State governments are increasingly driving the push for green hydrogen ecosystems 

The Union Government launched the National Green Hydrogen Mission in 2023 to make India a global hub for green hydrogen. It set an annual production target of 5 million metric tons by 2030. It envisaged a cluster-based model to overcome the transport challenges of green hydrogen and boost economies of scale. States are now formulating green hydrogen policies in line with this, defining their own focus areas, production targets, financial incentives and infrastructure plans. Many of the frontrunners are known for their renewable energy capacity, transport infrastructure and industrial hubs. We take a closer look at five of them here – Odisha, Gujarat, Tamil Nadu, Maharashtra, Andhra Pradesh, Kerala, Himachal Pradesh and Uttar Pradesh. 

Odisha – investments, incentives and pilot projects

Odisha's Investment Promotion Resolution 2022 identified green hydrogen as a thrust sector. It offered full electricity duty exemption and INR 3/unit power tariff reimbursement for 20 years, along with capital investment subsidies. The state further promoted green hydrogen through the Odisha Electricity Regulatory Commission (Promotion of Renewable Energy through Green Energy Open Access) Regulations 2023. It has greenlighted investments in green hydrogen and ammonia projects, led by players like ReNew, Welspun and Sembcorp. Singapore-based Sembcorp has also signed MoUs to develop a green hydrogen facility with a projected capacity of 0.72 mtpa. Odisha is also part of the green hydrogen transport pilot, with a bus route running from Bhubaneswar to Konark and Puri. 

Gujarat – tapping into industrial demand

Gujarat’s refineries and fertilizer plants account for almost 25% of India’s hydrogen demand. The state also has the second-highest renewable energy capacity in India. Its green hydrogen policy seeks to improve the ease of doing business and achieve round-the-clock renewable power. It has identified green hydrogen and electrolyzers as ‘thrust manufacturing sectors’ under the Atmanirbhar Gujarat Scheme for Assistance of Industries. This provides financial incentives like interest subsidies, tax rebates and exemptions from stamp duty and registration charges. The state has also offered 500,000 acres of land on a 40-year lease for green hydrogen production. Gujarat further aims to establish Deendayal Port as a green hydrogen export hub, in line with the Maritime India Vision 2030. 

Tamil Nadu – industrial strategy with global partners

Tamil Nadu is working with the Green Hydrogen Organisation, or GH2, to pursue its Green Hydrogen Policy. This involves creating a robust hydrogen ecosystem by planning new projects, setting production targets, building global alliances, developing certification standards and creating skill frameworks. The Policy envisions regional hubs for networking, land acquisition, investment approvals and investment promotion. In 2023, the state government unveiled its flagship green hydrogen hub at Thoothukudi. This hub will integrate green hydrogen production, storage units, and distribution networks, as well as feeding exports through the VO Chidambaranar Port. The project has attracted global stakeholders including Singapore’s Sembcorp and Malaysia’s Petronas. 

Andhra Pradesh – a diversified green energy economy

The Andhra Pradesh Green Hydrogen & Green Ammonia Policy 2023 aims for 0.5 MTPA green hydrogen production within five years and significant exports by 2030. The state has offered incentives like tax rebates and electricity duty waivers to attract investment. Major upcoming projects in the state include a USD 115 million green hydrogen plant in Tirupati, as well as India's largest green hydrogen hub near Visakhapatnam. The latter is envisioned as a catalyst for the state’s new energy ecosystem, combining electrolyzer and fuel cell manufacturing, ancillary industries, start-up incubators and testing facilities. It will produce and export green hydrogen as well as green ammonia, methanol and sustainable aviation fuel. The state has also signed an MoU with NITI Aayog to advance its energy transition.

Maharashtra – subsidies and financial benefits to the fore

Maharashtra was the first state to approve a green hydrogen policy, the Maharashtra Harit Hydrogen Policy in 2023, which mandated the use of renewable energy for hydrogen production. It aims to produce 500kt of green hydrogen per annum by 2030. The state has approved nearly USD 1 billion for financial incentives in line with this policy. This includes capital cost subsidies up to 30% for hydrogen projects, fuel cell vehicles, refueling stations and pipelines. It provides for a 60% discount on transmission charges and waivers on electricity duty for hydrogen power projects, as well as exemptions on water charges and stamp duty. The policy also offers subsidies for green hydrogen blended with natural gas. Maharashtra is further establishing a green hydrogen Center of Excellence, along with strategic hubs for key industrial sectors. For instance, a green hydrogen valley has been mooted in Pune to support the specialty chemicals sector.

Kerala – ‘hydrogen valleys ' and export focus

Kerala has set itself an ambitious target – 30% green hydrogen blending in total hydrogen consumption by 2027, and 25% hydrogen from green sources by 2030. It is also focused on exporting green ammonia, given its port infrastructure and coastal location. Kerala’s geography also informs its focus on floating solar and pumped hydro storage power projects as renewable energy sources for green hydrogen production. The state is promoting ‘green hydrogen valleys’ in Thiruvananthapuram and Kochi to build integrated infrastructure across the hydrogen value chain. It is also collaborating with research institutions to explore new hydrogen production methods, such as from agricultural waste. It is further evaluating green hydrogen-powered long-haul transport vehicles and water transport to cut fuel imports. 

Uttar Pradesh – emphasizing the ease of doing business

The Uttar Pradesh Green Hydrogen Policy aims for 1 MMTPA of production capacity by 2028. It offers capital subsidies up to 40%, till a maximum of USD 25 million. Under the policy, the state government enables subsidized land allocation for hydrogen projects, including for captive solar plants. Revenue land is to be provided at a token fee of INR 1 per acre per year for public sector green hydrogen projects, while the lease rate for private investors is ~USD 170 per acre per year. Land used for green hydrogen projects is also exempted from stamp duty charges. There are ten-year exemptions on electricity duty and transmission charges. For ease of doing business, the state offers single-window clearances and dedicated water resources for green hydrogen projects. It is also supporting investments in renewable energy to boost green hydrogen production. To build domestic expertise, it has set up four Centers of Excellence for research on green hydrogen.

Himachal Pradesh – building on renewable energy strength

Himachal Pradesh’s unique geography makes it a leader in hydroelectricity, among other renewable energy sources. The state government is now setting up India’s first 1 MW green hydrogen plant in Solan district. It has also signed an agreement with Oil India to develop green hydrogen projects. This is part of a broader green energy push, which includes a 500 MW solar energy target, to make Himachal Pradesh’s India’s first full-fledged ‘green energy state’ by 2026. The state is expanding investments in renewable energy projects to ensure a consistent and sustainable supply of green electricity for electrolysis. It is also working with the National Hydroelectric Power Corporation to set up a pilot green hydrogen mobility project, which could power buses for the state-run Himachal Road Transport Corporation.