CII calls on the government to impose green hydrogen mandates for sectors like refining and fertilisers to boost demand. It suggests a phased approach with financial support like carbon credits and viability gap funding to bridge the cost gap.
The Confederation of Indian Industry (CII) has formally called upon the government to implement robust green hydrogen mandates to catalyse demand and solidify India's position in the global green energy economy. In a comprehensive proposal released in New Delhi, the industry body emphasised that introducing blending requirements for high-consumption sectors such as refining, fertilisers, and natural gas is essential to bridge the current economic gap between traditional grey hydrogen and its cleaner green counterpart. By establishing these mandates, the CII believes the government can provide the necessary market certainty for producers, eventually driving down costs through rapid economies of scale.
Phased Approach and Financial Support
To mitigate the financial burden on industry and consumers, the CII suggests a phased approach supported by innovative cost-offset mechanisms. These include the allocation of carbon credits for emissions saved, viability gap funding, and cross-subsidisation strategies, particularly within the fertiliser industry, where cheaper natural gas could be offered in exchange for green hydrogen blending.
Building on Clean Energy Milestones
This transition follows a landmark year in 2025, when India's non-fossil fuel installed capacity surged to over 266 GW. According to Chandrajit Banerjee, Director General, CII, India should take the next leap in promoting green technologies after it marked a record-breaking year in its clean energy journey in 2025, with non-fossil-fuel installed capacity rising to 266.78 GW.
"While this represented a 22.6 per cent increase over 2024 with 49.12 GW of new non-fossil capacity being added over 217.62 GW in 2024, the next level of development will come with important technologies like green hydrogen being promoted," he said.
Strategic Shift in Public Procurement and Infrastructure
Beyond industrial mandates, the industry body is pushing for a strategic shift in public procurement. By requiring that 10 to 15 percent of materials used in public infrastructure projects--such as steel, cement, and ammonia for bridges and railways--be sourced from green hydrogen-based units, the government could create a predictable and bankable offtake for producers. This move would be further strengthened by the development of industrial green hydrogen clusters in high-potential regions like Gujarat, Maharashtra, Tamil Nadu, and Odisha. These hubs would allow smaller users, including MSMEs in the ceramics and chemicals sectors, to aggregate demand and share the costs of essential infrastructure like pipelines and storage through public-private partnerships.
Positioning India as a Global Exporter
On the global stage, the CII is urging the government to position India as a premier exporter by targeting a 5 to 7.5 percent share of the projected global import market. To achieve this, the proposal highlights the need for bilateral trade agreements with key partners such as Germany, Japan, and South Korea, as well as the harmonisation of certification standards. Granting "deemed export" status to green hydrogen derivatives would further enhance competitiveness.
Support for Exporters and Navigating Carbon Regulations
Furthermore, targeted support for steel and chemical exporters is deemed critical to navigate international carbon regulations, such as the EU's Carbon Border Adjustment Mechanism, ensuring that Indian products remain attractive in carbon-sensitive premium markets while attracting much-needed private investment into early-stage projects. (ANI)
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