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New Business opportunities under the National Green Hydrogen Mission of India

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New Business opportunities under the National Green Hydrogen Mission of India

02 Feb, 2023
National Green Hydrogen Mission

India announced a National Hydrogen Energy Mission (NHM) in January this year to become the global hub for the manufacture of green hydrogen and achieve a net-zero carbon emission by 2070. The government has developed a roadmap to use hydrogen as an energy source and replace conventional fossil fuels. Announcing “green growth” as one of the priority sectors for the government, Finance Minister of India Nirmala Sitharaman allocated Rs. 10,222 crores toward the renewable energy sector in the Union Budget 2023. The government aims to develop a global hub for hydrogen technologies manufacturing in the country, cut down carbon emissions, and increase the use of renewable energy in the country. The National Green Hydrogen Mission aims to transform India into a green Hydrogen Economy, develop research around it, create hydrogen hubs, manufacture machinery, attract investment, create job and reduce fossil fuel imports.

India is an emerging green economy with many first-of-its-kind green initiatives under its name. After being recognised as a leader in the solar energy sector, India has shown to take affirmative steps in the green energy sector too. A green hydrogen-based economy in the country will be able to compete with the competitive green hydrogen industry of the world. This allocation in the Budget 2023 comes at a crucial time and will benefit new-age “green entrepreneurs”. After facing the slowdown during the pandemic, the government has taken concrete steps to boost the manufacturing sector in the renewable energy market. The country has set a target to achieve an installed capacity of 500 GW through the “National Green Hydrogen Mission” by 2030. Green hydrogen has the potential to achieve cost parity with natural gas-based hydrogen (or grey hydrogen) by 2030. Grey hydrogen, which is used in oil refineries, fertilisers, cement industry etc., in massive amounts, will be replaced gradually in a phased manner. The government believes that green hydrogen is necessary to achieve a truly low carbon economy in line with the government’s objective to make India a net zero carbon emitter by 2070. Therefore, the impetus will be huge for developing infrastructure, technology and businesses that will help the country in this regard. This blog will see how green hydrogen will prove to be a fuel source of the Atmanirbhar Bharat and the upcoming business opportunities in this new renewable energy segment.

What changes after the 2023 Budget Allocation to Green Energy Sector?

The initial outlay of Rs.19,744 crore, will include an outlay of 17,490 crore for SIGHT programme (Strategic interventions for green hydrogen transition), Rs.1,466 crore will be allocated for pilot projects, Rs.400 crore for R&D, and Rs. 388 crores towards other components of the National Green Hydrogen Mission. The mission aims at short-term and long-term, i.e. ten years and more by the year 2030, resulting in the development of least 5 Million Metric tonnes capacity for green hydrogen production per annum along with an associated renewable energy capacity of about 125 GW. Biofuel production, such as biodiesel and bioethanol, will also see a boost apart from Green Hydrogen-derived synthetic fuels, like Green Methanol, Green Ammonia etc. The National Green Hydrogen Mission will also explore blending possibility of Green Hydrogen based Methanol/Ethanol and other synthetic fuels from Green Hydrogen in automobile fuels.

What is Green Hydrogen, and how is it different

Terms such as grey, turquoise, blue and green have been used to categorise hydrogen based on the raw material needed and the process involved in the manufacturing. Grey hydrogen is traditionally produced from methane, split with steam into CO2. It is also produced from coal, which has a significantly higher CO2 emission. Their manufacturing also uses methane. As CO2 is one of the biggest agents of global warming and climate change, manufacturing blue and turquoise hydrogen is not considered eco-friendly. Green hydrogen, however, uses electricity generated from the electrolysis process instead of the SMR process and uses electricity generated from renewable resources.

Importance of Green Hydrogen Industry under the National Green Hydrogen Mission

India imports over 40% of its primary energy requirements from abroad, which is worth over USD 90 billion annually. Major sectors like mobility and industrial production depend significantly on imported fossil fuels. Hydrogen is required for several purposes today. Production of green hydrogen using renewable energy can play a vital role in low-carbon and self-reliant economic pathways. Its use in many new programmes in the country, such as green fuel, green energy, green mobility, green farming, green buildings and equipment, and policies for efficient use of this energy source in various economic sectors will mean that the industry is bound to see exponential growth in the demand of Green Hydrogen and its derivatives, the machinery and technology used and the infrastructure development associated with it. Some of the targets under the National Green Hydrogen Mission are as follows for increasing the usage of Green Hydrogen.

  • Oil refineries will be replacing 30 per cent of fuel with green hydrogen by 2035, starting from 3 per cent in 2025.
  • Fertiliser production will be using 70 per cent green hydrogen by 2035, starting from 15 % in 2025.
  • By 2035, urban gas distribution networks will be replacing 15 per cent of their fuel requirement with green hydrogen, starting from 5 % in 2025. Petroleum and Natural Gas Regulatory Board has already approved 5 per cent blending rate for green hydrogen with piped natural gas (PNG)

Upcoming Opportunities in India’s GreenHydrogen Economy

Innovative MSMEs and startups working on the development of indigenous technology and their adaptation will be encouraged under existing programmes through specific support mechanisms under the National Green Hydrogen Mission. The following sectors will witness enhanced opportunities for setting up innovative businesses and their expansion in the coming years.

Creation of infrastructure: Decentralised Green Hydrogen production would be essential for certain applications such as long-haul mobility. Hydrogen refuelling stations in cities and along highways will be connected to decentralised RE plants for the in-situ production of Green Hydrogen. Infrastructure that supports and facilitates the building of necessary infrastructure for the storage and delivery of Green Hydrogen and its derivatives will also be required.

Opportunity in Export: there is a massive opportunity in the export market for green hydrogen and its derivatives due to the increasing pressure of reducing GHG emissions[1] globally. The new policy aims to put India on the global map as a manufacturer of green hydrogen and electrolysers. Major export hubs will include the Middle East, Southeast Asia, and Africa. Apart industrial sector, the mobility sectors will also require a substantial supply of green hydrogen for decarbonisation.

Opportunity in investment: Ministry of Commerce & Industry will facilitate ease of doing business, encourage investments and implement specific industrial policy measures for low-cost production and marketing of hydrogen and its derivatives. The National Green Hydrogen Mission envisages an investment of Rs. 8 lakh crores and the creation of around 6 million jobs by 2030.

Opportunities in the Energy Sector: India’s distinct advantage in terms of low-cost renewable electricity energy production, complemented by falling electrolyser prices, can enable green hydrogen to be readily accepted by industries as an alternative to fossil fuel.

Opportunities in the Manufacturing Sector: Ministry of Commerce & Industry will formulate necessary policies and programmes to develop an ecosystem for the manufacturing of specialised equipment needed, such as green hydrogen-producing units, electrolysers, fuel cells etc. States will have an opportunity to become front runners in this sunrise sector through manufacturing and project development by setting up green businesses and promoting the export of green hydrogen derivatives.

Opportunities in Research and Development: India’s emerging green hydrogen economy will also provide opportunities around research and development as well as component manufacturing that are crucial to the development of the hydrogen-based economy. Creation of suitable facilities to test, certify and validate technologies will be encouraged. Blue Sky Projects that aims to develop capabilities of the R&D sector within an array of subjects like the development of 3rd generation, Solid Oxide Fuel Cells (SOFCs), electrocatalysts, reversible Solid Oxide Electrolysers (SOECs), seawater electrolysis, plasma pyrolysis, thermo-catalytic pyrolysis, high entropy alloys for reversible hydrogen storage, salt cavern surveys etc. will be encouraged.

Additional takeaways for Industries from the National Green Hydrogen Mission

A legal provision for ensuring the enforceability of consumption targets for Green Hydrogen will be established through the Energy Conservation (EC) Act. The Act which will empower the government to specify minimum share of energy and feedstock consumption for industries from non-fossil fuel-based sources that the industry must ensure. To facilitate the delivery of renewable power, supportive provisions of the policy will be extended to Green Hydrogen Projects, such as facilitating renewable energy banking, waiver of Interstate transmission charges for renewable energy used for Green Hydrogen production and time-bound issuance of Open Access and connectivity.


Many major economies have declared similar Hydrogen strategies as part of climate and clean energy-related actions. The National Green Hydrogen Mission of India will lead to significant decarbonisation of the economy, will enable India to assume market leadership and reduce the dependence on fossil fuel imports. There is a clear focus on government funding and support for R&D, measures for demand creation and financial support for manufacturing and infrastructure development in associated fields too, like domestic manufacture of fertilisers using green ammonia, Strategic Interventions for Green Hydrogen Transition (SIGHT), Green steel manufacturing, transport, shipping and creation of green hydrogen hubs in the country. This mission will prove to be one of the country’s most important projects, and those green entrepreneurs who participate today and help build India’s Green Economy. Guidance in setting up green businesses by those leading the environment domain will assist in streamlining the legalities and make your business set up a quick, hassle-free and cost-effective decision.

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