The Gujarat government has announced the Green Hydrogen Policy 2025, setting out a detailed plan to turn the state into a major centre for green hydrogen production and exports over the next decade, reports Energetica India.
Under the policy, Gujarat aims to build green hydrogen production capacity of 3 million metric tons per year by 2035. This will be supported by 30 gigawatts of electrolyser capacity and 75 gigawatts of renewable energy capacity. To meet these targets, the state is seeking investments of nearly ₹5 trillion, or about $55.6 billion, across the green hydrogen and renewable energy sectors.
The government estimates that the policy could create around 6 lakh direct and indirect jobs, reduce natural gas use by at least 2 million metric tons per year, and cut carbon dioxide emissions by about 5 million metric tons annually.
The policy will apply to green hydrogen production units, projects making related products such as green ammonia and green methanol, storage and transport infrastructure, and end-use facilities located within Gujarat. Projects in special economic zones, domestic tariff areas and export-oriented units are all included.
Eligible developers include private companies, public sector units, joint ventures, special purpose vehicles, government departments and local bodies. Only new projects using new machinery and approved during the policy period will qualify. The policy will remain in force until December 31, 2035, unless replaced earlier.
Renewable power for green hydrogen projects can be sourced through captive plants, third-party supply, distribution companies, power exchanges or a mix of these options. The use of energy storage systems charged with renewable power is also allowed.
Project allocation may be done through competitive bidding or based on directions issued by state-level committees. Projects proposed by state and central public sector units may be approved directly.
The policy makes it clear that a project can claim benefits under only one incentive category, preventing overlap with other state incentives.
For projects using electrolysis, incentives are available for electrolyser capacities between 1 MW and 10 MW, with an overall limit of 500 MW. Developers can receive a capital subsidy of 20 percent of eligible project cost, capped at ₹10 million per MW. Additional support is available for battery storage systems and oxygen collection facilities, subject to technical limits.
To lower operating costs, the policy offers a 50 percent refund of transmission and wheeling charges for renewable power used in hydrogen production for five years from commissioning. Full reimbursement of land registration and stamp duty charges is also allowed within set limits.
The policy also supports biomass-based green hydrogen projects of up to 5 kilotons per year, with a maximum of five such projects to be supported. These projects are eligible for a 20 percent capital subsidy, capped at ₹80 million per kiloton of annual capacity, along with higher land-related reimbursements.
A major feature of the policy is the promotion of integrated green hydrogen hubs. These hubs will bring together hydrogen production, storage, transport and usage in one area with shared facilities. Each hub must produce at least 3 kilotons of hydrogen per year, host a minimum of 10 industrial units, and include at least one hydrogen production plant. Coastal and port-linked areas have been given priority to support exports. Capital support of up to ₹350 million per hub will be provided for a limited number of projects.
To encourage usage, the policy introduces demand-side incentives. A 30 percent capital subsidy, capped at ₹40 million per unit, will be provided for setting up the first 20 green hydrogen refuelling stations, with each developer allowed up to three stations. Similar support is offered for the first 500 green hydrogen-powered passenger buses and the first 100 hydrogen-based heavy-duty vehicles procured by state bodies and public sector units.
Small and medium enterprises registered in Gujarat will be eligible for a subsidy of ₹50 per kilogram of green hydrogen consumed for five years, subject to overall and per-unit limits. Similar benefits are available for city gas companies blending green hydrogen with CNG or PNG.
The policy also outlines support measures such as priority land allocation, coordination for water supply and desalination facilities, and development of green energy corridors. It confirms that no electricity duty is currently charged on renewable energy use in the state.
Manufacturing of green hydrogen equipment, including electrolysers, has been classified as an eligible industry under existing state policies. The government has also set aside ₹1 billion for research, development, environmental studies and startup support in the green hydrogen sector.
Implementation will be overseen through a three-level structure, with an Apex Committee led by the Chief Minister, an Executive Committee handling approvals and incentives, and Gujarat Power Corporation acting as the nodal agency.
Projects already receiving benefits under other Gujarat policies will not be eligible under this scheme. The government has said it may review or amend the policy after two years, or earlier if needed, to address technical or implementation issues.
