Indian state of Uttar Pradesh pledges over $600m in subsidies for green hydrogen projects
The northern Indian province of Uttar Pradesh is to offer billions of rupees of subsidies to green hydrogen industries setting up in the state, in pursuit of an ambitious goal to produce one million tonnes of renewable H2 annually within the next four years.
The state cabinet yesterday (Tuesday) signed off its five-year green hydrogen policy, earmarking 50.4bn rupees ($608m) for a subsidy programme to incentivise enough capacity for the 2028 target.
If successful, the policy would make up one fifth of India’s target of reaching five million tonnes of annual production by 2030, under its National Green Hydrogen Mission.
Significantly, Uttar Pradesh’s policy will target existing demand — mostly in industrial processes such as chemicals and oil refining — to replace grey hydrogen made using unabated fossil fuels.
“So far, hydrogen production technology has relied on gas, known as grey hydrogen,” said Uttar Pradesh energy minister Arvind Kumar Sharma. “A significant effort is now under way to transition from grey hydrogen to green hydrogen. The policy outlines an ambitious goal to produce one million metric tonne of green hydrogen annually within the next four years, by 2028.”
The first ten projects to successfully apply for financial support could be see up to 40% of their capex costs covered by the government, while subsequent successful applicants could have 10-30% of their capex costs met.
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Producers, who will be granted fast-track environmental permitting, will also be eligible for a full rebate on transmission charges associated with using the intrastate grid, as well as full exemption from electricity tax (for ten years) and stamp duty.
In addition, the Uttar Pradesh government is also proposing to lease land for a single rupee per acre per year to state-owned enterprises setting up green hydrogen projects in the state.
Private renewable H2 investors will be eligible for a land lease rate of 15,000 rupees ($181) per acre per year.
