By 2050, the global green hydrogen market is projected to reach $2.5 trillion, driven by decarbonization efforts in heavy industries, transport, and energy storage. Punjab, India’s agricultural powerhouse, is positioning itself to capitalize on this shift with its draft Punjab Green Hydrogen Policy 2023. The policy targets 100 kilotonnes per annum of green hydrogen and ammonia production by 2030, leveraging the state’s abundant crop residue—paddy, sugarcane, and cotton—to fuel biomass-based hydrogen generation.
Aligning with National and Global Climate Goals
Punjab’s policy dovetails with India’s National Hydrogen Mission (2022) and its 2070 net-zero commitment, emphasizing green hydrogen as a critical lever for industrial decarbonization. Unlike conventional hydrogen production, which relies on fossil fuels, green hydrogen is produced via electrolysis powered by renewables or biomass gasification—a process Punjab is uniquely positioned to exploit.
The state generates 20-22 million tonnes of paddy straw annually, much of which is burned, contributing to severe air pollution. By converting this biomass into hydrogen, Punjab could mitigate CO₂ emissions while creating a new revenue stream for farmers. However, scaling this model faces hurdles: biomass supply chain inefficiencies, high gasification costs, and competition from cheaper grey hydrogen.
Incentives Aim to Overhaul Infrastructure and Attract Investment
To spur adoption, Punjab’s policy offers fiscal and regulatory sweeteners, including:
- 100% electricity duty waiver during project construction.
- Stamp duty exemptions for land acquisition and leasing.
- Capital subsidies up to ₹15 crore for biomass-based hydrogen units.
- Financial incentives for hydrogen-powered vehicles and refueling stations.
The Punjab Energy Development Agency (PEDA) will oversee project approvals, while the Bureau of Investment Promotion streamlines clearances via a single-window system—a nod to bureaucratic hurdles that often stall renewable projects.
Technological and Infrastructure Challenges
While the policy champions biomass gasification and electrolysis, these technologies remain cost-prohibitive without subsidies. Electrolysis, for instance, requires ~50 kWh of electricity per kg of hydrogen—a challenge in a state where renewable penetration lags behind solar-rich Rajasthan or wind-heavy Tamil Nadu.
To address this, Punjab plans:
- Hydrogen parks with shared infrastructure.
- Blending mandates in natural gas networks.
- A Centre of Excellence for R&D in hydrogen storage and transport.
Yet, questions linger. Can biomass-derived hydrogen compete on cost with conventional fuels? Will industries—particularly fertilizer and steel producers, which consume 70% of global hydrogen—transition without stricter mandates?
Balancing Ambition with Execution
Punjab’s policy is a bold bet on green hydrogen, but its success hinges on execution. Key variables include:
- Scaling biomass collection to ensure consistent feedstock.
- Reducing production costs to under $2/kg (currently ~$4-6/kg for green hydrogen).
- Securing offtake agreements with industries to guarantee demand.
If these challenges are met, Punjab could emerge as a regional hub for clean hydrogen, reducing agricultural waste while fueling India’s energy transition. But with global players like the EU and China racing to dominate the sector, the state must move swiftly—or risk being outpaced.
