India is allocating 30 KTPA of green hydrogen production capacity across four major oil refineries, signaling a more targeted effort to move hydrogen from policy ambition into industrial applications where demand already exists.
The capacity has been awarded under Mode 2B of the Strategic Interventions for Green Hydrogen Transition (SIGHT) program, part of India’s National Green Hydrogen Mission. The allocation covers refineries operated by Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Petroleum Corporation and Numaligarh Refineries.
Indian Oil will receive 10 KTPA for its Panipat refinery, while Bharat Petroleum has been allocated 5 KTPA for Bina. Hindustan Petroleum will receive 5 KTPA for its Vizag refinery, and Numaligarh Refineries has been allocated 10 KTPA for its refinery in Assam.
The geographic spread is significant because it places green hydrogen projects directly within existing refining infrastructure rather than treating hydrogen production as a standalone export or power sector development. Refineries already consume large quantities of hydrogen, particularly for processes such as hydrocracking and hydrotreating, creating an established industrial market for lower carbon hydrogen.
Refineries Become an Early Market for Green Hydrogen
The allocation reflects a pragmatic feature of India’s hydrogen strategy. Rather than depending entirely on new hydrogen applications, the government is targeting sectors where hydrogen is already an industrial input.
India’s refining sector has traditionally relied heavily on hydrogen produced from fossil fuels. Replacing a portion of that supply with hydrogen generated using renewable electricity could therefore reduce the carbon intensity of existing industrial processes without requiring an entirely new end use.
The four projects will be implemented under Build Own Operate arrangements, with private developers responsible for project specific investment, construction and operation. This structure transfers much of the project execution responsibility to developers while allowing refineries to establish access to green hydrogen without necessarily owning the production assets.
However, the 30 KTPA allocation remains modest relative to India’s overall refining and hydrogen requirements. Its importance lies less in the absolute volume than in the development of an operating model for integrating renewable hydrogen into large industrial facilities.
The economics of refinery based green hydrogen will depend heavily on the cost and availability of renewable electricity, electrolyzer utilization and the price differential between green hydrogen and conventional hydrogen.
Electrolyzers require substantial electricity input, meaning hydrogen production costs are closely tied to renewable power prices and plant utilization. If renewable electricity is inexpensive but available intermittently, developers must balance low power costs against the capital cost and utilization rate of electrolyzer capacity.
This creates a different economic challenge from conventional hydrogen production, where fossil feedstocks can provide more predictable operating conditions.
The SIGHT framework is therefore intended to help close part of this cost gap while encouraging domestic production capacity and technology development. For refineries, the longer term question will be whether green hydrogen can become commercially competitive as renewable power, electrolyzer technology and hydrogen infrastructure scale.
India’s Refining Network Provides an Existing Demand Base
The four selected facilities offer another advantage: they already operate within large industrial and energy networks.
Panipat, Bina, Vizag and Numaligarh are established refining locations with existing hydrogen consumption, electricity infrastructure and industrial operations. Integrating electrolyzers into these sites can potentially reduce the need for entirely new hydrogen distribution networks.
That approach could also provide operational data on how renewable hydrogen production interacts with continuous industrial demand. Refining processes generally require reliable hydrogen supplies, while renewable electricity availability varies according to weather and time of day. Managing that mismatch will be one of the practical tests for these projects.
Hydrogen storage, grid connectivity and production scheduling will consequently become important components of project economics, even where the electrolyzer itself is technically proven.
The latest allocation also illustrates the evolution of India’s National Green Hydrogen Mission. The government has positioned the program around production, domestic consumption and eventual exports, but industrial applications are likely to provide some of the earliest large scale demand.
The refining sector is particularly relevant because hydrogen is already embedded in its production processes. Other potential industrial markets include ammonia, methanol, steel and chemicals, where hydrogen can displace fossil based inputs or enable lower carbon production routes.
India has also linked hydrogen development to energy security. Reducing fossil fuel consumption in industrial processes could lower exposure to international oil and gas price volatility, although the extent of that benefit will depend on the cost of renewable electricity and the domestic supply chain for electrolyzers and associated equipment.
