Green Hydrogen Incentives Likely for Polluting Sectors

Moving to large-scale use of hydrogen fuel could enhance India's geopolitical heft

- Rituraj Baruah

The Union budget for FY26 may announce financial support for green hydrogen initiatives in key polluting industries—including steel, cement, and power—according to two people aware of the matter, as high costs slow the adoption of green technologies.

The ministry of new and renewable energy has sent a proposal to offer incentives for the adoption and procurement of green hydrogen to the finance ministry, said one of the persons quoted above.

"Incentives for adoption of green hydrogen and CCUS (carbon capture, utilization and storage) are expected to be mentioned in the budget. The adoption of both green hydrogen and CCUS is key to energy transition goals. It is felt that fiscal support would be required to increase their capacity addition and usage," the person added.

Under the ₹19,700 crore National Green Hydrogen Mission (NGHM), the government currently offers supply-side support. This includes ₹17,490 crore for the production of green hydrogen and electrolyzers under the Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme.