by:
3. Initiate mandates and incentives towards a
visionary target of 160 GW of green hydrogen
production capacity including 100 GW of exports
In the demand sector, the government should set a
visionary target complemented by strict mandates
and adequate VGFs on more immediately addressable
end-use demand.
End-use sectors should be further assessed to identify
those sectors ready for scaled consumption and those
ripe for small- and large-scale pilot development.
They should also be supplemented with geographical • Reduction or exemption of tax and duties like the
GST and custom duties;
• Dollar-based tariffs for green hydrogen like the
standard practice in the oil and gas sector; and
Other measures such as revenue recycling of any
carbon tax, low emission PPAs, and avenues for
firming electricity supply including discounted grid
electricity to complement VRE generation.
To further motivate the private sector, the government
should establish an aspirational price decline target.
Such a target is proposed below:
Year202520302050
Green H2 Price$1.50/kg$1/kg< $1/kg
Exhibit 29Proposed aspirational hydrogen price targets
Source: NITI Aayog
assessments to identify potential clusters around
existing factories, transmission infrastructure, and
renewable hubs. Such cluster identification can also
include the prospect of exports.
A plan should also be set to propose clear mandates
around hydrogen blending in existing and potentially
future consumption sectors. This will provide demand
certainty for early green hydrogen projects and
encourage early market development. Potential
mandates being proposed by NITI Aayog are shown in
Exhibit 30.
Exhibit 30Potential mandates for existing applications
Source: NITI Aayog
SectorTarget TypeMandateCut-off Date for the Sector to go 100% Green
RefineryCorporate level targets 50% by 2030 2035
FertilizersImport substitutions 100% by 2030 2040
For new applications, where the viability of using green hydrogen is still nascent, necessary incentives should be
designed. One example is a PLI scheme for green steel targeting export markets. NITI Aayog is proposing the several
visionary targets for new applications (Exhibit 31). www.niti.gov.in | www.rmi.org /
64Harnessing Green Hydrogen
Year
Exhibit 31Aspirational targets for new applications
Source: NITI Aayog
Sector TypeTargets
SteelOld plants
Fleet level carbon intensity by 2035 should be less than 2 tonnes of
CO
2
per tonne of steel
New capacity
At least 20 million tonnes of green hydrogen- based green steel to be
made in India primarily for exports
City Gas Distribution (CDG) Pilot and subsequent scale-up 10% blending by 2025 and 20% by 2030
Green AmmoniaExports
25 million tonnes of exports to countries such as Japan, Korea, and
the European Union
Heavy-Duty Vehicles (HDVs) Pilots on specific routes
1,000 trucks, 50 boats, and 10 aircrafts to be piloted by 2030. Three
hydrogen corridors to be developed across the country based on
state grand challenge.
Power
Allow participation in RTC
tenders
Where economics makes sense, allow hydrogen to compete with other
storage technologies in Round the Clock tenders by SECI.
Box 16Assessing Viability Gap Funding for Exports
India has the potential to become a major exporter of green hydrogen-based products, given a strong base
of manufacturing excellence and ample availability of cheap renewable sources. However, the current high
cost of green hydrogen compared with grey hydrogen will act as a major roadblock for India to transition to a
global force in green hydrogen production and consumption. One policy instrument that can enable cost parity
of green hydrogen with grey is VGF, where a developer setting up a green hydrogen plant would be provided
marginal funding so that the green hydrogen price would become equivalent to grey hydrogen prices.
Since exports provide a strong potential for scaling green hydrogen uptake and fall within the priorities of
Government of India, an analysis has been developed to assess the amount of VGF required to match India’s
green hydrogen export aspirations. This assessment is an illustration and similar methodology can be followed
to assess VGF for other end uses.
Three scenarios for green hydrogen prices are assumed (representing the lower, middle and higher end
of green hydrogen prices previously shown in Exhibit 11 of this report). In each scenario, the price of green
hydrogen in a given year is compared against a target grey hydrogen price in that year. Then, the required
electrolyser price to reduce the green hydrogen price to the target price is assessed. The difference in the
upfront electrolyser prices multiplied with the electrolyser capacity in that year gives the yearly VGF
required. This process is repeated for each consecutive year. The electrolyser capacity for this analysis is
based on the target of 95GW by 2030. Moreover, the starting year for VGF is 2024, with ending year
differing in each scenario. www.niti.gov.in | www.rmi.org /
65Harnessing Green Hydrogen
Year
Exhibit 33Resulting cumulative electrolysis capacity targets
Source: NITI Aayog
Source: RMI Analysis
MarketTargets for cumulative electrolysis capacity by 2030
Green Hydrogen
Demand Targets
Addressable demand (RMI) 20 GW
Initiatives-based Demand45 GW
Exports aspiration95 GW
Total160 GW electrolysis
Exhibit 32 shows the VGF required for exports along with associated electrolyser capacity in the three
scenarios. Overall, a range of $1.4 billion - $5 billion will be required in VGF for India to match its aspirational
electrolyser targets for exports. It’s also interesting to look at why and how VGF is different for each scenario.
In scenario 1, where price declines for green hydrogen are happening at the fastest rate, the VGF will only be
required from 2024 to 2026. This is mainly because from 2027, green hydrogen prices will be less than the
target grey hydrogen price, negating the need for VGF. Moreover, the electrolyser scale till 2026 is around
10 GW of cumulative capacity. In scenario 2, the VGF requirement runs for four years, from 2024 to 2027.
In this scenario, the cumulative VGF requirement is $ 3 billion, which is twice the requirement in scenario 1.
This is because of two reasons – 1) the VGF is for four years instead of three years, because the price parity
is reached from 2028, instead of 2027 as in the first scenario and 2) cumulative GW capacity is also higher
because of added capacity in the year 2027. Similarly, VGF is the highest in scenario three because price
parity of green hydrogen happens in 2029, thereby necessitating the requirement of $5 billion across five
years (2024 – 2028).
Exhibit 32VGF and electrolyser capacity for exports
6
5
4
3
2
1
0
10
20
30
40
50
0
VGF ($ billion)
Electrolyzer capacity (GW)
Scenario 1Scenario 2Scenario 3
$1.4 billion
$3 billion
$5 billion
VIABILITY GAP FUNDING (VGF)
CUMILATIVE ELECTROLYZER CAPACITY www.niti.gov.in | www.rmi.org /
66Harnessing Green Hydrogen
Exhibit 34Visionary 2030 electrolysis target for green hydrogen production
Source: NITI Aayog
GREEN HYDROGEN EXPORTS
PRODUCT EXPORT INCENTIVES
PILOTS
MANDATES / VIABILITY GAP FUNDING (VGF)
ADDRESSABLE DEMAND (RMI)
0
20
40
60
80
100
120
140
160
180
RefineryMethanolSteelHDVs CGDVisionary
Demand Target
Exports
(other H2 carriers)
Ammonia
GW of Electrolyzer Capacity
Million tonnes of H2
41 160
5
0.2
0.5
12.3
31
15
69
0
2
4
6
8
10
12
14
4. Set-up visionary electrolyser manufacturing
capacity target of 25 GW for 2030 coupled with
supportive manufacturing and R&D investments
Given how important electrolyser cost is to the
cost-reduction pathway for green hydrogen and the
significant manufacturing opportunity it represents,
the roadmap should identify a timeline and scale of
maunfacturing support for electrolyser. India should
envisage a production capacity accounting not only for
Indian demand, but also for burgeoning global demand.
Radically improving the speed of regulatory clearances
coupled with preferential treatment in public tenders will
help catalyse local manufacturing.
The report predicts a significant increase in electrolyser
manufacturing in India in the next decade. India
should look at a minimum target of 25 GW by 2030.
The manufacturing of electrolysers to support the
Indian green hydrogen industry could signal the
advent of a multibillion-dollar sunrise opportunity with
significant export potential. In addition to electrolysers,
manufacturing of necessary value chain components
such as pipes, cylinder storage, compressors, heat
exchangers, nozzles, hoses etc should be encouraged
using adequate local value creation initiatives.
India should invest $1 billion in R&D by 2030 to catalyse
the development of commercial green hydrogen
technologies across the value chain. Industry and
academia should be ecouraged to particiapte together
as teams in well capaitalised grand challenges with
specific aspirational targets. R&D in alternative clean
hydrogen production processes like bio-hydrogen
technologies should also be encouraged.
5. Initiate green hydrogen standards and a labelling
programme
While the definition of Green Hydrogen has been
established in the policy, it is important to undertake
immediate actions on standard development and
harmonisation:
• Though standards are already available for grey
hydrogen, they are designed for limited industrial
use. It is important to construct new hydrogen
standards keeping in mind the widespread use of
hydrogen across sectors.
• Standards for new products such as electrolysers,
fuel cells, and other new products are required.
• A digital (AI/ML equipped) labelling and tracing
mechanism certification of origin should also be
initiated for ascertaining the green credentials of
all supply route of hydrogen including electrolytic,
fossil fuel based and bio based hydrogen.
• Government-to-government mechanisms must be
utilized towards initiating global regulations and
standard harmonization. www.niti.gov.in | www.rmi.org /
67Harnessing Green Hydrogen
Exhibit 35Policy driven demand targets of major import
focused countries
Region 2030 2050
Japan 3 MMTPA 20 MMTPA
South Korea 3.9 MMTPA 27 MMTPA
Germany 2.7 - 3.3 MMTPA
• Public entities such as BIS (Bureau of Indian
Standards) and PESO (The Petroleum and
Explosives Safety Organization) are expected to
take a leading role in this process.
6. Promotion of exports of green hydrogen-embed-
ded products and green hydrogen through an
international alliance
Exports of green hydrogen-embedded products in the
near term and of green hydrogen itself in the medium
to long term could also serve as important levers for
market creation and participation in the emerging
global green hydrogen market. The government
must explore forming government-to-government
partnerships with target geographies such as Japan,
Korea, Germany etc and integration of hydrogen into
existing energy and industrial partnerships globally.
This should include developing collective frameworks
and labelling and standards around green hydrogen and
hydrogen-embedded products like green steel and green
ammonia. The government should also explore near-
term incentives around green ammonia and green steel
production through public incentives to bridge the initial
viability gap.
7. Investment facilitation
The government has a large role in providing financial
certainty to early adopters of energy transition
technologies. In the near term a credit worthy offtaker
like SECI can be nominated to aggregate demand in
the initial period. In the long run, a smooth and market-
oriented green hydrogen industry should be developed.
Efforts should be made to ensure availability of long
tenor and low-interest finance for viable green hydrogen
projects. Developing a functioning carbon market can
also accelerate decarbonization of hard-to-abate sectors,
thereby making green hydrogen projects financially
more viable in the process. This will help create a more
predictable cash-flow for early adopters without loss
to the Indian exchequer, while making them more
competitive with existing carbon-intensive processes.
It is estimated that more than $250 billion (INR 18 lakh
crore) investment is required just to meet the 160 GW
electrolysers target (for financing the electrolysers and
associated renewable capacity).
70
It is critical for India to
take a leading role in accessing low-cost climate finance
through either multilateral institutions or by capitalising
on bilateral agreements with developed nations to
access part of the $100 billion/year commitments made
during COP16.
8. Encourage state-level action and policy making
related to Green Hydrogen
To ensure a widespread adoption of new technologies,
national and state-level policy decision-making need
to go hand in hand. It is evident from policy efforts
on electric vehicle (EV) adoption in India, where
various states have launched their own policies to
complement national-level policies, that dedicated
action is important at the state-level. Similarly, all states
should be encouraged to launch their own state-level
green hydrogen policies. Since each state is unique,
the policies can be targeted based on their needs and
strengths, where some states could focus on low-cost
green hydrogen production either through electrolytic
or bio-based routes, while others could focus on demand
clusters, etc.
9. Encourage capacity building and skill
development
Building a robust hydrogen economy is going to be new
to India. This will necessitate appropriate and rapid
skills development across the ecosystem including
government, industry, and academia. While technology
knowhow is essential, focus must go beyond to include
business models, policies, and geopolitics. A scalable
skills programme will have to be designed, developed,
and deployed rapidly. www.niti.gov.in | www.rmi.org /
68Harnessing Green Hydrogen
10. Construct an inter-ministerial governance structure
Considering the multi-sectoral impact of the hydrogen economy, governance of the transition efforts will be critical.
An interdisciplinary Project Management Unit (PMU) with globally trained experts must be created which can dedicate
fulltime resources to effectively implement the mission. The PMU must be nimble enough to adapt to global trends in
this fast-evolving sector. At the policy level, an inter-ministerial mechanism should be instituted to coordinate across the
various line ministries’ and departmental efforts required to achieve the target of the mission. Each co-chair of the inter-
ministerial mechanism would have a specific target to achieve. Conclusion www.niti.gov.in | www.rmi.org /
70Harnessing Green Hydrogen
Conclusion
Hydrogen can play a critical role in India’s energy
transition by enhancing its industrial competitiveness in
an increasingly decarbonizing world, boosting economic
development, reducing CO
2
emissions, and improving
public health and quality of life. Major countries around
the world are placing big bets and investing in hydrogen-
based technologies, and India can play a leadership role at
the global level in moving forward the hydrogen economy.
The biggest value proposition of hydrogen is in
decarbonizing the hard-to-abate sectors. Historically,
these sectors have been difficult to address because of a
lack of technically and economically feasible technologies.
Hydrogen can address many of these challenges and play
a complementary role to other efficiency measures to
effectively decarbonize these sectors.
Decreasing costs and an increase in renewable electricity,
along with high-scale manufacturing and technology
improvements in electrolysers will bring the cost of
green hydrogen down in the near future, making it cost-
competitive with existing technologies and fuel options.
With increased pressure on industries such as steel,
refining, and ammonia to reduce their carbon footprint
and de-risk their investment, hydrogen’s importance and
scale are bound to increase.
Apart from fulfilling national goals around reducing
emissions and enhancing domestic manufacturing,
hydrogen paves a way for India to become a global
powerhouse of zero-carbon embedded export products.
Products such as green steel and green ammonia present
an early mover opportunity for India, given India’s
capability and resources to produce them at a cheaper
rate than peer nations such as China and Australia.
Significant challenges need to be addressed to enable this
hydrogen transition. Costs of production are currently
higher, making all green hydrogen-based products more
expensive than fossil fuel-based alternatives. Transporting
and storing hydrogen are costly, and significant build-out
of infrastructure is required to bring down the costs of
delivered hydrogen. Regulations and standards are still
not clear, and financing remains a big challenge.
Key actions are required by policymakers, industry
players, and financial institutions to enable a hydrogen
economy in India. Significant R&D funding geared
towards hydrogen production and applications can help
in technology improvements and reduce costs. A public-
private partnership using these resources to conduct
high quality research, develop pilot projects, test
feasibility, and finally scale deployment can be a first
key step towards widespread adoption of hydrogen.
Policy push is needed both on the demand and supply
side. Demand incentives to ease the barriers of high cost
can enable initial market creation and can be phased out
as the market matures. Simultaneously, there must be a
push on the supply side, combined with infrastructure,
to provide green hydrogen at scale. This can be achieved
with a combination of production-linked incentives for
electrolysers and fuel cells, and requirements for the
industry and private players to deploy these technologies.
While initial deployment can happen in certain end uses
that use hydrogen as a feedstock such as ammonia,
methanol, or refining, it’s important to expand the
applications into other sectors to achieve bigger scales.
Standards and regulations around hydrogen production
and use should be revisited, and implementation of
new regulations and standards should be prioritized to
enable a quick transition to a hydrogen economy.
Financing hydrogen production and applications is
also a key component of this transition. Risk mitigation
measures for industry players is crucial. This can be done
by providing concessional funding, educating and building
capacity for industry and public and private institutions
to enhance multi-stakeholder collaboration, and shared
learning on technology readiness and demonstration
projects. These measures along with special funding for
domestic pilot projects can increase industry and lender’s
confidence and help ease this transition.
India has a unique opportunity to become a global
leader in the hydrogen energy ecosystem. With proper
policy support, industry action, market generation and
acceptance, and increased investor interest, India can
position itself as a low-cost, zero-carbon manufacturing
hub, at the same time fulfilling its goal of economic
development, job creation, and improved public health. www.niti.gov.in | www.rmi.org /
71Harnessing Green Hydrogen
Appendices
Appendix A: Global Examples of Hydrogen Strategies and Roadmap
European Union
Current Hydrogen
Demand
Not AvailableFocussed
Hydrogen
Colour/
Source
Low Carbon - Blue / Green
Policy Target
Demand
6GW capacity by 2024; 40 GW by 2030
10 MMTPA green H2 by 2030
Capital Allocated
(US$)
609 billion
Export/
Import Focus
NA
Demand Focus
(Industry)
1. Chemical feedstock
2. RefiningStrategy Features
1. Market development timeline
2. Direct investments
3. Other economic and financial mechanisms
4. Legislative and regulatory measures
Demand Focus
(Transport)
1. Medium and heavy duty
2. Buses
3. Rail
Demand Focus
(Others)
NA
Germany
Current Hydrogen
Demand
1.65 MMTPAFocussed
Hydrogen
Colour/
Source
Carbon free - Blue / Green
Policy Target
Demand
2.7 - 3.3 MMTPA by 2030
Capital Allocated
(US$)
15-25 billion
Export/
Import Focus
Import
Demand Focus
(Industry)
1. Iron and Steel
2.Chemical feedstock
3. Refining
Strategy Features
1. Market development timeline
2. Direct investments
3. Other economic and financial mechanisms
4. Legislative and regulatory measures
5. Standardisation strategy and priorities
6. Research and development initiatives
7. International strategy
Demand Focus
(Transport)
1. Medium and heavy duty
2. Buses
3. Rail
Demand Focus
(Others)
NA
European Union
71
Germany
72 www.niti.gov.in | www.rmi.org /
72Harnessing Green Hydrogen
Japan
Current Hydrogen
Demand
2 MMTPAFocussed
Hydrogen
Colour/
Source
Blue
Policy Target
Demand
3 MMTPA by 2030 and
20 MMTPA by 2050 (5-30 by 2050)
Capital Allocated
(US$)
664 million
Export/
Import Focus
Import
Demand Focus
(Industry)
NA
Strategy Features
1. Hydrogen price target
2. Market development timeline
3. Direct investments
4. Standardisation strategy and priorities
5. Research and development initiatives
6. International strategy
Demand Focus
(Transport)
1. Passenger Vehicle
Demand Focus
(Others)
1. Heating
2. Power Generation
Japan
73
South Kores
Current Hydrogen
Demand
220 KTPAFocussed
Hydrogen
Colour/
Source
Grey / Blue / Green
Policy Target
Demand
3.9 MMTPA by 2030 and 27 MMTPA by 2050
Capital Allocated
(US$)
653 million (annual targeted support for
hydrogen project)
Export/
Import Focus
Import
Demand Focus
(Industry)
NAStrategy Features
1. Hydrogen price target
2. Market development timeline
3. Direct investments
4. Other economic and financial mechanisms
5. Standardisation strategy and priorities
6. Research and development initiatives
7. International strategy
Demand Focus
(Transport)
1. Passenger Vehicle
2. Medium and Heavy Duty
3. Buses
Demand Focus
(Others)
1. Power Generation
South Korea
74
United States
Current Hydrogen
Demand
10 MMTPAFocussed
Hydrogen
Colour/
Source
Low Carbon - Blue / Green /Others
Policy Target
Demand
Not available
Capital Allocated
(US$)
> 15 billion
Export/
Import Focus
NA
Demand Focus
(Industry)
1. Refining
2. OthersStrategy Features
1. Hydrogen price target
2. Research and development initiatives
3. Other economic and financial mechanisms
4. Direct investments
Demand Focus
(Transport)
1. Passenger Vehicle
2. Medium and Heavy Duty
3. Buses
4. Aviation
Demand Focus
(Others)
1. Heating
2. Power Generation
United States
75 www.niti.gov.in | www.rmi.org /
73Harnessing Green Hydrogen
Australia
Current Hydrogen
Demand
650 KTPAFocussed
Hydrogen
Colour/
Source
Clean - Blue / Green
Policy Target
Demand
Not available
Capital Allocated
(US$)
487 million
Export/
Import Focus
Export
Demand Focus
(Industry)
1. Chemical FeedstockStrategy Features
1. Hydrogen price target
2. Market development timeline
3. Direct investments
4. Other economic and financial mechanisms
5. Legislative and regulatory measures
6. Standardisation strategy and priorities
7. Research and development initiatives
8. International strategy
Demand Focus
(Transport)
1. Medium and Heavy Duty
2. Buses
Demand Focus
(Others)
1. Heating
Chile
Current Hydrogen
Demand
58.5 KTPAFocussed
Hydrogen
Colour/
Source
Green
Policy Target
Demand
5 GW/a(2025)
25 GW/a(2025)
Capital Allocated
(US$)
50 million
Export/
Import Focus
Export
Demand Focus
(Industry)
1. Chemical Feedstock
2. RefiningStrategy Features
1. Hydrogen price target
2. Market development timeline
3. Legislative and regulatory measures
Demand Focus
(Transport)
1. Medium and Heavy Duty
2. Buses
Demand Focus
(Others)
1. Heating
Australia
76
Chile
77
Refinery
Opportunity
India’s refinery sector is the fourth largest in the world
in terms of capacity, processing almost 250 million
tonnes of crude oil yearly.
78
Currently the refinery
sector accounts for almost 3 million tonnes of hydrogen
demand, representing 46% of the total hydrogen
demand in the country.
79
The majority of this hydrogen
is generated from on-site SMR plants, which amount to
27 million tonnes of CO
2
emissions currently, which are
expected to rise to 47 million tonnes by 2050.
80
However, the refinery sector can witness a dramatic
decrease in CO
2
emissions through a higher uptake of
green hydrogen. Green hydrogen uptake in the refinery
sector is estimated to start around 2024 at a 1% share,
which can reach 24% by 2030 and 100% by 2050.
81
This
will enable close to zero CO
2
emissions from hydrogen
production by 2050 and cumulative CO
2
emissions
savings of 820 million tonnes between now and 2050.
82
Appendix B : Sectoral Demand Assessment www.niti.gov.in | www.rmi.org /
74Harnessing Green Hydrogen
Cost Implications
Currently, use of green hydrogen for desulphurization
of different kinds of fuels is more expensive than using
hydrogen produced from SMR. However, refining is unique
in that the share of hydrogen cost per tonne of crude in
refinery operating is much less (around 2%– 4%).
83
Hence,
the cost premium associated with green hydrogen in the
final refined product is not as significant as in some other
sectors like ammonia or methanol, where the share of
hydrogen cost as a percentage of total product cost can be
up to 80%–90%.
84
Refinery operating cost per tonne of crude where hydrogen
is supplied by renewables is estimated to be on parity with
hydrogen supplied through SMR by 2027.
85
However, with
the premium in the years before parity is reached being
so low (max 2% premium), this sector could be a potential
early market for green hydrogen deployment and use.
Hydrogen Demand Outlook
Hydrogen demand from the refinery sector will increase
until 2035. However, as petroleum demand starts
to decrease beyond 2035 on the account of higher
electrification of passenger and freight transport,
hydrogen demand will also start to decrease. In addition
to electrification, other efficiency improvements such
as modal shift, logistics efficiency, non-motorized
transport, and ride hailing can further reduce petroleum
and associated hydrogen demand from refineries.
Almost 100% of hydrogen demand from refineries in
2050 can be supplied via renewable electrolysis.
Exhibit 36Hydrogen demand from refinery
Source: RMI analysis
0
1
2
3
4
5
6
H2 demand (million tonnes)
FOSSIL FUEL BASED H2
GREEN H2
2020 2025 2030 2035 2045 20502040
Ammonia
Opportunity
With a growing need for fertilizer in the future, ammonia
demand is set to double in the next three decades,
increasing from 17 million tonnes in 2020 to 35 million
tonnes by 2050.
86
This directly translates to CO
2
emissions
of 40 million tonnes in 2020, increasing to 62 million tonnes
by 2050.
87
The path to decarbonization of ammonia production
involves replacing fossil fuel-based hydrogen with the
hydrogen produced from renewables. With a falling LCOE,
the cost of green hydrogen will decline, making green
ammonia competitive with conventional sources. However,
existing urea plant locations and favourable renewable
production in terms of lower costs are not aligned.
88
This
means the location of green ammonia production in the
future might shift to favourable renewable-energy-rich
states that will have considerations around transport and
storage. RTC renewable arrangement must be explored to
mitigate some of these considerations.
In the efficient scenario with a higher uptake of green
hydrogen, India can abate around 550 million tonnes of
CO
2
emissions cumulatively between 2020 and 2050.
89
Switching to green hydrogen-based ammonia also
alleviates India’s energy security concerns by reducing
natural gas imports.
Cost Implications
Currently, green ammonia costs are higher than
ammonia produced through the SMR process, even at
the higher end of natural gas prices of $12/mmBtu. This
is mainly due to high capital costs and lower utilization
of electrolysers as well as higher electricity prices.
With improvements in technology and economies of
scale, electrolyser costs will decrease dramatically
and renewable generation will get cheaper and more
abundant. This will make green hydrogen-based
ammonia fairly competitive by 2030 even at the lower
end of a natural gas price of $8/mmBtu, where green
ammonia will cost around $393/tNH
3
and grey ammonia
will cost $415/tNH
3
.
90
Transport and storage costs need
to be considered if ammonia is to be used away from
the point of production. Near-term projects that can use
on-site green hydrogen for ammonia production should
be prioritized in this decade, with a potential to move
towards deployment post 2030. www.niti.gov.in | www.rmi.org /
75Harnessing Green Hydrogen
Exhibit 37Hydrogen demand from ammonia for
fertilizer
Source: RMI analysis
0
1
2
3
4
5
7
6
H2 demand (million tonnes)
FOSSIL FUEL BASED H2
GREEN H2
2020 2025 2030 2035 20452040 2050
Methanol
Opportunity
With India’s policy push towards using coal gasification
for hydrogen production for methanol, the majority
of hydrogen will be produced with coal by 2050 in a
business-as-usual scenario. As a result, even though
emissions from methanol currently represent a very
small amount, they are bound to rise sharply, registering
the highest growth among all the industrial sectors for
the next three decades.
Hydrogen Demand Outlook
Ammonia production contributes to 48% of the current
hydrogen demand. By 2050, this demand is set to
double, representing the third largest source (21%)
of final hydrogen demand after steel and heavy-duty
trucking. The majority of this demand will be used for
ammonia production for the fertilizer industry. However,
if ammonia as fuel for the shipping industry becomes
viable, this demand will increase significantly. The share
of the hydrogen demand met with renewables will start
picking up around 2027 when green hydrogen-based
ammonia reaches cost parity with natural gas-based
ammonia, and will increase beyond that to represent
an 88% share by 2050.
However, green hydrogen can play a key role in
reducing emissions from this sector. With high uptake
of green hydrogen-based methanol production,
India can abate 150 million tonnes of CO
2
emissions
cumulatively between 2020 and 2050.
91
The majority
of these reductions will be achieved post 2040, with an
increasing share of green hydrogen-based production.
Cost Implications
India currently imports 80% of its methanol demand,
mainly because it is much cheaper than producing
methanol with imported natural gas.
92
However, coal-
based methanol production can be much more cost-
effective, given the cheap and abundant coal reserves
in India. That is one of the main reasons why India is
betting on coal-based methanol production—to drive the
percentage share of domestically produced methanol
that is cheaper. Currently, green hydrogen-based
methanol costs are much higher than the natural gas or
coal alternative. With falling costs of electrolysers and
renewable electricity, by 2030, green hydrogen-based
methanol will become cost-competitive with fossil fuel-
based alternatives. Costs in 2030 for green hydrogen-
based production could come down to $461/tonne of
methanol,
93
compared with $470/tonne for the coal-
based alternative.
94
Hydrogen Demand Outlook
Hydrogen demand for methanol will increase at a 12%
CAGR between 2020 and 2050. Currently natural gas
is used for the majority that demand. However with the
inability to compete with cheap imports and India’s push
towards coal-based methanol production, natural gas’s
share of hydrogen demand will decrease, while coal’s
share will increase. At the same time, green hydrogen’s
share will also start increasing once cost parity is
achieved. By 2050, 60% of the hydrogen demand for
methanol will be met via green hydrogen and the rest
via fossil fuels. www.niti.gov.in | www.rmi.org /
76Harnessing Green Hydrogen
Iron and Steel
Opportunity
India is currently the second largest producer and
consumer of steel, after China.
95
An abundance of iron
ore reserves and low-cost labour position India as a very
favourable market and production hub of steel. Steel is
majorly used in building various types of infrastructure,
vehicles, appliances, machinery, and equipment.
With India witnessing rapid growth in urbanization,
infrastructure buildout, economic growth, and demand
for cars and trucks in the coming decades, steel demand
is expected to increase fivefold between 2020 and 2050
(93 Mt in 2020 to 528 Mt in 2050).
96
India uses all three processes (BF-BOF—44%, DRI-EAF/IF—
34%, and EAF/IF with scrap steel—22%
97
) to make steel.
Currently, emissions from steel production account for
a significant share—11% of total CO
2
emissions and 45%
of industrial CO
2
emissions in India.
98
With increasing
demand for steel and use of carbon-intensive processes
and rising exports, emissions from the steel sector in
India will rise from 269 million tonnes in 2020 to 951
million tonnes by 2050.
99
It is imperative to reduce emissions from the steel
sector in India, given the increasing demand and the
associated increasing emissions. Hydrogen can play a
Exhibit 38Hydrogen demand from methanol
Source: RMI analysis
0.0
0.5
1.0
1.5
2.0
2.5
H2 demand (million tonnes)
FOSSIL FUEL BASED H2
GREEN H2
2045 2050203020402020 20252035
key role. Instead of the coal or natural gas-based DRI
process, hydrogen produced via renewables can be used
as a reductant to convert iron ore pellets to pig iron. This
process only leads to water as a by-product and creates no
emissions. It’s important that the EAF process is supplied
with renewable electricity, which will lead to further
emissions reductions.
Using green steel can help India abate 1.4 giga tonnes of
cumulative CO
2
emissions between 2020 and 2050.
100
Green steel will account for 20% of total steel demand
and can substitute 98% of natural gas-based DRI steel
demand by 2050.
101
Steel has other potential pathways
for emissions reductions complementary to the green
hydrogen pathway, these are:
102
1) improving the energy
efficiency of existing furnaces and equipment, and
2) switching to a smelting reduction process combined
with CCS, which eliminates the need for a blast furnace.
India can become a very strong market for domestic
manufacturing and exports. Green steel exports will
increase on account of more infrastructure buildout
and the growth of automotive markets, allowing India
to position itself as a global leader in green steel
manufacturing.
Cost Implications
Currently, the conventional process of making steel and
the one most predominant in India, BF-BOF and coal-
based DRI process respectively, are much cheaper than
the hydrogen-based alternative. This is mainly because
of the low cost of fuel for the conventional options. Both
BF-BOF and the coal based DRI process use coking coal
and non-coking coal respectively, which is much cheaper
than natural gas or green hydrogen.
However, with the falling costs of renewables, hydrogen-
based steel can reach cost parity with the natural gas-
based DRI process by 2027, with costs of green steel
around $460/tonne of steel.
103
By 2030, steel produced
via the green hydrogen-based DRI process will be the
most cost-competitive route, with costs around $411/
tonne of steel, compared with $443/tonne for BF-BOF
and $459/tonne for DRI-EAF.
104 www.niti.gov.in | www.rmi.org /
77Harnessing Green Hydrogen
Hydrogen Demand Outlook
Steel production via natural gas-based DRI-EAF
contributes to 0.3 million tonnes of hydrogen demand
currently. That is bound to rise to 8 million tonnes by
2050.
Green hydrogen demand from steel production will start
taking shape around 2030 and increase slowly until
2035 when pilot projects are deployed. The demand is
expected to rise sharply beyond that when there is full-
Exhibit 39Hydrogen demand from steel in India
Source: RMI analysis
0
1
2
3
4
5
6
H2 demand (million tonnes)
FOSSIL FUEL BASED H2
GREEN H2
7
8
2050202020452040203520302025
scale deployment. Steel will contribute to 27% of final
hydrogen demand in 2050, the highest demand among
all the potential sectors.
Long-Haul, Heavy-Duty Road Freight
Opportunity
Freight transport is critical to India’s growing economy,
providing citizens with goods, helping grow businesses,
and improving quality of life. Road freight is an essential
pillar of the overall freight transport sector, contributing
to 71% of freight movement and 95% of freight-related
CO
2
emissions.
105
Emissions from the road freight sector
will increase fourfold between now and 2050 (188 Mt CO
2
in 2020 to 797 Mt CO
2
in 2050) in a business-as-usual
scenario.
106
Moreover, the cost of logistics as a share of
GDP is 14% in India, much higher than in the European
Union or the United States.
107
Although heavy-duty vehicles (HDVs) represent only 20%
of total freight vehicles on the road, they are the biggest
contributor towards India’s road freight movement, hauling
over 74% of road freight.
108
They are also the biggest
emitter, producing 60% of road-freight CO
2
emissions,
which is expected to increase to 66% by 2050.
109
Electrification of HDVs can help reduce shipping and
logistics costs, improve air quality, and reduce carbon
emissions. Between 2020 and 2050, India can abate
2 giga tonnes of CO
2
emissions (0.7 giga tonnes from
fuel cell electric trucks and 1.3 giga tonnes from battery
electric trucks) and save $208 billion on oil import bills
by transitioning to electric.
Two technology options exist to electrify HDVs—battery
electric vehicles (BEVs) and fuel cell electric vehicles
(FCEVs). Hydrogen-powered FCEVs offer key advantages
and make a strong candidate to play a part in road
freight HDV decarbonization, along with BEVs. In the
near term, retrofitting existing diesel trucks with fuel
cell applications could also be pursued.
Cost Implications
Currently, both BEVs and FCEVs are more expensive than
diesel trucks on a total-cost-of-ownership basis. The major
drivers behind that are the higher capital cost of EVs,
higher interest rates charged, and costs associated with
battery packs and fuel cell stacks. However, declining
battery and fuel cell prices due to production scale-up
and technology improvements (between 2019 and 2030,
battery and fuel cell prices are expected to fall by 64
percent and 61 percent respectively
110
), improved charging,
and hydrogen refuelling station utilization, BEVs and
FCEVs will be at cost parity with diesel trucks by 2027 and
2031 respectively.
111
A stronger policy push towards HDV
electrification can bring the cost parity even sooner.
Hydrogen Demand Outlook
Currently, hydrogen demand for the transport sector is
almost nonexistent, as no FCEVs exist on the market in
India. However, in the efficient scenario, if HDV FCEVs
sales penetration start to pick up around 2026, and
reaches about 30% by 2050, the hydrogen and fuel
cell system demand could increase, reaching 6.4 million
tonnes and 16 GW, respectively, by 2050. In such a
scenario, HDVs could amount to 22% of final hydrogen
demand in India by 2050, and the cumulative market www.niti.gov.in | www.rmi.org /
78Harnessing Green Hydrogen
Exhibit 40Hydrogen demand from HDVs in the
efficient scenario in India
Source: RMI analysis
size for fuel cells between 2020 and 2050 could be USD
40–54 billion (INR 3-4 lakh crore).
112
Such rapid growth
signifies the opportunity for domestic manufacturing of
FCEVs and fuel cell system components in India.
Power
Opportunity
The power sector in India is underdoing dramatic
transition led by electrification, demand growth, and
a large increase in renewable energy generation. High
demand growth and renewable generation opens up the
challenges and prospect of demand flexibility and VRE
integration. Technical solutions like demand response,
battery energy storage, and supply-side flexibility of
thermal power plants are increasingly being touted as
part of the suite of solutions.
Hydrogen advocates have proposed the concept of
power-H2-power as another form to provide storage
and flexibility to the grid, opening an end-use sector
for hydrogen. Power-H2-power involves generating
hydrogen in times of excess generation, storing it either
physically or chemically (e.g., ammonia), and then at
time of need, discharging it either through gas turbines
(OCGT or CCGT) or fuel cells.
In contrast to technologies such as Li-ion batteries, the
per unit costs of power-H2-power grow more slowly
with a decreasing utilization factor. It is this relationship
between per unit costs and utilization factor that makes
power-H2-power among the most promising options
for long-term storage (alongside other potential long-
term chemical storage vectors, like ammonia).
113
Beyond
providing flexibility, hydrogen is also seen as a potential
fuel source for peaking power generation through
existing gas turbines, and for power generation and
back-up applications for distributed assets like cell-phone
towers and replacement of diesel gensets.
Cost Implications and Demand Considerations
Hydrogen’s usefulness for power, however, has its share
of general costs. First, the conversion losses and round-
trip efficiency of generation storage and consumption
of hydrogen in a power-H2-power process is substantial
enough to warrant a rethink of the usefulness for
hydrogen especially when compared with other storage
technologies. Round-trip conversion efficiency for
current technologies may be in the order of 33%,
increasing potentially to slightly less than 50% with
technological improvements. Thus, converting electricity
into hydrogen, or a similar chemical energy carrier
like ammonia, is an inefficient process with substantial
energy losses across the conversion chain.
114
Secondly,
without cost reduction expectations being met, capital
costs for both electrolysers and fuel cells remains
substantially high.
In the Indian power sector, the opportunity of hydrogen
is further limited. Considering only the use case for
peaking power, it is only economical at margin when
prices are where they are expected to be in 2050. By
that time, there are a fair degree of technical and non-
technical unknowns. Carbon pricing can theoretically
alter the economics of hydrogen. However, even then,
the challenge of supply, transport, and storage will
possibly increase the cost of using hydrogen purely for
meeting peaking power needs in India.
When it comes to the end use of hydrogen for power-
H2-power applications, especially for seasonal storage,
the unique load structure and renewable profile hinders
the potential for hydrogen. Unlike countries in higher
H2 demand (million tonnes)
0
1
2
3
4
5
7
6
2020 2025 20302040 2045
20352050
CAGR = 31% www.niti.gov.in | www.rmi.org /
79Harnessing Green Hydrogen
Exhibit 41Economics of battery energy storage and power-H2-power
Source: TERI
115
0%
5%
10%
15%
20%
0% 20% 40% 60% 80% 100%
Dispatch from Storage
(% of total load)
Wind and Solar Generation
(% of total generation)
2020 Costs
0%
5%
10%
15%
20%
0% 20% 40% 60% 80% 100%
Dispatch from Storage
(% of total load)
Wind and Solar Generation
(% of total generation)
2050 Costs
DISPATCH FROM H2 STORAGE DISPATCH FROM BATTERY STORAGE
latitudes with large winter heating loads, India’s level
of seasonal variation is limited, except in certain
geographies in north India. The unknown here is how
that might change with higher cooling penetration. But
even then, India’s most cost-effective renewable source
is solar, which requires mostly intraday and non inter-
seasonal balancing. Within this context, TERI’s analysis
shows that power-H2-power is only required at very high
penetrations of VRE (above 80%). Battery storage is
dispatched long before hydrogen gets a chance to be a
part of the power balancing mix.
A key conclusion is that hydrogen and other seasonal
storage options are only going to be necessary to
squeeze out the last 10%–20% of dispatchable fossil
generation during the transition to a very high VRE
system. IEA’s generation outlook estimates VRE to
account for at most 69% by 2040 in its sustainable
development scenario. Therefore, the prospect for
power-H2-power in India is going to be visible only at
the tail end of our scenario period and that too only
marginal with limited impact. www.niti.gov.in | www.rmi.org /
80Harnessing Green Hydrogen
Appendix C: Definitions
i. Hydrogen causes corrosion and brittleness when
it comes into contact with some metals, requiring
new coatings and other protective measures.
ii. Cryo-compressed hydrogen storage refers to the
storage of hydrogen at cryogenic temperatures
in a vessel that can be pressurized (nominally to
250-350 atm), in contrast to current cryogenic
vessels that store liquid hydrogen at near-ambient
pressures (Argonne National Laboratory, 2014).
iii. All monetary units in the report are listed in
US dollars.
iv. The Hydrogen Council's Net-Zero analysis puts
potential hydrogen demand 690 million tonnes by
2050, with total required investment to be around
$7-8 trillion.
v. Alternate route of hydrogen production like
bio-hydrogen are not addressed in the report.
While limited in production potential, bio-hydrogen
from agricultural waste could have locally
synergistic advantage for distributed generation
where resources and end consumers are readily
available. Potential for bio-hydrogen should be
further explored. www.niti.gov.in | www.rmi.org /
81Harnessing Green Hydrogen
Endnotes
1. Energy Technology Perspectives (ETP) 2020
International Energy Agency, September 2020
https://www.iea.org/reports/energy-technology-
perspectives-2020
2. Tegler, M. Hydrogen Roadmaps Under Development
Have Doubled This Year. Bloomberg New Energy
Finance, August 12, 2021
https://www.bnef.com/shorts/12191
3. Roy, A.“India to meet climate goals, be green
hydrogen hub: Modi on Independence Day,”
Hindustan Times, August 15, 2021
https://www.hindustantimes.com/india-news/
independence-day-2021-hydrogen-energy-hub-solar-
energy-india-climate-goals-modi-101629012924744.html
4. RMI Analysis based on IEA data in Energy
Technology Perspectives, 2020
5. RMI Analysis
6. Ibid
7. Ibid
8.
Singh, S.,“Budget 2021-22 : Major focus on energy
transition, traditional reform areas, Energyworld.
February 1, 2021
https://energy.economictimes.indiatimes.
com/news/renewable/budget-2021-22-
major-focus-on-energy-transition-traditional-
reformareas/80627087#:~:text=Sha%20also%20
said%20a%20National,population%20of%20
over%201%20million.
9. Energy Sector Management Assistance Program.
Green Hydrogen in Developing Countries.
World Bank, 2020
https://openknowledge.worldbank.org/
handle/10986/34398
10. Storage and Transport. eniscuola, February 2011
http://www.eniscuola.net/wp-content/uploads/2011/02/
pdf_hydrogen_2.pdf
11. Ibid
12. Dias, V., Pochet, M., Contino, F., & Jeanmart, H.
Energy and Economic Costs of Chemical Storage
Frontiers in Mechanical Engineering, May 29, 2020
https://www.frontiersin.org/articles/10.3389/
fmech.2020.00021/full
13. Tegler, M., Hydrogen Roadmaps , BNEF
https://www.bnef.com/shorts/12191
14. Energy Technology Perspectives (ETP) 2020
International Energy Agency
https://www.iea.org/reports/energy-technology-
perspectives-2020
15. Hydrogen On The Horizon: Ready, Almost Set, Go?
World Energy Council
https://www.worldenergy.org/assets/downloads/
Innovation_Insights_Briefing_-_Hydrogen_on_the_
Horizon_-_Ready%2C_Almost_Set%2C_Go_-_
July_2021.pdf
16. Albrecht, U., Bünger, U., Michalski, J., Raksha, T.,
Wurster, R., & Zerhusen, J. International Hydrogen
Studies World Energy Council, September 2020
https://www.weltenergierat.de/wp-content/
uploads/2020/10/WEC_H2_Strategies_finalreport.pdf
17. 2H 2021 Hydrogen Market Outlook
Bloomberg New Energy Finance, August 2021
https://www.bnef.com/insights/26977
18. The Future of Hydrogen: Seizing today’s opportunities
IEA, June 2019
https://www.iea.org/reports/the-future-of-hydrogen
19. Ibid; and 2H 2021 Hydrogen Market Outlook
Bloomberg New Energy Finance
https://www.bnef.com/insights/26977
20. Green Hydrogen Cost Reduction: Scaling Up
Electrolysers To Meet The 1.5
°
C Climate Goal www.niti.gov.in | www.rmi.org /
82Harnessing Green Hydrogen
InternationalRenewable Energy Agency,
December 2020
https://irena.org/-/media/Files/IRENA/Agency/
Publication/2020/Dec/IRENA_Green_hydrogen_
cost_2020.pdf
21. Energy Technology Perspectives (ETP) 2020
International Energy Agency
https://www.iea.org/reports/energy-technology-
perspectives-2020
22. The Future of Hydrogen, IEA
https://www.iea.org/reports/the-future-of-hydrogen
23. Energy Technology Perspectives (ETP) 2020, IEA
https://www.iea.org/reports/energy-technology-
perspectives-2020
Net Zero by 2050 - A Roadmap for the Global
Energy Sector, IEA, 2021
https://www.iea.org/reports/net-zero-by-2050
Hydrogen for Net-Zero - A critical cost-competitive
energy vector, Hydrogen Council, 2021
https://hydrogencouncil.com/wp-content/
uploads/2021/11/Hydrogen-for-Net-Zero_Full-
Report.pdf
24. Ibid.
25. 2H 2021 Hydrogen Market Outlook, BNEF
https://www.bnef.com/insights/26977
26. Ibid.
27. Smil, V., Energy Systems: Transition and Innovation
Innovation Agora, September 2019
https://www.youtube.com/watch?v=szikg74kgnM
28. Waiver of inter-state transmission charges on
transmission of the electricity generated from solar
and wind sources of energy
Ministry of Power, June 2021
https://powermin.gov.in/sites/default/files/webform/
notices/Waiver_of_inter_state_transmission_charges_
Order_dated_21_June_2021.pdf
29. Hall, W., Spencer, T., Renjith, G., & Dayal, S.,
The
Potential Role of Hydrogen in India-A pathway for
scaling-uplow carbon hydrogen across the economy
The Energy and Resource Institute (TERI), 2020
https://www.teriin.org/sites/default/files/2020-12/
Report%20on%20The%20Potential%20
Role%20of%20Hydrogen%20in%20India%20
%E2%80%93%20%27Harnessing%20the%20
Hype%27.pdf
30. REFHYNE Clean Refinery Hydrogen for Europe,
REFHYNE
https://refhyne.eu/;
Shell Rheinland Refinery Update
ITM Power, June 2019
https://www.itm-power.com/news/shell-rheinland-
refinery-update
31. RMI Analysis
32. Anhydrous Ammonia, Minnesota Department of
Agriculture, https://www.mda.state.mn.us/pesticide-
fertilizer/anhydrous-ammonia
33. Fertilizer Fact Sheet: Ammonia, The Fertilizer
Institute, RMI https://www.tfi.org/sites/default/files/
documents/ammoniafactsheet.pdf
34. Tullo, A. H, Yara plans to make green ammonia in
Norway. C&EN, September 2020
https://cen.acs.org/business/petrochemicals/Yara-
plans-make-green-ammonia/98/web/2020/12
'Green' ammonia is the key to meeting the twin
challenges of the 21
st
century
Siemens-Energy
https://www.siemens-energy.com/uk/en/offerings-
uk/green-ammonia.html
Brown, T, Green ammonia in Australia, Spain, and
the United States
Ammonia Energy Association, October 2020
https://www.ammoniaenergy.org/articles/green-
ammonia-in-australia-spain-and-the-united-states/
35. Projects, Carbon Cycling International: https://www.
carbonrecycling.is/projects; and North-C-Methanol,
North CCU Hub: https://northccuhub.eu/north-c-
methanol/
36. möjlighet!, Hybrit,
https://www.hybritdevelopment.se/ www.niti.gov.in | www.rmi.org /
83Harnessing Green Hydrogen
ArcelorMittal Europe to produce ’green steel’
starting in 2020, ArcelorMittal, October 2020,
https://corporate.arcelormittal.com/media/news-
articles/arcelormittal-europe-to-produce-green-
steel-starting-in-2020
IGAR: reforming carbon to reduce iron ore,
ArcelorMittal, https://storagearcelormittalprod.blob.
core.windows.net/media/lukmokpc/igar-content-
final.pdf
37. Initial IMO GHG Strategy
International Maritime Organization
https://www.imo.org/en/MediaCentre/HotTopics/
Pages/Reducing-greenhouse-gas-emissions-from-
ships.aspx;
Ammonia Energy Association
https://www.ammoniaenergy.org/;
Clean Skies forTomorrow: Sustainable Aviation
World Economic Forum and McKinsey & Company, 2020
https://www3.weforum.org/docs/WEF_Clean_Skies_
for_Tomorrow_Sustainable_Aviation_Fuel_Policy_
Toolkit_2021.pdf
38. Department of Fertilizer
Ministry of Chemicals and Fertilizers(MoC&F)
39. McDonald, Z
Injecting hydrogen in natural gas grids could provide
steady demand the sector needs to develop
S&P Global, May 9, 2020
https://www.spglobal.com/platts/en/market-
insights/blogs/natural-gas/051920-injecting-
hydrogen-in-natural-gas-grids-could-provide-steady-
demand-the-sector-needs-to-develop
40. Industrial cluster policy, European Commission
https://ec.europa.eu/growth/industry/policy/
cluster_en
Panerali, K., & Jamison, S
Industrial clusters are critical to getting to net-zero.
Here’s why, World Economic Forum, October 29, 2020
https://www.weforum.org/agenda/2020/10/industrial-
clusters-can-be-a-key-lever-for-decarbonization-heres-
why/
NortH2, NortH2,
https://www.north2.eu/en
41. CEEW Analysis
42. Hall, W., Spencer, T., Renjith, G., & Dayal, S.,
The Potential Role of Hydrogen in India - A pathway for
scaling-up low carbon hydrogen across the economy
The Energy and Resource Institute (TERI), 2020
https://www.teriin.org/sites/default/files/2020-12/
Report%20on%20The%20Potential%20
Role%20of%20Hydrogen%20in%20India%20
%E2%80%93%20%27Harnessing%20the%20
Hype%27.pdf
43. Indian Oil to build India's first green hydrogen plant
at Mathura refinery. Indian Oil, July 2021
https://iocl.com/NewsDetails/59274
NTPC invites tender to set up India’s first Green
Hydrogen Fuelling Station in Leh. NTPC, July 2021
https://www.ntpc.co.in/en/media/press-releases/
details/ntpc-invites-tender-set-india’s-first-green-
hydrogen-fuelling-station-leh
44. Green Hydrogen Cost Reduction: Scaling Up
Electrolysers To Meet The 1.5
°
C Climate Goal
International Renewable Energy Agency(IRENA),
December 2020
https://irena.org/-/media/Files/IRENA/Agency/
Publication/2020/Dec/IRENA_Green_hydrogen_
cost_2020.pdf
45. RMI Interview, Electrolyser manufacturing in India
Ohmium, November, 2020.
46. India as a major country of the world with appropriate
technology, capital including FDI and extraordinary
human resource contributing significantly to the
global economy : RaviShankar Prasad
Ministry of Electronics & IT,June 2, 2020
https://pib.gov.in/PressReleasePage.aspx?
PRID=1628583 www.niti.gov.in | www.rmi.org /
84Harnessing Green Hydrogen
47. Cabinet approves PLI Scheme to 10 key Sectors for
Enhancing India’s Manufacturing Capabilities and
Enhancing Exports. Atmanirbhar Bharat, PiB Delhi
and Cabinet, November 11, 2020
https://pib.gov.in/PressReleasePage.
aspx?PRID=1671912
48. Report on hydrogen storage and applications other
than transportation, MNRE, June 2016
https://www.eqmagpro.com/wp-content/
uploads/2016/10/Annexure-V-Report-on-Hydrogen-
Storage.pdf
India Country Status Report on Hydrogen and Fuel Cells
Ministry of Science and Technology, 2020
https://static.pib.gov.in/WriteReadData/userfiles/
India%20Country%20Status%20Report%20
on%20Hydrogen%20and%20Fuel%20Cell.pdf
Path to Hydrogen Competitiveness - A Cost
Perspective, Hydrogen Council, January 20, 2020
https://hydrogencouncil.com/wp-content/
uploads/2020/01/Path-to-Hydrogen-
Competitiveness_Full-Study-1.pdf
49. Communication from the commission to the
European parliament, the council, the European
economic and social committee and the committee
of the regions-a hydrogen strategy for a climate-
neutral Europe, European Commission, 2020
https://ec.europa.eu/energy/sites/ener/files/
hydrogen_strategy.pdf
50. Green Hydrogen Catapult - World’s green hydrogen
leaders unite to drive 50-fold scale-up in six years
Climate Champions (UNFCC), December 8, 2020
https://racetozero.unfccc.int/green-hydrogen-
catapult/
51. Fueling the Future of Mobility - Hydrogen and fuel
cell solutions for transportation
Deloitte and Ballard, 2020
https://www2.deloitte.com/content/dam/Deloitte/
cn/Documents/finance/deloitte-cn-fueling-the-
future-of-mobility-en-200101.pdf
Path to Hydrogen Competitiveness - A Cost
Perspective, Hydrogen Council,January 20, 2020
https://hydrogencouncil.com/wp-content/
uploads/2020/01/Path-to-Hydrogen-
Competitiveness_Full-Study-1.pdf
52. Hydrogen Economy Outlook, BNEF, May 2020
https://www.bnef.com/insights/22971
53. About HESC, Hydrogen Energy Supply Chain Project
https://www.hydrogenenergysupplychain.com/
about-hesc/
54. Hydrogen Economy Outlook, BNEF, May 2020
https://www.bnef.com/insights/22971
55. McDonald, Z, Hydrogen transport moving molecules
a core challenge for H2 market growth
S&P Global, January 23, 2020
https://www.spglobal.com/en/research-
insights/articles/hydrogen-transport-moving-
molecules-a-core-challenge-for-h2-market-
growth#:~:text=Hydrogen%20
56. Tegler, M. Hydrogen Roadmaps Under Development
Have Doubled This Year, BNEF, August 12, 2021
https://www.bnef.com/shorts/12191
57. Green shift to create 1 billion tonne ‘green ammonia’
market? Argus Media, June, 2020
https://view.argusmedia.com/rs/584-BUW-606/
images/Argus%20White%20Paper%20-%20
Green%20Ammonia.pdf
58. Japan targets 3mn t/yr of ammonia fuel use by
2030, Argus Media, February 8, 2021
https://www.argusmedia.com/en/news/2184741-
japan-targets-3mn-tyr-of-ammonia-fuel-use-
by-2030
59. Green shift to create 1 billion tonne ‘green ammonia’
market? Argus Media, June, 2020
https://view.argusmedia.com/rs/584-BUW-606/
images/Argus%20White%20Paper%20-%20
Green%20Ammonia.pdf www.niti.gov.in | www.rmi.org /
85Harnessing Green Hydrogen
60. Gerres, T., Lehne, J., Mete, G., Schenk, S., & Swalec, C
Green steel production: how G7 countries can help
change the global landscape, Leadit, June, 2021
https://www.industrytransition.org/content/
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61. Ibid
62. H2 Green Steel completes strong USD 105 million
initial funding round to accelerate the transition into
fossil-free steel making. Innoenergy, May 25, 2021
https://www.innoenergy.com/news-events/h2-
green-steel-completes-strong-usd-105-million-initial-
funding-round-to-accelerate-the-transition-into-
fossil-free-steel-making/
63. Tata Steel plans to go 'green' in UK with electric
arc furnaces: Report, Business Standard, Business
Standard, July 19, 2020
https://www.business-standard.com/article/
companies/tata-steel-plans-to-go-green-in-uk-with-
electric-arc-furnaces-report-120071900773_1.html
64. Blank, T. K The Disruptive Potential of Green Steel
RMI 2019
https://rmi.org/insight/the-disruptive-potential-of-
green-steel/
65. Hoffmann, C., Hoey, M. V., & Zeumer, B
Decarbonization challenge for steel
McKinsey & Company, June 3, 2020
https://www.mckinsey.com/industries/metals-and-
mining/our-insights/decarbonization-challenge-for-
steel
66. 2020 World Steel in Figures
World Steel Association, 2020
https://worldsteel.org/wp-content/uploads/2020-
World-Steel-in-Figures.pdf
67. Blank, T. K, The Disruptive Potential of Green Steel
RMI, 2019
https://rmi.org/insight/the-disruptive-potential-of-
green-steel
68. Mann, W., Meisel, J., Bodnar, P., & Granoff, I.
Recasting the Golden Key, RMI, 2020
https://rmi.org/insight/recasting-the-golden-key
Energy Technology Perspective (ETP) 2020
International Energy Agency (IEA), September, 2020
https://www.iea.org/reports/energy-technology-
perspectives-2020
Hall, W., Spencer, T., Renjith, G., & Dayal, S.,
The Potential Role of Hydrogen in India - A pathway for
scaling-up low carbon hydrogen across the economy,
The Energy and Resource Institute (TERI), 2020
https://www.teriin.org/sites/default/files/2020-12/
Report%20on%20The%20Potential%20
Role%20of%20Hydrogen%20in%20India%20
%E2%80%93%20%27Harnessing%20the%20
Hype%27.pdf
About Hydrogen, HydrogenOne Capital
https://hydrogenonecapitalgrowthplc.com/about/
about-hydrogen/
Hydrogen from Renewable Power- Technology
Outlook for the Energy Transition, International
Renewable Energy Agency(IRENA), 2018
https://www.irena.org/-/media/Files/IRENA/Agency/
Publication/2018/Sep/IRENA_Hydrogen_from_
renewable_power_2018.pdf
69. Singh, S, Budget 2021-22 : Major focus on energy
transition, traditional reform areas
ET Energyworld, February 1, 2021
https://energy.economictimes.indiatimes.
com/news/renewable/budget-2021-22-major-
focus-on-energy-transition-traditional-reform-
areas/80627087#:~:text=Sha%20also%20said%20
a%20National,population%20of%20over%201%20
million
70. RMI Analysis
71. Communication from the commission to the
European parliament, the council, the European
economic and social committee and the committee
of the regions- a hydrogen strategy for a climate-
neutral Europe. European Commission, 2020
https://ec.europa.eu/energy/sites/ener/files/
hydrogen_strategy.pdf
72. The National Hydrogen Strategy, Federal Ministry for
Economic Affairs and Energy, June 2020 www.niti.gov.in | www.rmi.org /
86Harnessing Green Hydrogen
https://www.bmwi.de/Redaktion/EN/Publikationen/
Energie/the-national-hydrogen-strategy.html
73. The Strategic Road Map for Hydrogen and Fuel Cells
METI, 2019
https://www.meti.go.jp/english/press/2019/
pdf/0312_002a.pdf
Japan: Strategic Hydrogen Roadmap, Ministry of
Foreign Affairs and Trade, October 30, 2020
https://www.mfat.govt.nz/assets/Trade-General/
Trade-Market-reports/Japan-Strategic-Hydrogen-
Roadmap-30-October-2020-PDF.pdf
74. Ha, J. E, Hydrogen Economy Plan in Korea,
Netherlands Enterprise Agency, January 18, 2019
https://www.rvo.nl/sites/default/files/2019/03/
Hydrogen-economy-plan-in-Korea.pdf
Hydrogen Economy Roadmap of Korea, Ministry of
Trade Industry and Energy,
https://docs.wixstatic.com/ugd/45185a_
fc2f37727595437590891a3c7ca0d025.pdf
Lim. D., Lee. J. S., Korea sees tenfold rise in
hydrogen fuel use by 2030,
The Korea Economic
Daily, October 7, 2021,
https://www.kedglobal.com/newsView/
ked202110070016
75. Roadmap to US Hydrogen Economy,
Cell and Hydrogen Energy Association, 2020
https://static1.squarespace.com/
static/53ab1feee4b0bef0179a1563/t/5e7ca9d6c8fb
3629d399fe0c/1585228263363/Road+Map+to+a+
US+Hydrogen+Economy+Full+Report.pdf
76. Bruce S, T. M,
National Hydrogen Roadmap, CSIRO, 2018
https://www.csiro.au/en/work-with-us/services/
consultancy-strategic-advice-services/csiro-futures/
futures-reports/hydrogen-roadmap
77. National Green Hydrogen Stretgy
Ministeri de Energia, 2020
https://energia.gob.cl/sites/default/files/national_
green_hydrogen_strategy_-_chile.pdf
78. Petroleum Planning and Analysis Cell (2019 data) and TERI
79. RMI Analysis
80. RMI Analysis
81. Ibid
82. Ibid
83. BCG Analysis
84. RMI Analysis
85. RMI Analysis
86. RMI Analysis
87. Ibid
88. CEEW Analysis
89. RMI Analysis
90. RMI Analysis
91. Ibid
92. Hall, W., Spencer, T., Renjith, G., & Dayal, S.
The Potential Role of Hydrogen in India - A pathway for
scaling-uplow carbon hydrogen across the economy
The Energy and Resource Institute (TERI), 2020
https://www.teriin.org/sites/default/files/2020-12/
Report%20on%20The%20Potential%20
Role%20of%20Hydrogen%20in%20India%20
%E2%80%93%20%27Harnessing%20the%20
Hype%27.pdf
93. RMI Analysis
94. CEEW Analysis
95. World Steel Association (2020)
2020 World Steel in Figures
Retrieved from World Steel Association
https://worldsteel.org/wp-content/uploads/2020-
World-Steel-in-Figures.pdf
96. RMI Analysis www.niti.gov.in | www.rmi.org /
87Harnessing Green Hydrogen
97. RMI Analysis based on data from TERI and World
Steel Association
98. RMI Analysis
99. RMI Analysis
100. RMI Analysis
101. TERI Analysis
102. Hall, W., Spencer, T., Renjith, G., & Dayal, S. The
Potential Role of Hydrogen in India- A pathway for
scaling-up low carbon hydrogen across the economy
The Energy and Resource Institute (TERI), 2020
https://www.teriin.org/sites/default/files/2020-12/
Report%20on%20The%20Potential%20
Role%20of%20Hydrogen%20in%20India%20
%E2%80%93%20%27Harnessing%20the%20
Hype%27.pdf
Decarbonization Challenge for Steel
Mckinsey & Company, 2020
https://www.mckinsey.com/industries/metals-and-
mining/our-insights/decarbonization-challenge-for-
steel
103. RMI Analysis
104. RMI Analysis
105. RMI Analysis
106. RMI Analysis
107. Press Release on National Logistics Policy
Ministry of Commerce and Industry, 2020
https://commerce.gov.in/press-releases/
national-logisticspolicy-will-be-released-soon-
policy-to-create-a-single-window-e-logistics-
market-will-generate-employment-and-make-
msmes-competitive-nirmala-sitharaman/
108. RMI Analysis
109. Ibid
110. Electric Vehicle Outlook 2020, BNEF, 2020
https://about.bnef.com/electric-vehicle-
outlook
Fueling the Future of Mobility-Hydrogen and
fuel cell solutions for transportation, Deloitte,
Ballard, 2020
https://www.bmwi.de/Redaktion/EN/
Publikationen/Energie/the-national-hydrogen-
strategy.html
111. RMI Analysis
112. RMI Analysis
113. Hall, W., Spencer, T., Renjith, G., & Dayal, S. The
Potential Role of Hydrogen in India-A pathway
for scaling-up low carbon hydrogen across the
economy
The Energy and Resource Institute (TERI), 2020
https://www.teriin.org/sites/default/
files/2021-07/Report_on_The_Potential_Role_
of_%20Hydrogen_in_India.pdf
114. Ibid
115. Ibid
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