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India's Green Hydrogen Boom: How Costs Could Halve by 2030

A new report paints an optimistic picture for green hydrogen in India. Demand is expected to nearly double by the end of the decade, led by the fertiliser industry. Crucially, production costs could be cut in half, making it much more competitive. This shift is supported by strong government policy and potential for major cost reductions in key technology like electrolysers.

Key Points: India Green Hydrogen Demand to Double by 2030 Says Nuvama-CEEW

  • Fertiliser sector to drive over half of India's hydrogen demand by 2030
  • Green ammonia prices are nearing parity with imported grey ammonia
  • Electrolyser costs could drop 75% through tech and localisation
  • Policy support from national and state missions is critical for adoption
2 min read

India's Green Hydrogen demand seen doubling by 2030 as costs fall, says Nuvama-CEEW Study

A new study forecasts India's hydrogen demand will double by 2030, driven by fertilisers and refining, with green hydrogen costs potentially halving.

"Green ammonia could offset nearly one-third of India's ammonia imports in the medium term. - Nuvama-CEEW Study"

New Delhi, December 15

India's demand for hydrogen is expected to nearly double to around 12 million tonnes per annum (mtpa) by 2030, driven primarily by fertilisers, refining and petrochemicals, while falling production costs could make green hydrogen and green ammonia commercially viable within the decade, according to a sector update by Nuvama Institutional Equities citing analysis by the Council on Energy, Environment and Water (CEEW).

The report highlights that fertilisers are expected to account for about 51% of India's hydrogen demand by 2030, followed by refining at 38% and petrochemicals at 11%.

New demand from sectors such as steel, long-haul transport, shipping and power generation is likely to emerge beyond 2030 as green hydrogen becomes more affordable and infrastructure expands.

Green ammonia (GNH3) is also nearing commercial feasibility. Recent tender prices for green ammonia ranged between USD 594 and USD 774 per tonne, with a weighted average of about USD 637 per tonne, close to the five-year weighted average landed cost of imported grey ammonia at around USD 676 per tonne. This suggests green ammonia could offset nearly one-third of India's ammonia imports in the medium term, the report said.

Currently, green hydrogen (GH2) costs USD 3.5-4 per kg in India, significantly higher than grey hydrogen at about USD 2.2 per kg, limiting large-scale adoption.

However, policy support and technology improvements could halve green hydrogen costs to nearly USD 1.6 per kg by 2030, Nuvama said, pointing to measures such as waivers on power banking and open-access charges, lower renewable energy costs and sharp declines in electrolyser prices.

A major cost lever is electrolyser manufacturing. Electrolyser stacks, which account for about 40% of production costs, could see price reductions of up to 75% through technological improvements, material optimisation and indigenisation.

CEEW estimates that as much as 82-88% of the electrolyser supply chain could eventually be localised in India, strengthening domestic manufacturing and lowering costs further.

India's National Green Hydrogen Mission, with an outlay of roughly USD 2.5 billion, along with additional state-level incentives estimated at nearly USD 61 billion, is expected to play a critical role in accelerating adoption.

According to Nuvama, companies such as Reliance Industries and Waaree are likely to be early beneficiaries of India's green hydrogen push as demand and policy support scale up over the coming years.

- ANI

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Reader Comments

P
Priya S
Good to see concrete numbers. The cost reduction from $4/kg to potentially $1.6/kg is the game-changer. Hope the policy support is consistent and reaches the actual manufacturers on the ground, not just the big corporates.
R
Rohit P
Fertilizers and refining taking up nearly 90% of demand makes sense for now. But I'm more excited about steel and transport using it post-2030. That's when we'll see a real industrial revolution. Jai Hind!
S
Sarah B
As an expat working in renewables here, this is very promising. The scale of ambition is impressive. The key challenge will be building the infrastructure – pipelines, storage, transport – in parallel with production. Hope the execution matches the plan.
V
Vikram M
While the mission's outlay is good, $2.5 billion seems small compared to the estimated $61 billion in state incentives? Need more central clarity. Also, hope the benefits trickle down to MSMEs and create jobs, not just enrich a few large players.
K
Kavya N
Green ammonia already close to grey ammonia prices? That's huge! This can really help our farmers if fertilizer costs come down. A sustainable and affordable solution for agriculture is the dream 🙏.

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