The cost of producing green hydrogen in India is expected to drop significantly over the next decade, reaching $2 per kilogram by 2032, according to Abhay Bakre, Director of the National Green Hydrogen Mission (NGHM). The projection underscores the government’s confidence in scaling up renewable hydrogen production to drive decarbonisation in heavy industries, particularly steel.

Speaking at an industry event, Bakre highlighted that the falling costs of green hydrogen would be crucial in making it competitive with fossil fuel-based alternatives such as grey or brown hydrogen. “The way we are going ahead, I am sure the cost of green hydrogen will also keep coming down and by 2032 or 2035 it will be almost on a par with any other hydrogen like brown hydrogen. That will pave the way for the best option for the decarbonisation of the steel sector,” he said.

India’s steel industry, one of the largest in the world, is heavily dependent on fossil fuels — primarily coal — for producing steel from iron ore. Transitioning to green hydrogen as a clean fuel for heating furnaces and processing steel could cut millions of tonnes of carbon emissions annually.

The urgency for this transition has increased with the European Union’s plan to implement its Carbon Border Adjustment Mechanism (CBAM) from January 1, 2026. The policy will impose a carbon tax on Indian steel, aluminium, and other carbon-intensive exports. For India’s steelmakers, adopting green hydrogen is not only about climate responsibility but also about maintaining competitiveness in global markets.

Despite the promise of cost reduction, Bakre cautioned that several key issues need to be addressed before green hydrogen adoption in hard-to-abate sectors becomes widespread. Challenges include scaling electrolyser manufacturing, securing reliable renewable energy at competitive prices, and developing infrastructure for hydrogen transport and storage.

Electrolyser costs currently account for around 30–40 per cent of green hydrogen production expenses. While government incentives, such as subsidies under the National Green Hydrogen Mission, are expected to ease these costs, industry leaders emphasise the need for continued policy support and international collaboration.

Launched in 2023, the National Green Hydrogen Mission aims to make India a global leader in clean hydrogen by targeting annual production of 5 million tonnes by 2030. The mission also focuses on building a robust domestic value chain, including electrolyser manufacturing, renewable power integration, and industrial-scale applications across steel, fertilisers, and refining.

Source:

https://www.business-standard.com/industry/news/green-hydrogen-cost-in-india-to-fall-to-2-per-kg-by-2032-mission-director-125090901008_1.html