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hydrogen

India-Japan Hydrogen Declaration Builds Cross-Border Supply Chains Amid Record-Low Ammonia Pricing

Arnes BiogradlijaBy Arnes Biogradlija02/09/20255 Mins Read
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India’s renewable energy ministry and Japan’s Ministry of Economy, Trade and Industry (METI) have established a joint framework for hydrogen and ammonia value chain development, coinciding with India’s achievement of record-low green ammonia pricing through its ongoing auction series. ACME Cleantech Solutions secured capacity at ₹49.75 per kg ($0.57/kg) in recent SECI auctions, demonstrating competitive production economics that support Japan’s import strategy.

Strategic Alignment and Policy Frameworks

Japan’s pioneering hydrogen strategy, established in 2017, targets 20 million tonnes of annual hydrogen consumption by 2050 and three million tonnes of ammonia fuel use by 2030. India’s National Green Hydrogen Mission aims for five million tonnes of annual green hydrogen production, creating complementary supply-demand dynamics between the nations.

The framework covers research, investment, project execution, logistics, and market rule alignment across five cooperation areas: research and innovation, policy standards and trade facilitation, trade and investment, international negotiations, and infrastructure development. This comprehensive approach addresses both technical barriers and commercial deployment challenges that have constrained cross-border hydrogen trade.

Market Pricing and Commercial Viability

SECI achieved a record-low price of INR 55.75 per kg (around $641 per tonne) for green ammonia in its first-ever auction under the National Green Hydrogen Mission’s SIGHT Scheme, though subsequent auctions have achieved even lower pricing. ACME’s winning bid of ₹49.75 per kg represents the lowest tariff achieved in the SIGHT Scheme, indicating improved cost competitiveness as production scales increase.

The 724,000 tonnes per annum procurement target spans 13 planned auctions, with producers receiving declining incentives of ₹8.82/kg in year one, ₹7.06/kg in year two, and ₹5.30/kg in year three, totaling ₹15.3 billion in government support. This subsidy structure demonstrates India’s commitment to establishing commercial-scale production while transitioning toward market-based pricing.

Cross-Border Infrastructure Development

Concrete progress in bilateral infrastructure development includes six Japanese companies exploring a 400,000-tonne annual green ammonia facility in Odisha by 2030. IHI Corporation’s offtake agreement with ACME for Indian-produced green ammonia establishes a commercial precedent for cross-border supply chains, supported by MOL’s provisional shipping agreements for ocean and coastal transport to Japanese terminals.

The Odisha project represents significant scale relative to current auction volumes, though execution depends on resolving infrastructure, regulatory, and financing challenges across both jurisdictions. Japanese investment in Indian production facilities addresses domestic decarbonization objectives while leveraging India’s renewable energy cost advantages and production capacity expansion.

Ammonia Co-firing and Industrial Applications

Japan’s thermal power plant ammonia co-firing strategy creates immediate demand for imported ammonia, supporting the commercial viability of Indian production investments. Japanese government funding via NEDO supports JERA’s plan to demonstrate 50% ammonia-coal co-firing by 2030, establishing substantial demand foundations for cross-border trade.

India’s fertilizer sector decarbonization through green ammonia adoption provides a domestic market anchor for production facilities while export capabilities serve Japanese demand. This dual-market approach improves project economics compared to export-only strategies that depend entirely on cross-border logistics and international market volatility.

Technology Transfer and Industrial Cooperation

Beyond commodity trade, the partnership encompasses technology transfer and joint development initiatives. The Ministry of Mines of India and METI signed a Memorandum of Cooperation in the field of Mineral Resources in August 2025, indicating broader resource cooperation that supports hydrogen economy development through raw material supply chain integration.

Sojitz’s investment in 30 biomethane plants operational by 2027 demonstrates Japanese commitment to Indian renewable energy infrastructure beyond hydrogen-specific projects. This diversified investment approach strengthens bilateral energy cooperation while building technical expertise and operational capabilities across multiple clean energy sectors.

Supply Chain Economics and Logistics

Cross-border ammonia transport requires specialized shipping infrastructure and handling capabilities that add cost and complexity compared to domestic supply chains. MOL’s shipping agreements address transport logistics, though total supply chain costs, including production, transport, storage, and distribution, determine final commercial competitiveness against domestic alternatives.

Japan’s existing ammonia import infrastructure provides an operational foundation for scaled Indian supply, while India’s production cost advantages must offset international transport and handling expenses. The economics depend on sustaining production cost leadership while managing supply chain risks and infrastructure capacity constraints.

Market Development Challenges

2025 is shaping as a pivotal year for ammonia energy imports to Japan, though commercial deployment requires resolving technical standards, safety protocols, and regulatory frameworks across both jurisdictions. Harmonizing quality specifications, handling procedures, and safety requirements becomes critical for operational efficiency and cost management.

The partnership’s success depends on coordinating policy implementation timelines, infrastructure development schedules, and commercial contract structures. Delays in any component could undermine project economics and investor confidence, particularly for capital-intensive infrastructure requiring long-term revenue certainty.

India’s green ammonia auction progress demonstrates production cost competitiveness, while Japan’s import strategy and infrastructure development provide a demand foundation for cross-border trade. However, converting strategic declarations into operational supply chains requires sustained coordination across technical, commercial, and regulatory domains. The partnership’s effectiveness will be measured by achieving commercial-scale trade flows that support both nations’ decarbonization objectives while establishing viable business models for private sector participation.

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