According to Vineet Bhatia, executive director, Grant Thornton Bharat, India’s fiscal support under NGHM for green hydrogen and its derivatives are creating an initial ecosystem for establishing the market, however, there is a necessity to provide additional support.
“Support such as including tax holiday or concessional corporate tax, additional fiscal support for production of green molecules, and electrolyzer manufacturing which would increase India’s competitiveness in the global platform and counter the green subsidies offered by global counterparts,” he said.
He added that unless like other global markets which heavily rely on sizable green subsidies, India is uniquely placed to supply renewable electricity RTC in a cost effective way, which would enhance the off take by demand markets.
Bhatia said there is a necessity to develop the domestic market to drive the scale in investment and create a buffer for the demand market, in order to protect the investment growth against adverse scenarios as we already see key off-take markets are getting crowded with supply options from global competition.
“While the Budget missed the opportunity to address it, MNRE should come up with additional tranche of fiscal and non-fiscal support to push the market from early stage to growth stage and keep the momentum,” he added.
Sanjeev Kaul, Head - Green Molecule Business, Jakson Green said that they were not expecting any major announcements in this Budget, as the government already took the lead with initiatives like SIGHT.
The government has earlier announced INR 4,500 crore under the Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme.
“We believe the government is working on various other initiatives to support the industry in reducing the price gap between grey and green hydrogen,” he said.
He added that the Budget's announcement of large fiscal support for infrastructure will enhance investments in GH2 mobility. The allocation of capital for climate change adaptation and mitigation related investments will benefit the hydrogen value chain.
Kunal Saxena, Head – Strategic Investments at AMPIN Energy Transition said that the PLI scheme alone isn’t sufficient.
“To ensure a robust transition to green hydrogen the government should issue a regulatory mandate on demand side for switching to green hydrogen, coupled with fiscal incentive for adoption, reduce electrolyser cost through easing of duties and taxes, subsidise RTC green power,” he said.
He added that pipeline infrastructure for GH2 transportation should be developed along with low-cost financing of projects under priority/thrust sector.
Charith Konda, Energy Specialist, India Mobility and New Energy, Institute for Energy Economics and Financial Analysis said that although the Interim Budget allocated INR 600 crore for green hydrogen initiatives, the intended use of these funds remains unclear.
“The Budget speech could have provided valuable clarity by outlining specific initiatives that will benefit from this allocation,” he said.
Konda added that the government missed an opportunity to address key challenges facing the industry, including offtake concerns, evolving standards, and the need for hydrogen storage and transportation infrastructure. A clear roadmap or indications of support measures would have been welcome in the Budget, he said.
Earlier this year, the Interim Budget for 2024-25 provided for a Budgetary allocation of INR 600 crore for the National Green Hydrogen Mission, which was a whopping 102 per cent increase over the previous INR 297 crore provided in the Expenditure Budget document for 2023-24.
Now, in the full Budget of 2024-25, the government has not made any changes to the allocation announced in the Interim Budget presented in February this year.
According to Sudipa Majumdar, Director, IRADe and Navpreet Saini, Senior Research Analyst, IRADe there were anticipations of Budgetary allocations in the wind and green hydrogen sectors along with additions of new capacities, in line with the solar and nuclear initiatives.
“Unfortunately, there were no announcements by the Finance Minister about strengthening the wind, biomass or the green hydrogen ecosystems in India,” he said.
Ashwin Jacob, Partner & Industry leader, Energy, Resources & Industrials, Deloitte India said that while green hydrogen might not have been a major highlight in the Budget – in terms of a significant mention – there were a few upcoming announcements that clearly indicate that it is still a priority.
He said that the government's multiple-pronged approach towards renewable energy initiatives coupled with the above will ensure that the country will develop its GH2 pathways in a balanced manner.
The Green Hydrogen Mission was launched with an initial outlay of INR 19,744 crore, including an outlay of INR 17,490 crore for the SIGHT programme, INR 1,466 crore for pilot projects, INR 400 crore for R&D, and INR 388 crore towards other Mission components. It aims to make India a global hub for manufacturing of this clean source of energy.
MNRE will formulate scheme guidelines for implementation of the respective components.
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