India Launches Mode 2A Incentive Scheme To Accelerate Green Ammonia Production In Pursuit Of Sustainable Hydrogen

The Indian government has unveiled the Strategic Interventions for Green Hydrogen Transition (SIGHT) Programme, specifically focusing on Component II: Incentive Scheme for Green Ammonia Production and Supply under Mode 2A. This initiative is a crucial part of the National Green Hydrogen Mission, which has received an outlay of ₹19,744 crore up to the financial year 2029-30, with a significant allocation of ₹17,490 crore for the SIGHT programme.

The primary goal of the scheme is to boost the production of Green Ammonia in India, aiming to enhance its cost competitiveness compared to fossil-based alternatives and promoting large-scale utilization. The financial backing for this initiative will be sourced from the budget allocated to the National Hydrogen Mission Head.

The Ministry of New and Renewable Energy (MNRE) is set to spearhead the implementation of this scheme through the Solar Energy Corporation of India Limited (SECI), serving as the implementing agency. SECI will play a pivotal role in aggregating demand and initiating a competitive bidding process for the production and supply of Green Ammonia, with incentives being a key factor in the selection process.

Under Mode 2A of the scheme, SECI will aggregate demand and call for bids, ensuring the production and supply of Green Ammonia at the lowest cost through a competitive selection process. The implementation of the scheme will be transparent and subject to a rigorous selection process, overseen by MNRE and executed by SECI. SECI’s responsibilities include the examination of applications, issuance of acknowledgments and letters of award, verification of incentive disbursement claims, and submission of quarterly progress reports to MNRE.

To be eligible for incentives, bidders must adhere to the criteria outlined in the ‘National Green Hydrogen Standard’ notified by MNRE. The incentive will be provided directly in terms of ₹/kg of Green Ammonia produced and supplied for three-year. The incentive amounts are set at ₹8.82/kg in the first year, ₹7.06/kg in the second year, and ₹5.30/kg in the third year.

The selection process for beneficiaries involves competitive bidding, with the least quoted price being the determining factor. The net worth of the bidder, capacity quoted for Green Ammonia supply, and adherence to specified criteria are essential factors in the selection process. Bids will be invited for an initial capacity of 5,50,000 MT per annum of Green Ammonia under Tranche I of Mode 2A, with the possibility of additional capacity in subsequent tranches.

SECI may specify minimum and maximum capacity limits, and any unallocated capacity may be carried over to the next tranche. Allocated capacity remains constant over three years, and incentives are disbursed annually based on successful bidder claims. Bidders are required to submit Earnest Money Deposit (EMD) at the time of bid submission, and forfeiture conditions are outlined in the tender document. A Scheme Monitoring Committee (SMC) will oversee the implementation and performance of Green Ammonia production and supply capacities. The committee will periodically review the status and recommend measures to resolve difficulties. MNRE retains the authority to amend the Scheme Guidelines with the approval of the Hon’ble Minister of New & Renewable Energy as needed. This strategic intervention underscores India’s commitment to green hydrogen and sustainable energy practices, aligning with global efforts to combat climate change.

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