India’s Green Hydrogen Goals at Risk as Only a Fraction of Announced Projects Advance; IESA Report

Mumbai, 8 July 2025: India’s hydrogen demand is expected to grow steadily, reaching 8.8 million tonnes per annum (MTPA) by 2032, according to a recent report by the India Energy Storage Alliance (IESA). However, the country’s green hydrogen ambitions may face significant setbacks as a majority of projects remain stuck in early stages.

Green Hydrogen Announcements Surge but Implementation Lags

During the India Energy Storage Week 2025 held at IICC Yashobhoomi, IESA released a report indicating a compound annual growth rate (CAGR) of 3% in hydrogen demand over the next seven years. While more than 9.2 MTPA of green hydrogen (GH2) capacity has been announced nationwide, only a limited number of these projects have moved forward to the Final Investment Decision (FID) stage or secured long-term purchase agreements.

Only 31% of Demand Likely to Be Met by 2032 if Current Trend Continues

IESA’s base scenario suggests that even if just 30% of announced green hydrogen capacity becomes operational in the next decade, it will be sufficient to meet only 31% of domestic demand. The supply would primarily come from electrolytic and bio-hydrogen (bio-H₂) sources.

Four States Dominate Green Hydrogen Landscape

Out of the total 9.2 MTPA in green hydrogen announcements, four Indian states account for 82% of the capacity:

• Odisha: 38 percent
• Gujarat: 26 percent
• Karnataka: 12 percent
• Andhra Pradesh: 6 percent

Additionally, 72% of these projects are focused on producing green ammonia, while 20% have yet to declare their final use case.

High Costs and Policy Gaps Continue to Hinder Progress

The report identifies major barriers, including elevated costs and regulatory issues. End-users, who make up approximately 6% of the market, face high landed hydrogen costs, largely due to storage and transportation expenses.

Current open-access electricity rules further complicate matters. These regulations restrict commercial and industrial users from fully utilising renewable energy offsets, which in turn impacts the efficiency and economic viability of electrolysers.

Hydrogen Remains Costlier Than Fossil Alternatives

The Levelized Cost of Hydrogen (LCOH) under the base case scenario is projected to be two to four times higher than hydrogen derived from fossil fuels. Even under optimistic conditions, green hydrogen is still 1.5 to 2.5 times more expensive, though this is gradually aligning with recent green hydrogen price discovery outcomes in India.

Experts Call for Accelerated Reforms and Investment

Debmalya Sen, President of IESA, voiced optimism, stating that active stakeholder engagement and supportive frameworks could help India meet its 5 MTPA green hydrogen production target by 2030.

Vinayak Walimbe, Managing Director of Customized Energy Solutions (CES), noted that despite progressive policy steps, more practical implementation is needed to address decarbonisation challenges and achieve cost parity with fossil-based hydrogen.

Report Sets the Agenda for India’s Clean Energy Roadmap

The IESA report highlights both the promise and the current limitations of India’s green hydrogen sector. As the country seeks to transition to a low-carbon economy, green hydrogen will play a critical role – provided that execution aligns with ambition.

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