The price of green hydrogen in India has dropped by more than $1 per kilogram in recent tenders floated by state-owned oil companies, Oil Minister Hardeep Singh Puri said on Thursday, reports The Economic Times.
From $5.5 per kg, green hydrogen — produced by splitting water using renewable electricity — now costs between $4.4 and $4.5 per kg in the latest bids. The fuel can replace coal or natural gas in industries such as steel, cement, and chemicals, as well as fossil fuel-derived grey hydrogen in refineries and ammonia production.
In a tender for 10,000 tonnes per year at Indian Oil Corporation’s Panipat refinery, Larsen & Toubro offered a tax-inclusive price of $4.5 per kg for 25 years. Subsequent 5,000-tonne tenders floated by Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) saw bids as low as $4.39 per kg from Ocior Energy. Puri expressed optimism that prices would continue to fall in future tenders.
India aims to become a global leader in green hydrogen, targeting production of 5 million tonnes per year by 2030. The Green Hydrogen Mission, launched in 2021, seeks to capture 10% of the global market and position India as a trusted hub for low-carbon hydrogen.
“Green hydrogen is the fuel of the future. It will succeed where there is local demand, local production, and local consumption. Few places in the world are as uniquely qualified as India to make that happen,” Puri said at the World Hydrogen India conference. He highlighted the need for urgent policy support and active participation from state governments to scale up production, lower costs, enable exports, and strengthen energy security.
According to S&P Global Commodity Insights, hydrogen demand is expected to grow at 3.5% annually, reaching 220 million metric tonnes by 2050, with 60% coming from low-carbon sources.
