IOCL Concludes India’s First Green H2 End-User Offtake Auction at US$4.6 per kg
Indian Oil Corporation Limited (IOCL)’s latest auction in May 2025 has kickstarted end-user offtake requirements-based auctions in the Indian green hydrogen landscape. The one-of-a-kind tender mandates the selected developer to manufacture and supply 10,000 metric tonne per annum (MTPA) of green hydrogen to IOCL Panipat refinery for 25 years at a fixed price discovered under the bidding process.
The Solar Energy Corporation of India (SECI) had plans to issue similar tenders as a part of its “Strategic Interventions for Green Hydrogen Transition (SIGHT)” scheme under the National Green Hydrogen Mission (NGHM). Under this framework, SECI would serve as a demand aggregator and executor of the tenders. However, delays in releasing these tenders have prompted the industry to take the initiative. Several major oil and gas companies, such as IOCL, BPCL, and Mangalore Refinery and Petrochemicals have issued their own green hydrogen procurement tenders.
Figure 1: Auction result of IOCL’s 10,000 MTPA green H2 supply tender
Source: JMK Research
Note: The figure shows the global average cost of blue and grey hydrogen per kg
The price of green hydrogen discovered in the IOCL tender is ₹397 (approximately US$4.6) per kg, which is around 27% lower than the global average cost of producing green hydrogen. Following successful contract execution after the award, the selected bidder, L&T Green, will produce green hydrogen and supply it to IOCL Panipat under a build-own-operate (BOO) arrangement. Additionally, L&T could also leverage the 90,000 MTPA green hydrogen capacity it secured under SIGHT Mode-I Tranche-II in March 2025.
As the IOCL Panipat refinery expands from a capacity of 15 to 25 MMTPA, its additional hydrogen requirement of 84,000 MTPA will be partially fulfilled by this 10,000 MTPA green hydrogen plant. Furthermore, IOCL aims to transition 50% of its hydrogen demand to green sources by 2030, targeting a cumulative capacity of 350,000 MTPA. This project will serve as a technology demonstration pilot, setting the stage for future green hydrogen procurement strategies across the petroleum refining industry.
In future green H2 end-user offtake tenders, with an expectation of greater scale and additional incentives (as stipulated under the SIGHT scheme guidelines), the price of green hydrogen may reduce to approximately ₹350-360 per kg. However, there is still a long way to go until green hydrogen achieves cost parity with conventional grey hydrogen, which has an average cost of approximately US$ 2.1 per kg.
Given the extensive impact of green hydrogen on various energy-intensive sectors, industry stakeholders consider it essential for enabling India’s path to net zero emissions. Like renewable energy (RE), large-scale tendering will play a key role in reducing green H2 procurement costs. Driving down the procurement cost is critical to spur organic wide-scale industry acceptance, ensuring India attains its 5 MMTPA target of green H2 production by 2030.