New Delhi, India: The unfolding green hydrogen narrative in India is marked by swift policy enhancements and substantial investments from public sector undertakings (PSUs), prominent industrial players, and independent clean energy firms, according to a report by Emkay Global Financial Services.
The Government of India (GoI) has set a formidable target of producing 5 million metric tonnes per annum (mmtpa) of green hydrogen by the year 2030.
Nonetheless, the report acknowledges potential challenges on the road to achieving this target. “Considering the substantial scale of renewable energy (125GW) and electrolyzer capacity (60GW) required, a degree of adjustment to this estimate is likely. We posit that a more reasonable target would be 3 mmtpa,” the report suggests.
The green hydrogen initiative, if realized, has the potential to play a pivotal role in India’s commitment to reducing emissions. Emkay’s report indicates that “Green H2 can significantly contribute to the GoI’s emission reduction goals for 2030, with a potential carbon dioxide reduction of approximately 0.5 billion tonnes against the targeted 1 billion tonnes.”
One of the major hurdles facing the industry is the reduction of production costs. The report suggests the possibility of a cost reduction based on trends observed in other renewable sectors. “A 50% cost reduction to $2-2.5 per kilogram, based on learning-curve rates observed in solar and wind power, is feasible by 2030,” Emkay states.
Reinforcing this optimism, Emkay highlights current renewable energy trends, noting that “With a 5% learning-curve rate in Real-Time Commissioned Renewable Energy cost to Rs 3 per kilowatt-hour, a 40% decline in electrolyzer costs, and a 15% improvement in its efficiency, the Levelized Cost of Hydrogen (LCOH) could decrease to approximately $2.3 per kilogram by 2030.”
The demand for green hydrogen is expected to surge, driven by sectors such as oil refineries, exports, and ammonia-fertilizer producers, while supplies will originate from major consumers and merchant players alike.
Highlighting the GoI’s proactive efforts, Emkay references recent initiatives, stating that “Green H2 policies have gained momentum, with the Union Cabinet approving the National Mission in January 2023 and allocating a budget of Rs 197.4 billion.”
Public sector refiners project approximately 0.4 mmtpa of captive production by 2030. In contrast, “other PSUs, industrial conglomerates, and independent renewable energy players have signaled an intention to produce more than 3 mmtpa of green hydrogen equivalent output,” as mentioned in the report.
The report also underscores the investment opportunities emerging from this ecosystem, spotlighting companies such as RIL, Adani Enterprises, NTPC, and Tata Power. Emkay notes that “RIL could potentially produce around 1 mmtpa of green hydrogen and 2.5 GW per annum of electrolyzes by 2030, leading to a projected annual profit after tax (PAT) of Rs 11 billion.” Consequently, Emkay has upgraded RIL to a ‘BUY’ rating with a revised target price of Rs 2730 per share by September 2025.
