The Punjab Energy Development Agency has released a draft green hydrogen policy aiming to achieve a green hydrogen and ammonia production capacity of 100 kilo tonnes per annum by 2030. The policy proposes extending incentives under the existing “Punjab Industrial and Business Development Policy 2022” to new green hydrogen and ammonia ventures and expanding the existing units, with benefits varying by project category. Regulatory support under the “New & Renewable Sources of Energy Policy 2012” is also highlighted, including a full 100 per cent exemption from electricity duty during the construction phase. The policy suggests waiving charges related to converting agricultural land for industrial use, including land use change and external development fees, and proposes a 100 per cent exemption from stamp duty on land registration and lease activities.
To enhance economic viability of green hydrogen projects, the policy includes several exemptions on energy-related charges. Cross-subsidy and additional surcharge will not apply to green energy used for green hydrogen and ammonia production. It proposes concessions on contract demand charges for green energy users and a 50 per cent exemption on intra-state transmission and wheeling charges. For projects commissioned before December 31, 2030, inter-state transmission charges imposed by the Central Transmission Utility of India Limited would be waived for 25 years. Additionally, the policy also introduces a framework allowing renewable purchase obligation compliance through green hydrogen or ammonia purchases, with a method to convert hydrogen usage into MWh. Furthermore, Punjab State Power Corporation Limited may procure and supply renewable energy to producers at tariffs set by the Punjab State Electricity Regulatory Commission.
The draft proposes direct financial incentives including a capital subsidy of up to Rs 150 million per project for biomass-to-green hydrogen projects, limited to Rs 30 million per tonne per day (TPD) capacity and capped at five TPD. The incentive will be limited for the first ten such projects. For transportation, a 20 per cent capital subsidy of up to Rs 5 million per vehicle is proposed for the first 100 hydrogen-based fuel cell trucks and buses. Additionally, a consumption-based subsidy of Rs 50 per kg is proposed for the first ten industries in Punjab using green hydrogen, valid for five years. For refueling infrastructure, the policy includes a 20 per cent capital cost subsidy, capped at Rs 30 million, for the first ten hydrogen refueling stations established in the state.
