Infographic: India's renewable hydrogen developers bank on cost advantage in lackluster global market

India's renewable hydrogen developers hope cost advantages and offtake interest will help kickstart "green ammonia" export opportunities in 2027 despite the sector's uncertain outlook.

India aims to export more than half of its targeted production of 5 million mt of renewable hydrogen by 2030 from emerging hubs in the coastal states of Odisha, Andhra Pradesh, Tamil Nadu, Kerala and Gujarat, where a handful of the large developers are in preparatory stage involving front-end engineering designs and final investment decisions.

"India is one of the few countries to be able to produce very competitive green hydrogen, so it is very important for regions like Europe where they have particular mandates, which necessitates green hydrogen consumption," said Anri Nakamura, associate director at S&P Global Commodity Insights.

"For the Far East markets, the story is a little bit different because the carbon intensity limit for both South Korea and Japan in terms of clean hydrogen is lenient and the threshold can be met by blue hydrogen/ammonia from other parts of the world, which may be more competitive than Indian green hydrogen/ammonia."

Commodity Insight's Hydrogen Production Assets database shows India has almost 143 renewable or low-carbon hydrogen projects with a combined capacity of 10.55 million mt. The government's Rupees 197.44 billion ($2.37 billion) National Green Hydrogen Mission is driving the production of renewable hydrogen/ammonia, electrolyzers and hubs, among other things.

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Developers gear up

Project developers aiming for production and exports in late 2026 or 2027 include AM Green and ACME. Both have a spate of non-binding offtake agreements and have taken early construction initiatives.

"Our project has achieved FID and contacted technology partners," Mahesh Kolli, group president of AM Green told Platts, part of Commodity Insights. "Globally, there is discussion on what infrastructure to put in place, how to transport hydrogen and how to establish cracking facilities. So, if you see through the Asian lens, there is definitely no significant slowdown in the demand for green hydrogen."

AM Green's 1 million mt/year renewable ammonia project in Kakinada, Andhra Pradesh, slated to start production in the second half of 2026, has executed offtake term sheets with Uniper, Yara, RWE, BASF and others for intended end-use in a range of renewable hydrogen applications.

Market indications on Platts Market Heards show there is a wide gap between the cost of production of renewable hydrogen/ammonia in India and the willingness to pay from refineries and fertilizer manufacturers, which remains one of the key stumbling blocks for deals.

While renewable hydrogen costs were reported widely above $5/kg, the willingness to pay remained below $4/kg, according to the Heards. In case of renewable ammonia, Indian fertilizer companies imported conventional ammonia at an average price of $398/mt in 2024, but the replacement feedstock renewable ammonia was offered in the country mostly around $800/mt on an FOB basis.

Platts assessed Queensland hydrogen produced via alkaline electrolysis (including capital expenditures) at $4.32/kg on March 12, down 16.44% from a month ago. Platts assessed Japan hydrogen produced via alkaline electrolysis (including capex) at $5.44/kg March 12, down 19% from a month ago.

Crucial juncture

Observers are waiting for Indian projects to move to construction amid the US' abrupt policy shift under President Donald Trump, Europe's industrial costs crisis and the under-subscription of a hydrogen-to-power tender in South Korea late last year.

While some projects were progressing, other developers were "working on optimizing what they've put together -- they're looking at increasing efficiency and reducing costs," Nishaanth Balashanmugam, director of Green Hydrogen India told Platts. "The next six or seven months will determine if those projects come online."

Balashanmugam, whose association represents key renewable hydrogen players, said the challenge lay in securing firm offtake deals and regulatory clarity, notably acceptance of RED III rules by all EU states and the International Maritime Organization's proposal to have 5% blending of renewable fuels.

One positive driver is mushrooming domestic demand from industries bound by decarbonization targets, and the need to make continued exports to the EU with the Carbon Border Adjustment Mechanism looming.

"There are several projects that are taking off every three months in India," Balashanmugam said. "Today, we have pilots and demonstrations and quite a few blending projects and stainless steel making, optic fiber cable manufacturing all using renewable hydrogen scattered across the country."

Ahead, industry would look to Indian tenders for price discovery that may provide vital clues to potential offtakers.

"Price discovery will be seen from the ongoing refinery tenders in the coming few months for setting up around 47,000 mt/year renewable hydrogen capacity," said Harish Jayaram, vice president - hydrogen business development at Hygenco, which has multiple projects in India and agreements with Ameropa and Mitsubishi.

"Offtakers, manufacturers and Investors globally will be watching the action unfold very closely, especially at Solar Energy Corp. of India for its renewable ammonia tender for fertilizer firms that saw amendments this week."

SECI's role in joint tenders with H2Global, Indian developers' participation in South Korea's upcoming hydrogen-to-power tender and Japan's Contracts for Difference scheme would set the tone for renewable hydrogen consumption this year and India's position in it, he said.