The India Hydrogen Alliance (IH2A) has called on the Indian Government to more than double its budget of green hydrogen subsidies to $4.8bn.
The industry coalition cited concerns about slow project development and the lack of green hydrogen offtake agreements, which could potentially undermine India’s National Green Hydrogen Mission.
To turn the tide, IH2A has recommended that the government issue demand-side incentives to industrial end-users in the industrial sectors – specifically refining, fertilisers, steel, chemicals, and heavy-duty transport sectors.
It also calls for CAPEX subsidies to support project developers in building shared hydrogen infrastructure at hydrogen hubs nationwide.
To support the plans, the IH2A suggests that the government should set up Green Hydrogen Development Corporations (GHDCs) to support project, hub and shared infrastructure development.
Additionally, the group urges public finance and funding support for the development of five more national hydrogen hubs, in collaboration with state governments and project developers.
Read more:India’s IH2A submits national green hydrogen hub plan to government
IH2A says its recommendations would require an additional $2.5bn in funding, adding to the $2.3bn already committed.
Amrit Singh Deo, Secretariat Lead for IH2A, said green hydrogen offtakers are holding back from long-term agreements due to high costs, but stressed increased budgetary support could incentivise increased uptake.
“This increased funding should help provide offtake-linked demand-side incentives to industrial entities in the refinery, fertiliser, steel and chemical sectors, as well as in heavy-duty transport sectors.
“This is expected to increase development of more green hydrogen projects and ensure India meets its Green Hydrogen ambitions and 2030 targets. The recommendations made by IH2A are intended to support growth and development of India’s green hydrogen economy,” he said.
However, some key players in the industry have previously suggested India’s initial hydrogen developments will focus on overseas consumption.
INOX Air Products’ (INOXAP) Managing Director, Siddarth Jain, previously told H2 View that India cannot afford the luxury of paying a green premium on products.
“All the projects in India are looking at Asia,” he said. “Why Asia? The answer is very simple. It’s because the Asian governments are subsidising the consumer.”
Read more:Consumer subsidies key to green hydrogen success, says INOXAP boss
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