India Hydrogen Alliance (IH2A) has presented a compelling proposal to the Ministry of Finance, Government of India. The proposal seeks to augment the budgetary support for the National Green Hydrogen Mission (NGHM) and establish a substantial $5 billion National Hydrogen Transition and Development Fund.
IH2A’s proposal underscores the need for a comprehensive funding mechanism akin to the successful EU Green Hydrogen Fund. The envisioned National Hydrogen Transition and Development Fund is anticipated to play a pivotal role in supporting various aspects of India’s hydrogen ecosystem:
- Large-Scale Hydrogen Projects: The fund aims to bolster major hydrogen projects and the development of hydrogen hubs, extending beyond electrolyser manufacturing.
- Sectoral Transition Plans: IH2A emphasizes the importance of supporting sectoral hydrogen transition plans, particularly in Steel and Chemicals, aligning with guidelines for the fertilizer and refinery sectors.
- Infrastructure Development: The fund will provide capital expenditure (CAPEX) support for crucial greenfield hydrogen infrastructure, including pipelines and storage facilities. This support is expected to reduce the cost of green hydrogen supply to end-users.
- H2 Hubs Expansion: IH2A recommends the co-development of at least five large National Hydrogen Hubs, collaborating with state governments and a mix of private and state-owned project developers.
- Skilling Initiative: Recognizing the need for specialized skills, the fund proposes the creation of a National Hydrogen Transition Skilling program. This initiative aims to cultivate a workforce of hydrogen engineering design and engineering services professionals in collaboration with educational institutions.
The proposed $5 billion fund positions India alongside global counterparts like the EU, addressing the diverse needs of the hydrogen value chain within the country.
Amrit Singh Deo, Secretariat Lead at IH2A, outlines a potential funding approach, suggesting the pooling of multilateral funding and leveraging energy transition allocations, such as those from the Ministry of Petroleum and Natural Gas. Sovereign green bonds are also considered as potential sources for funding this transformative initiative.
IH2A’s proposal builds upon the groundwork laid in the previous year, emphasizing the economic viability of green hydrogen hubs and estimating a substantial $50 billion domestic manufacturing opportunity for India. As the proposal gains momentum, IH2A anticipates active collaboration with stakeholders to transform these plans into a reality.
