Punjab Unveils Draft Green Hydrogen Policy, Targets 100 KTPA Production by 2030

The Punjab government has released its draft Green Hydrogen Policy 2023, positioning the state to become a leading hub for green hydrogen and ammonia production in India.

The policy aligns with the National Hydrogen Mission. It aims to harness Punjab’s rich agricultural biomass to support India’s net-zero emissions target.

The policy has set an ambitious target of producing 100 kilotonnes per annum (KTPA) of green hydrogen by 2030, with a strong emphasis on decarbonising sectors like industry, transport, and energy. Existing industrial units such as refineries and fertiliser plants will be required to blend at least 8 per percent green hydrogen, while all new industrial units must use 100 per percent green hydrogen.

To support this transition, the state plans to develop hydrogen clusters and parks, facilitating seamless integration of production and consumption. Punjab is also aiming to establish itself as a global exporter of green hydrogen and ammonia, capitalising on its resource advantages and strategic location.

The policy offers substantial financial incentives to attract investors. Capital subsidies include up to INR 15 crore per project for biomass-to-hydrogen plants (limited to 10 projects). For mobility, a 20 per percent subsidy, capped at INR 50 lakh per vehicle, is proposed for hydrogen fuel cell buses and vehicles, along with an INR 3 crore cap per refuelling station.

To kickstart demand, the first ten industrial consumers will be eligible for an INR 50/kg subsidy on hydrogen for a five-year period. The government is also waiving 100 per percent of stamp duty, electricity duty, CLU, and EDC, significantly reducing the cost burden on project developers.

Developers will benefit from a 50 per percent reduction in intra-state transmission and wheeling charges, exemption from cross-subsidy surcharges, and renewable energy banking facilities. In a significant move, panchayat land will be made available for project development and biomass storage, offering logistical advantages and rural development opportunities.

Infrastructure development is a key pillar of the policy, which proposes the creation of hydrogen-ready pipelines and expanded electricity grid capacity. A dedicated Centre of Excellence (CoE) will support research, skill development, and pilot programmes in heavy transport and energy storage.

Startups and MSMEs will be supported through a proposed Green Hydrogen Ecosystem Fund, financed by a green cess. In line with sustainability goals, the policy prioritises the use of treated sewage water for hydrogen production to avoid stress on freshwater resources.

The state will offer single-window clearance through the Punjab Bureau of Investment Promotion (PBIP). Regulatory approvals will be fast-tracked through digital platforms, with integration into the National Single Window System to enhance investor ease.

The Punjab Energy Development Agency (PEDA) will act as the nodal agency for approvals, while a Project Allotment Committee comprising technical experts will evaluate project proposals. The Department of New and Renewable Energy Sources will oversee any amendments and policy updates.

A standout feature of the draft policy is its emphasis on agricultural biomass, particularly paddy straw, for hydrogen production. This not only adds economic value to agro-residues but also contributes to tackling stubble burning. Combined with blending mandates and treated water usage, Punjab’s policy offers a balanced approach to innovation, sustainability, and economic development.