A new briefing by the Institute for Energy Economics and Financial Analysis (IEEFA) reports that India’s green hydrogen sector has gained significant momentum following the launch of the National Green Hydrogen Mission (NHGM) in January 2023. The mission, supported by an outlay of INR 197 billion (USD 2.2 billion), aims to develop 5 million metric tonnes per annum (MMTPA) of green hydrogen production capacity by 2030.
Project Pipeline Expands Rapidly
As of August 2025, a total of 158 green hydrogen projects were at various stages of development, according to the briefing note. Key details include:
-94% (~11.2 MMTPA) of capacity has been announced, though many project specifics remain undisclosed.
-0.1% (9,770 TPA) of capacity is currently under construction.
-2.8% (0.3 MMTPA) is already operational.
“Announced capacity is nearly 2.4 times the government’s target, showing strong investor interest,” said Charith Konda, Energy Specialist at IEEFA and co-author of the report. “However, uncertainties around adoption may limit how much of this will actually materialise.”
Global Headwinds Impact Development
Despite its potential to decarbonise hard-to-abate sectors like fertilisers, shipping, and aviation, the green hydrogen industry faces challenges both in India and globally. High production costs, unclear long-term demand, and differing global definitions of “green” or “low-emission” hydrogen are slowing progress and complicating the development of a global hydrogen market.
IEEFA notes that infrastructure development—including electrolysers, storage systems, pipelines, and electricity transmission networks—will be critical for scaling up production.
“In India, it is still easier to transmit electricity than hydrogen, due to the country’s established grid network,” Konda added.
Demand Outlook Strengthens
According to the briefing, green hydrogen demand in India is expected to come from three major sources:
-Replacement of existing grey hydrogen in refineries and fertiliser units
-New applications in hard-to-abate sectors
Exports
Government estimates suggest replacing all current grey hydrogen use would create 5 MMTPA of demand. Broader industry projections place India’s total hydrogen demand at 15–20 MMTPA by 2030.
With a national target of 5 MMTPA in green hydrogen production, 25–33% of total demand could be met through cleaner alternatives. Industry estimates further indicate that green hydrogen demand could reach 4.08–6.57 MMTPA if strengthened by supportive policies in steel, transport, chemicals, and export markets.
Policy Measures to Enable Growth
To support global trade, the note calls for a standardised emissions accounting framework, such as the International Energy Agency’s proposed “hydrogen product passport”, which would include emissions intensity data.
Domestically, IEEFA recommends:
-Hydrogen purchase obligations to create stable long-term demand
-Development of hydrogen hubs, clustering production, storage, and end-use infrastructure to reduce overall system costs
While India’s green hydrogen sector is expanding faster than national targets suggest, IEEFA warns that long-term growth will require strong policy support, international coordination, and accelerated domestic adoption.
“Policy nudges and decarbonisation goals will help create early demand, but sustained growth depends on concrete domestic action and global cooperation,” Konda said.
