The Government of India has issued guidelines for implementing pilot projects for using green hydrogen in the transport sector under the National Green Hydrogen Mission (NGHM). The scheme aims to support the development of technologies and infrastructure for replacing fossil fuels with green hydrogen and its derivatives in buses, trucks, 4-wheelers and other vehicles.
What is Green Hydrogen and why is it important?
Green hydrogen is a form of hydrogen that is produced from renewable energy sources such as solar, wind or hydro power, using an electrolyzer that splits water into hydrogen and oxygen. Unlike conventional hydrogen, which is mainly derived from natural gas or coal, green hydrogen does not emit any greenhouse gases or pollutants during its production or use.
Green hydrogen has the potential to decarbonize various sectors of the economy, such as transport, industry, power and buildings, by providing a clean and versatile energy carrier that can be stored, transported and converted into electricity, heat or other fuels. Green hydrogen can also enhance energy security, reduce dependence on fossil fuel imports and create new opportunities for innovation and employment.
What are the key features of the scheme?
The scheme guidelines for implementation of pilot projects for use of green hydrogen in the transport sector have been issued by the Ministry of New & Renewable Energy (MNRE) on February 14, 2024. The scheme will be implemented with a total budgetary outlay of Rs. 496 Crores till the financial year 2025-26.
The scheme will support two types of pilot projects:
- Pilot projects for development of technologies for use of green hydrogen as a fuel in buses, trucks and 4-wheelers, based on fuel cell-based propulsion technology or internal combustion engine-based propulsion technology.
- Pilot projects for development of infrastructure such as hydrogen refuelling stations.
The scheme will also support any other innovative use of hydrogen for reducing carbon emissions in the transport sector, such as blending of methanol / ethanol based on green hydrogen and other synthetic fuels derived from green hydrogen in automobile fuels.
The scheme will be implemented through the Ministry of Road Transport and Highways and the Scheme Implementing Agencies (SIAs) nominated under this scheme. The SIAs will be responsible for preparing detailed project reports, selecting project developers through competitive bidding, monitoring project execution and ensuring compliance with technical standards and safety norms.
The scheme will provide financial assistance up to 50% of the total project cost, subject to a maximum of Rs. 25 Crores per project. The remaining cost will be borne by the project developers or other stakeholders. The financial assistance will be released in instalments based on the achievement of milestones.
What are the expected outcomes and benefits of the scheme?
The scheme is expected to result in the following outcomes and benefits:
- Development of indigenous technologies and capabilities for use of green hydrogen in the transport sector.
- Establishment of a green hydrogen ecosystem in the transport sector, including refuelling facilities and distribution infrastructure.
- Reduction of greenhouse gas emissions and air pollution from the transport sector.
- Demonstration of the technical feasibility and economic viability of transport based on green hydrogen.
- Creation of awareness and acceptance among stakeholders and public about the benefits of green hydrogen.
- Promotion of innovation and entrepreneurship in the field of green hydrogen.
How to apply for the scheme?
The interested entities can apply for the scheme by submitting their proposals to the SIAs as per the prescribed format and guidelines available on the MNRE website. The proposals will be evaluated by a Project Appraisal Committee (PAC) constituted by MNRE. The PAC will recommend the shortlisted proposals to MNRE for approval. The approved proposals will be issued sanction letters by MNRE. The project developers will have to sign a tripartite agreement with MNRE and SIA before commencing the project implementation.
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