India's Bid to Fuel the World's Green Hydrogen Future

The demand for green hydrogen derivatives is already building, and it needs reliable, affordable supply.

September 04, 2026. By News Bureau

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Yash Kashyap

Industrial Transition Accelerator

Green Hydrogen Future

Green hydrogen derivatives

IEA/IPCC AR6

International Maritime Organisation

Global Project Tracker

Green hydrogen is not really a climate project; it is an industrial one. Made by splitting water with renewable electricity, it can replace the fossil fuels and feedstocks behind much of heavy industry and transport, including fertilisers, refining, steel, power, shipping and aviation. The case rests on four gains: energy security, as home-made hydrogen and ammonia displace imports; economic resilience, through new factories, infrastructure and jobs; export earnings from clean-fuels trade; and lower emissions from heavy industry, which produces close to a third of global greenhouse gases (IEA/IPCC AR6) and is still climbing. For India, all four converge.

The demand for green hydrogen derivatives is already building, and it needs reliable, affordable supply. Industry comes first: fertiliser plants and refineries already run on hydrogen and ammonia, almost all of it fossil-based, and cleaning up that demand is the readiest market of all — one India knows well, importing some 2.4 million tonnes of ammonia a year, roughly an eighth of what it uses. Power is another, with Japan and Korea blending ammonia into coal plants to cut emissions and extend asset lifetime. And shipping and aviation, two of the hardest sectors to clean up, are settling on green ammonia, e-methanol and biofuels. A recent ASTM approval of methanol-to-jet opens yet another door for Indian e-methanol.

The policy signals behind this demand are also strengthening. In shipping, the International Maritime Organisation is negotiating a Net-Zero Framework to cap the emissions intensity of marine fuels and price them, with member states aiming for agreement through 2026; the EU's FuelEU Maritime rules already impose a binding regional mandate. In aviation, several countries — across the EU, plus Japan, Singapore, Indonesia and Malaysia — require a minimum share of sustainable fuel. India is set to join them, with a proposed mandate of 1 percent on international flights from 2027, rising to 2 percent in 2028 and 5 percent by 2030.

So who supplies all this? The market is already asking. India is well placed to be a global leader, but the opportunity must be actively built, not assumed.

What India Brings to the Table

It helps to be honest about the starting point. India's manufacturing base in electrolysers is still thin, and not to be overstated. What India does have is an improving enabling environment: supportive policy in the National Green Hydrogen Mission, SIGHT incentives and a widening set of state schemes; a private sector willing to commit capital and take the early-mover risk; and strong fundamentals — cheap, falling solar and wind power, the biggest single cost in green hydrogen, plus three ports (Kandla, Tuticorin, Paradip) designated as hydrogen hubs and investing to get ready to anchor supply of these fuels.

That promise already shows in the pipeline. India has 42 commercial-scale green ammonia projects — some 27–30 million tonnes a year of announced capacity, clustered in Odisha, Andhra Pradesh, Gujarat and Karnataka — plus nine green methanol projects totalling 2.5–3 million tonnes (ITA Analysis).

The Gap Between Potential and Bankable Projects

Worldwide, only a small share of announced clean-industrial projects ever reach a final investment decision. Mission Possible Partnership’s Global Project Tracker records 161 projects that have passed FID or are operational, against more than 800+ projects still in development. As per the Trackers last update (April 2026), just 19 projects have reached FID in the last 6 months. And while the pace is increasing, it remains slow compared to the size of the pipeline. The gap is particularly pronounced across the New Industrial Sunbelt: renewables-rich emerging economies account for 39 percent of the global project pipeline, but only 12 percent of projects that have passed FID. India’s announced pipeline grew 30 percent in six months and is moving faster than many peers. Closing the gap now requires dependable buyers at scale; firmer and cheaper renewable power in some states; certification aligned with overseas markets; cheaper finance; and de-risked first-of-a-kind transactions. Transmission, land and water availability matter too, but planned early they can be designed around rather than left to stymie projects later.

Of these, dependable demand and predictable revenue matter most, and government is already stepping in. SECI's first green ammonia tender awarded 724,000 tonnes a year across seven developers at roughly INR 50–65 a kilogram, and a 500,000-tonne green methanol tender with a three-year producer incentive is in the works. SECI has also agreed to run a joint auction with Germany under the H2Global mechanism, with the Netherlands and Japan expected to follow — plugging Indian producers into international premium demand pools. Buyers abroad are committing too: AM Green has a binding 500,000-tonne deal with Uniper and a term sheet with Yara, while ACME and L&T have struck ammonia deals with Japanese buyers backed by contract-for-difference support. In methanol, ACME's 100,000-tonne deal with Mitsubishi Gas Chemical mark chemicals and shipping as the most tappable early export market.

Behind all of it sits the “green premium” — the extra cost of clean fuels over fossil equivalents — which no buyer will carry alone. Closing that gap needs tailored de-risking instruments, market-making mechanisms and long-term binding offtake deals. Designing them cannot be left to producers alone: infrastructure companies, buyers and downstream users such as FMCG firms each carry a different slice of the risk, and it takes the whole value chain at the table to understand those risks and shape solutions that de-risk the first wave of projects.

Standards and Trade as the Real Unlock

Another key enabler is interoperable standards between India and potential green-fuels trading partners like the EU, Japan and South Korea. Unless product standards and certification are mutually recognised between trading partners, Indian hydrogen and its derivatives cannot flow smoothly into the export markets that make up most near-term demand. Trade routes and country partnerships are the next frontier, and India should help design them, not wait for rules written elsewhere.

Much of the rulebook is already written — the EU's RFNBO rules on where renewable power comes from, how CO2 is sourced and how lifecycle emissions are counted. So while India should stay in the broad standards conversation, the urgent work is technical: engaging the EU and others on the exact mismatches holding up investment decisions today, such as how India sources its grid electricity and how its Carbon Credit Trading Scheme treats industrial CO2 against EU criteria. Sorting out those details will help accelerate India's first export projects.

Where the Opportunity Sits

The openings run the length of the chain: upstream, in electrolysers and equipment; midstream, in port-based ammonia and methanol hubs with shared storage and bunkering; downstream, in the offtake, trading and structuring that Indian companies and financiers can take on; and around it all, a services layer (project development, risk advice, structuring) where Indian firms have a genuine chance to lead the region.

What happens next rests on three things: demand signals and offtake deals that de-risk early volumes; blended, low-cost finance built for first-of-a-kind projects; and steady, detailed engagement in the standards and trade talks. None of it is guaranteed. India will have to move fast and deliberately to turn today's policy lead into tomorrow's role as a go-to supplier — and buyers, regulators and financiers abroad will have to take its pipeline seriously enough to build these supply chains alongside it.

- Yash Kashyap, India Lead at Industrial Transition Accelerator (ITA)