India makes U-turn on plans for green hydrogen mandates on heavy industry

India is no longer planning to impose green hydrogen mandates on heavy industry, in an apparent U-turn, according to RK Singh, the minister for power, new and renewable energy.

While the bill gave no details on who exactly would be a “designated consumer”, Singh told parliament that the government plannedto mandate the use of green hydrogen in sectors such as steel, oil refining, fertiliser production and cement production.

However, in a press conference today, Singh declared that India would not impose any green hydrogen mandates on industry.

“The obligation was necessary when grey hydrogen was cheaper than green hydrogen,” he said. “Today, because of the huge rise in petroleum prices and natural gas prices, grey hydrogen is more expensive than green hydrogen, so now it makes common sense to replace grey hydrogen with green hydrogen.”

“The only challenge I face, which our industry faces, is huge subsidies announced by some developed countries on manufacturing green hydrogen,” he explained.

“We believe that to be a trade distorting step, which I think is actionable under the WTO [World Trade Organization] rules.”

The EU, Norway, Australia and South Korea have all submitted formal objections to the forthcoming US hydrogen tax credits that were included in last August’s Inflation Reduction Act — on the basis that subsidies for local producers are in breach of international trade rules as they discriminate against foreign-made products.

Singh’s intervention comes just a day after the Indian cabinet voted to spend an initial $2.11bn on its own national subsidies for green hydrogen production and the domestic manufacturing of electrolysers — the latter of which also risks being discriminatory against non-Indian equipment makers.