India's green hydrogen plants run far behind announced capacity

What happened

India launched its National Green Hydrogen Mission in January 2023. The target is 5 million tonnes of green hydrogen a year by 2030, for refineries, fertiliser, steel, transport and shipping. The mission has a total budget of Rs 19,744 crore. Business Today compared that plan with what is actually running today. According to GH2 India, the country produces about 12,000 tonnes of green hydrogen a year. Announced projects add up to 11.2 million tonnes, and projects with government incentives add up to 862,000 tonnes.

The big company projects are slow. Reliance announced a 3 GW electrolyser factory in August 2024 that was first expected to run by the end of 2026. A company spokesperson told the magazine it is under construction but gave no production date. Adani announced a 5 GW electrolyser plant in 2022 and has not shared a schedule. L&T has put on hold a plan to expand its electrolyser capacity at Hazira in Gujarat from 400 MW to 1 GW.

The main incentive scheme, called SIGHT, offers Rs 17,490 crore. Of this, Rs 4,400 crore is for making electrolysers and Rs 13,050 crore is for producing green hydrogen. Business Today reports that none of this money has been claimed. The reason is the design of the scheme: it pays only after production starts, and very little production has started. A separate June 2026 column in Business Today found that only about 1.27 percent of the mission's approved budget had been spent by March 2026.

Other trackers show the same pattern. Business Today cites the Institute for Energy Economics and Financial Analysis (IEEFA), which in November 2025 followed 158 Indian projects. It found that 94 percent of the planned capacity had not moved past the announcement stage, and only 2.8 percent was operating. GH2 India told the magazine that the problem is sector-wide. It said the industry does not want more subsidies but wants users to be required to switch, starting with about 10 percent a year.

The engineering behind it

Green hydrogen is made by electrolysis. Electricity from renewable sources passes through water and splits it into hydrogen and oxygen. The machine that does this is an electrolyser. As general knowledge, electrolysers run on direct current, so they need large rectifiers to convert grid alternating current. A plant of hundreds of megawatts is one of the biggest single electrical loads a grid can carry, and its power electronics, transformers and grid connection are a large part of the cost.

India's own certification rules, set in 2025, define green hydrogen as hydrogen that releases no more than 2 kilograms of carbon dioxide equivalent for each kilogram produced. The country already makes about 6.5 million tonnes of grey hydrogen, which is hydrogen made from natural gas, all of it for use inside the same plants. Refineries and fertiliser factories already use hydrogen, so they are the easiest places to switch. Transport and shipping are harder, because they need new fuelling stations and changed engines or fuel cells.

Cost is the main barrier. Business Today reports that green hydrogen cost $5 to $6 per kilogram before the mission. It now costs $3.5 to $5 without subsidy. Grey hydrogen costs about $1.9 to $2.5. GH2 India estimates that switching from grey to green would roughly double a refinery's hydrogen production cost. Reliance, according to its spokesperson, sees green hydrogen becoming viable only below $1 per kilogram. In general, electricity is the largest share of the cost, so cheap and steady power decides whether a plant can compete.

Exports are also harder than planned. India hoped to supply about 10 percent of world demand for green hydrogen and its products. Gopal Sarangi of The Energy and Resources Institute (TERI) told Business Today that the European Union has stricter rules. It requires new renewable plants, hourly matching of power supply and electrolyser use, and the power source to be in the same area. India defines green hydrogen only by carbon intensity, so its product may not qualify in Europe.

What it means in Nepal

Nepal has also studied green hydrogen. In January 2026 the Global Green Growth Institute (GGGI) published a report on using hydrogen from hydropower to make ammonia and fertiliser in Nepal. It compared three types of electrolyser: alkaline, polymer electrolyte membrane and solid oxide. It recommended alkaline electrolysers for fertiliser production in Nepal. The report is a study, not a project, and no plant has been announced on that basis.

India's numbers give a useful warning for anyone planning such a project. Building electrolysers is only one half of the problem. A plant also needs a buyer who signs a long contract at a price that covers the cost. Industry voices quoted by Business Today ask for mandatory demand, long-term purchase contracts and carbon pricing, because subsidies on the supply side alone have not created buyers.

For an engineer, the work is a mix of electrical, chemical and economic design. Sizing the rectifiers, choosing how many hours a year the plant should run, and deciding whether to use only surplus power or a steady supply all change the final price of each kilogram. A student who can model these trade-offs, and who can read a cost table as carefully as a circuit diagram, has a skill that applies to any large energy project.