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Green hydrogen and ammonia policy to spur investment and promote energy transition: CII
Feb 17, 2022

The government policy on green hydrogen and ammonia encourages investment in the sector that could lay the foundation for a net zero carbon economy. The use of green hydrogen and ammonia can potentially bring down emissions in the hard to abate sectors like refineries, chemicals, and fertilisers, and thereby help India meet its Nationally Determined Contribution (NDC) targets.

Welcoming the policy, Vikram Kirloskar, Past President, CII and Chairman, CII Taskforce on Green Hydrogen, said, “The Union government’s announcement of green hydrogen and ammonia policy will go a long way in facilitating India’s transition to net zero carbon economy. The requirement of time bound clearances for these projects would spur investment while grid connectivity on priority will ease operational processes. The waiver of inter-state power transmission charges for a period of 25 years for those putting up projects before June 30, 2025, will also encourage early investment by manufacturers.”

The policy has taken a holistic view of the sector right from project inception stage to transport and demand aggregation.

The Union ministry of new and renewable energy will set up a portal for single-window clearances for projects. Manufacturing zones will be encouraged to host the production units for green hydrogen and green ammonia. Besides, provision of land for creating bunkers for storage of fuel will encourage export as well as their use in maritime applications.  Many of CII’s recommendations such as Waiver of inter-state transmission charge to producer of Green Hydrogen, allowing banking for Renewable Energy used for making Green Hydrogen, etc have found place in the Policy which will help bringing the cost of production green hydrogen down.  

The policy has followed a two-pronged approach to both promote use of renewable power as well as production of hydrogen and ammonia through its use. It has also provided for demand aggregation for the two products by designated agencies on competitive basis. This can help bring scale for production of even smaller quantities.

New Delhi

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