In the wake of the central government’s initiatives to promote green hydrogen production and electrolyser manufacturing in India, several states have begun unveiling their own policies and incentives to support the green energy sector. Moneycontrol provides an overview of the state-level incentives, which will complement the measures introduced by the central government.
The Union government approved the National Green Hydrogen Mission (NGHM) on January 4, with the aim of establishing India as a leading global producer and exporter of green hydrogen, targeting an annual production of 5 million metric tons (MMT) by 2030. The Ministry of New and Renewable Energy (MNRE) subsequently launched the NGHM, allocating an initial budget of Rs 19,744 crore. Of this, Rs 17,490 crore is allocated for incentivizing green hydrogen production (Rs 13,050 crore) and electrolyser manufacturing (Rs 4,440 crore).
Several states have now followed suit, offering incentives for green hydrogen production, renewable energy generation (essential for green hydrogen production), subsidies for transmission within their regions, SGST (State Goods and Services Tax) reimbursement, government land allotments, and more.
Notably, whatever incentives or subsidies states provide under their respective green hydrogen policies will be in addition to the incentives offered by the central government. A senior MNRE official stated, “States are free to offer any incentive or subsidy that promotes green hydrogen and renewable energy in their region.
To provide clarity, the MNRE released standards for green hydrogen production in India on August 18. The guidelines mandate that the carbon emissions associated with green hydrogen production should not exceed two kilograms of carbon dioxide equivalent per kilogram of hydrogen.
As states introduce their policies and incentives, they are poised to play a crucial role in advancing India’s green hydrogen industry. These policies will undoubtedly contribute to the country’s ambitious renewable energy goals and encourage the growth of the green hydrogen sector.
State-Specific Initiatives:
Andhra Pradesh:
Aims to produce 0.5 MTPA of green hydrogen and 2.0 MTPA of green ammonia in the next five years.
Offers government land at a subsidized rate, SGST waiver, and various exemptions.
Maharashtra:
Plans to create 1.5 million tonnes of green hydrogen production capacity.
Provides exemptions on surcharges, transmission charges, and electricity duty.
Gujarat:
Designates green hydrogen manufacturing as a priority sector.
Offers incentives such as interest subsidies, SGST reimbursement, and electricity duty exemptions.
Uttar Pradesh:
Targets a green hydrogen production capacity of nearly 5,00,000 tonnes per annum by 2028.
Proposes incentives including stamp duty exemption, tax reimbursement, and capital interest subsidy.
Rajasthan:
Announces a 50% rebate in transmission and distribution charges for renewable energy plants.
Provides incentives for land allocation, green hydrogen research centers, and more.
Madhya Pradesh:
Includes green hydrogen and green ammonia initiatives in its renewable energy policy.
Offers special incentives for electrolyser manufacturing units.
Tamil Nadu (In Progress):
Finalizing a dedicated green hydrogen policy.
Odisha:
Grants exemptions on surcharges, state transmission charges, and SGST.
Provides incentives for green power purchases and consumption from local discoms.
These state-level policies, coupled with the central government’s initiatives, are poised to accelerate the growth of India’s green hydrogen sector and contribute significantly to the nation’s renewable energy objectives.
