Rs. 13,050 Crore Incentive Scheme for Green Hydrogen Production: Fueling India’s Sustainable Energy Future

The Government of India has sanctioned the implementation of the “Strategic Interventions for Green Hydrogen Transition (SIGHT) Programme – Component II: Incentive Scheme for Green Hydrogen Production (under Code 1)” of the National Green Hydrogen Mission. The program will run from FY 2025-26 to FY 2029-30, with a total budget of Rs. 13,050 crore allocated for all modes under this component.

The objectives of the scheme are to maximize the production of Green Hydrogen and its derivatives in India, enhance their cost-competitiveness compared to fossil-based alternatives, and encourage their large-scale utilization.

The scheme will be implemented according to the detailed guidelines provided in the annex. The funding for this scheme will be sourced from the budget provisions allocated to the Hydrogen Mission. The Solar Energy Corporation of India (SECI) has been designated as the implementing agency responsible for the execution of this scheme.

This decision has been made by the Ministry, exercising its powers and with the concurrence of the Integrated Finance Division (IFD) as per their Diary No. 129 dated 28/06/2023. The government’s focus on green hydrogen production under the National Green Hydrogen Mission showcases its commitment to promoting sustainable energy alternatives and reducing reliance on fossil fuels.

The scheme provides a direct incentive of Rs 7/kg of Green Hydrogen production for a period of three years. The incentives are capped at Rs 50/kg in the first year, Rs 40/kg in the second year, and Rs 30/kg in the third year. The selection of beneficiaries will be done through a competitive bidding process.

The selection process involves bidders quoting their annual production capacity of Green Hydrogen and/or its derivatives, along with the incentive amount demanded for each of the first three years. The bidders will be allocated capacities based on the least average incentive demanded. In case of tied bids, priority will be given to the bidder with a higher bid capacity.

Different pathways, including technology-agnostic and biomass-based, have separate allocation capacities and eligibility requirements. The capacity allocation for Tranche I is 450,000 MT per annum of Green Hydrogen.

Successful bidders will receive incentive payouts based on the quoted incentive amount and the allocated capacity or actual production, whichever is lower. Incentives will be disbursed annually upon verification by MNRE.

Timelines for commissioning and penalties for non-compliance are also specified in the scheme. A Scheme Monitoring Committee will oversee the implementation and performance of the awarded manufacturing capacities.

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