India’s renewable hydrogen developers are optimistic that cost advantages and increasing demand for offtake will help unlock “green ammonia” export opportunities by 2027, despite uncertainties in the sector, according to S&P Global Commodity Insights.
India has set a target to export over half of its goal of producing 5 million metric tons of renewable hydrogen by 2030, with key production hubs emerging in the coastal states of Odisha, Andhra Pradesh, Tamil Nadu, Kerala, and Gujarat. Several major developers are currently in the preparatory stages, working on front-end engineering designs and finalizing investment decisions.
“India stands out as one of the few countries capable of producing highly competitive green hydrogen, which is crucial for regions like Europe, where strict mandates drive the demand for green hydrogen,” said Anri Nakamura, associate director at S&P Global Commodity Insights.
However, Nakamura noted that the situation is different for Far East markets such as South Korea and Japan. These countries have more lenient carbon intensity limits for clean hydrogen, which means blue hydrogen and ammonia from other parts of the world could meet these thresholds and potentially offer a more competitive option than India’s green hydrogen and ammonia.
According to S&P Global Commodity Insight’s Hydrogen Production Assets database, India has nearly 143 renewable or low-carbon hydrogen projects with a combined capacity of 10.55 million metric tons. The Indian government’s National Green Hydrogen Mission, with an allocation of ₹197.44 billion (USD 2.37 billion), is a key driver of renewable hydrogen and ammonia production, alongside the development of electrolyzers and production hubs.
However, market data from Platts Market Heards reveals a significant gap between the production costs of renewable hydrogen and ammonia in India and the willingness of refineries and fertilizer manufacturers to pay for them. This disparity remains a major hurdle for closing deals in the sector.
While the cost of producing renewable hydrogen in India is reported to be above USD 5 per kilogram, the willingness to pay remains below USD 4 per kilogram. For renewable ammonia, Indian fertilizer companies imported conventional ammonia at an average price of USD 398 per metric ton in 2024, whereas renewable ammonia was offered domestically at around USD 800 per metric ton on an FOB basis.
On March 12, Platts assessed hydrogen produced via alkaline electrolysis in Queensland at USD 4.32 per kilogram, a 16.44% decrease from the previous month. Similarly, hydrogen produced in Japan via the same process was assessed at USD 5.44 per kilogram, marking a 19% decrease from the previous month.
For detailed information and further insights, please refer to BioEnergyTimes.com, which provides the latest news about the Green Hydrogen Industry
