The Uttar Pradesh Draft Green Hydrogen Policy 2022 aims to emphasise the importance of encouraging innovation in order to reduce costs over time. The current hydrogen demand in the state is around 0.9 million tonnes annually that is primarily used for production of nitrogenous fertilisers. The policy aims to make a transition of the state towards a green hydrogen economy by focusing on the chemical, fertiliser, and refinery sectors. The policy will be in effect for the next five years.
Furthermore, the state intends to achieve 20 per cent green hydrogen blending in total hydrogen consumption for existing fertiliser and refinery units by 2028. In 2024, the draft policy proposes a capital expenditure subsidy of 60 per cent of the cost of the electrolyser. The minimum capacity to qualify for the subsidy must be greater than 50 MW. By 2027, the state government’s monetary incentive will be reduced to 20 per cent.
Also, a state-level committee will be established to carry out all the tasks, including the monitoring and evaluation of the policy. The policy also proposes 30 per cent one-time grant support for technology acquisition up to a maximum of Rs 50 million for R&D centres and industries.
Green hydrogen and ammonia projects that use water to produce green hydrogen will be exempted from paying land tax, land use conversion charges, stamp duty, and industrial water consumption charges. The entire Goods and Services Tax paid for the production of green hydrogen and ammonia will be reimbursed. Electricity used to generate green hydrogen and ammonia will only be charged 50 per cent of wheeling and intrastate transmission fees.
The centre will also promote a skill development programme to build the state’s capacity and train a workforce to be ready for the green hydrogen and ammonia transition. There will be no distribution or cross-subsidy surcharges. The policy encourages the establishment of a centre of excellence with various academic and research institutions to aid in the development of a sustainable green hydrogen and ammonia ecosystem.