The Ministry of New and Renewable Energy (MNRE) has introduced a framework for implementation to encourage the annual production of 200,000 metric tonnes (MT) of green hydrogen. The MNRE may determine any additional capacity for subsequent phases, if applicable. The incentives will be awarded for a duration of three years.
The incentives for producing and delivering cost-effective green hydrogen to refineries through a competitive selection process fall under Mode 2B of the strategic interventions for green hydrogen transition (SIGHT) initiative. The programme, encompassing all modes, has a comprehensive budget of Rs 130.5 billion. During the initial year, the incentive stands at Rs 50 per kg, followed by Rs 40 per kg in the second year, and further reduced to Rs 30 per kg in the third year. The incentives under the SIGHT programme cannot simultaneously qualify under two distinct modes. The assigned capacity will remain unchanged throughout the duration of the purchase agreement.
In order to be eligible for incentives, the bidder must comply with the national green hydrogen standard established by the MNRE when utilising green hydrogen in the production and distribution of green hydrogen. The Ministry of Petroleum and Natural Gas (MoPNG) reserves the right to set a minimum capacity below which no bids will be accepted. Additionally, MoPNG may set a cap, or the maximum capacity that can be provided to single bidder. Any capacity that remains unallocated during the current tranche can be transferred to the following tranche. Oil and gas companies, chosen by the MoPNG and the Centre for High Technology (CHT), will serve as implementing agencies, helping and executing various tasks delegated by the MNRE and the MoPNG.
Oil and gas companies are tasked with responsibilities such as consolidating demand, soliciting bids for the production and supply of green hydrogen, receiving and evaluating applications, and issuing acknowledgments and awards. The CHT will review incentive claims from recipients, authenticate the claims with the required documentation, and submit quarterly progress reports to the MNRE via MoPNG. Oil and gas companies and CHT are entitled to receive an annual administrative charge equivalent to 0.5 per cent of the disbursed incentive amount.
The bidders are required to possess a net worth that is at least Rs 150 million per 1,000 MT per annum of the stated production and supply capacity as of the conclusion of the preceding financial year. The bidders may be a single company, a joint venture, or a consortium comprising more than one company. A committee overseeing the scheme, headed by the secretary of the MoPNG, alongside the mission director of National Green Hydrogen Mission and additional experts, will regularly assess the progress and performance of green hydrogen production capacities.