India planning financial support for setting up hydrogen manufacturing plants

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NEW DELHI, Sept 8 (Reuters) - India plans to provide federal financial support for setting up electrolysers as it wants to make the use of green hydrogen mandatory for refineries and fertiliser plants, power minister R.K. Singh said on Wednesday.

India, the world's third biggest greenhouse gas emitter, wants to generate 40% of its electricity through renewables by 2030 as it seeks to cut carbon emissions.

Singh said a note had been sent for approval of the federal cabinet to make use of green hydrogen mandatory for refining and fertilise plants.

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Initially the refineries and fertiliser plants would be require to use 10% green hydrogen, which would be increased to 20%-25% in 3-4 years, he said, adding the nation require at least 10 gigawatts of electrlyser capacity.

"We are going to come out with production linked incentives for setting up electrolyser capacity..the electrolyser capacity that we will need has to be in the region of 15 gigawatts (GW)," he said.

A mandate to use green hydrogen will lead to a slight increase in the prices of fuels and fertilisers, he said. Indian fuel prices are already among the highest in Asia.

"Gradually we believe that green hydrogen prices will come down so it will compete with grey hydrogen and then a mandate will not be required. Green hydrogen will find its own place"

An electrolyser splits water into hydrogen and oxygen using electrical energy. For green hydrogen, renewable energy is used for electrolysis.

Singh said his ministry wants a subsidy for promoting use of green hydrogen in the heavy long-haul vehicles.

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Reporting by Nidhi Verma and Sudarshan Varadhan Editing by Alistair Bell

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