Green Hydrogen Costs in India: Dropping Slowly, But Big Targets Remain Tough
India’s push for clean energy is gaining steam, with green hydrogen production costs starting to fall. But hitting the ambitious goal of USD 1-2 per kg still feels like a distant dream, says a fresh report from Emkay Securities.
Right now, green hydrogen prices in India hover around USD 3.8 per kg (without GST), based on the latest bids from refinery and fertilizer sectors. That’s a small win compared to last year’s estimate of USD 4 per kg, thanks to better performance from electrolyzers—the key tech that splits water into hydrogen using renewable power.
The report points out that prices are easing bit by bit, but reaching that low target needs more than just time. It all boils down to ongoing cost cuts and smart government policies to make green hydrogen a real game-changer for India’s energy future.
What’s helping? Recent tweaks in GST rules for renewable energy equipment, now down to 5% from 12%, should slash energy expenses further. Electrolyzer costs are also improving, making production more efficient. Still, experts say India must tackle the 18% GST on green hydrogen itself to boost its edge against dirtier fuels.
Despite the hurdles, the government stays upbeat about its 2030 plan: ramp up to 5 million metric tonnes per year of green hydrogen. This clean fuel could cut carbon emissions big time in industries like steel, fertilizers, and transport.
On the action front, the Solar Energy Corporation of India (SECI) just kicked off its first green ammonia tender under the SIGHT scheme. Winners will supply about 0.72 million metric tonnes per year of green ammonia to 13 fertilizer plants for 10 years, at an average price of USD 0.6 per kg.
To sweeten the deal, the scheme offers incentives: Rs 8.8 per kg in year one, Rs 7.1 in year two, and Rs 5.3 in year three. Since green hydrogen forms 17-18% of ammonia, this works out to a hydrogen equivalent of USD 3.8-3.9 per kg—right in line with current costs.
Overall, the report says India’s green hydrogen journey is heading the right way, but closing the gap to global levels demands bold tax reforms and faster tech scaling. With supportive steps, the country could lead in affordable clean energy by 2030.
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