Source: The post India needs phased strategy to promote hydrogen as fuel has been created, based on the article “Hydrogen fuel: Move slowly from grey to green” published in “Businessline” on 17 June 2025.
UPSC Syllabus Topic: GS Paper3- Infrastructure-Energy
Context: India’s National Green Hydrogen Mission (NGHM) aims to make the country a global hydrogen leader, starting with green hydrogen. However, the high production cost and lack of domestic demand pose serious challenges. A recent study suggests a phased, multi-colour approach to overcome these hurdles, especially in the transport sector.
For detailed information on India’s Path to Overcome Green Hydrogen Challenges read this article here
Pricing and Demand Challenges
- High Cost of Green Hydrogen: Green hydrogen is currently priced at ₹397/kg, as per Indian Oil Corporation’s tender, with final costs exceeding ₹450/kg after supply and distribution. This makes it economically unviable compared to conventional fuels.
- Lack of Domestic Demand: Despite policy mandates, domestic demand for green hydrogen is limited. Most producers are focusing on exports of green derivatives like ammonia and methanol, which face better global offtake prospects.
- Imbalance Between Supply and Demand: The study highlights a pressing mismatch between supply capabilities and actual consumption within India. Export-led strategies are insufficient to build a self-sustaining hydrogen economy.
Importance of Hydrogen in Mobility
- Transformational Role in Transport: Hydrogen, especially in Fuel Cell Electric Vehicles (FCEVs), offers high energy output with minimal emissions. Its potential in decarbonizing mobility is significant but underexplored in India.
- Diverse Production Sources: Hydrogen can be generated from fossil fuels or renewables. Its versatility allows for broader applications across different transport technologies, supporting a shift to cleaner energy.
- Slow Domestic Progress: India’s mobility transition using hydrogen remains slow due to unclear global demand for green derivatives and lack of domestic incentives or infrastructure for hydrogen-powered transport.
Exploring Grey, Blue, and Green Hydrogen
- Grey Hydrogen as a Starting Point: Grey hydrogen, produced from natural gas via steam reforming, is widely available and cheaper at ₹175–200/kg. It could be sold at ₹250/kg, offering a practical short-term solution.
- Blue Hydrogen as a Medium-Term Strategy: Blue hydrogen involves carbon capture and storage (CCS) during production. It delivers substantial emission reductions and fits well with existing industrial infrastructure.
- Green Hydrogen as a Long-Term Goal: Green hydrogen, produced via electrolysis using renewable energy, should be reserved for high-impact use cases such as public transport, export hubs, and urban corridors due to its current high cost.
Proposed Phased Approach for India
- Multi-Colour Hydrogen Strategy:,The study urges India to adopt a step-by-step transition: start with grey for immediate needs, shift to blue for scalable adoption, and ultimately aim for green hydrogen in targeted sectors.
- Applications in Pilot Projects: Grey hydrogen can be deployed in retrofitted hydrogen ICE trucks and pilot mobility programs to build demand and familiarity.
- Strategic Use of Green Hydrogen: Green hydrogen should be used selectively while building electrolyzer capacity and increasing renewable integration to reduce its cost over time.
Infrastructure and Policy Roadmap
- Need for Refuelling Ecosystem: Creating hydrogen refuelling infrastructure is critical for making hydrogen mainstream in daily transport use.
- Five-Pronged Refuelling Strategy
The study suggests:
- Integrating hydrogen into the Gati Shakti Master Plan
- Offering conditional Viability Gap Funding (VGF)
- Developing hydrogen valleys
- Promoting franchise + anchor ownership models
- Supporting indigenization via strategic licensing
- Urgency of a Clear Strategy: To position hydrogen as a viable fuel, India must act with urgency and implement a pragmatic, coordinated approach involving technology, finance, and infrastructure development.
Question for practice:
Examine the challenges and strategic approaches involved in promoting hydrogen as a viable fuel source in India.
