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India's demand for hydrogen is expected to nearly double to around 12 million tonnes per annum (mtpa) by 2030, driven primarily by fertilisers, refining and petrochemicals, while falling production costs could make green hydrogen and green ammonia commercially viable within the decade, according to a sector update by Nuvama Institutional Equities citing analysis by the Council on Energy, Environment and Water (CEEW).
The report highlights that fertilisers are expected to account for about 51% of India's hydrogen demand by 2030, followed by refining at 38% and petrochemicals at 11%. New demand from sectors such as steel, long-haul transport, shipping and power generation is likely to emerge beyond 2030 as green hydrogen becomes more affordable and infrastructure expands. Green ammonia (GNH3) is also nearing commercial feasibility. Recent tender prices for green ammonia ranged between USD 594 and USD 774 per tonne, with a weighted average of about USD 637 per tonne, close to the five-year weighted average landed cost of imported grey ammonia at around USD 676 per tonne. This suggests green ammonia could offset nearly one-third of India's ammonia imports in the medium term, the report said. Currently, green hydrogen (GH2) costs USD 3.5-4 per kg in India, significantly higher than grey hydrogen at about USD 2.2 per kg, limiting large-scale adoption. However, policy support and technology improvements could halve green hydrogen costs to nearly USD 1.6 per kg by 2030, Nuvama said, pointing to measures such as waivers on power banking and open-access charges, lower renewable energy costs and sharp declines in electrolyser prices. A major cost lever is electrolyser manufacturing. Electrolyser stacks, which account for about 40% of production costs, could see price reductions of up to 75% through technological improvements, material optimisation and indigenisation. CEEW estimates that as much as 82-88% of the electrolyser supply chain could eventually be localised in India, strengthening domestic manufacturing and lowering costs further. India's National Green Hydrogen Mission, with an outlay of roughly USD 2.5 billion, along with additional state-level incentives estimated at nearly USD 61 billion, is expected to play a critical role in accelerating adoption. According to Nuvama, companies such as Reliance Industries and Waaree are likely to be early beneficiaries of India's green hydrogen push as demand and policy support scale up over the coming years. (ANI)
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