Uttar Pradesh Green Hydrogen Policy 2024

On 4th January 2023, The National Green Hydrogen Mission (NGHM) was launched with an initial outlay of Rs 19,744 crore from FY2023-24 to FY2029-30. The overarching objective of the Mission is to make India a global hub for production, usage and export of Green Hydrogen and its derivatives. The mission aims to develop a green hydrogen production capacity of at least 5 million metric tonnes per annum by 2030.This will be accompanied by the addition of approximately 125 GW of renewable energy capacity in the country.

Various states have aligned themselves with this mission by issuing its own green hydrogen policy. These states are Andhra Pradesh, Maharashtra, Punjab, Rajasthan, West Bengal and latest on the list is Uttar Pradesh.

Some states like Madhya Pradesh, Odisha have integrated RE policy that includes Green Hydrogen provision, but they might also issue the green hydrogen policy separately in near future as the demand escalated.

While Haryana has floated a draft green hydrogen policy in March 2024, states like Gujarat, Tamil Nadu, Kerala are already working on setting up of green hydrogen Hub and may issue the draft policy soon for public.

Following are the salient features highlighted by UP green hydrogen policy issued on 05th March 2024.

Parameters

Description

Target

Production of one million metric tonnes (1MMT) of green hydrogen per annum by 2028.

Incentives outlay

The government has introduced a range of incentives and subsidies worth Rs 5,045 crore for businesses setting up operations within the next five years. 

Job Creation

The policy is expected to create 1.20 lakhs jobs by 2028

Capital Subsidy

Green Hydrogen projects will be provided capital subsidy of 10% to 30% depending on the geographical area of investment.

The categorization of the subsidy would depend on the scale of the investment of the project.

During the policy period, the first 5 investments (excluding Meerut division) in green hydrogen projects will be provided capital subsidy to the tune of 40% of the total investment amount with a ceiling of Rs.225 crore per project per year.

Total duration is between 10-20 years.

Apart from capital subsidy, the subsidy could be attained through Net State Goods and Service Tax (SGST) reimbursement, or top-up to the Production linked incentives (PLI) schemes as part of the Ministry of New & Renewab Energy (MNRE), Strategic Interventions for Green hydrogen transition programme (SIGHT) programs

Land allotment

Government land will be provided on lease at Rs 1 per acre per year for government PSU’s.

Investors from the private sector will be provided land on lease rate at Rs.15,000 per acre per year for 30 years.

100% waiver on land stamp duty

Banking

Monthly banking with no carry-forward, which can be used only in the time block when they are generated

Open access charges

100% waiver on transmission & wheeling charges for 10 years

100% waiver on cross-subsidy and additional subsidy charges for 10 years

100% waiver on electricity duty for 10 years

Centres of Excellence (COEs)

Establishment of 2 Centres of excellence (COEs) for cost reduction and development of new technologies.INR 50 Crore will be assigned to do the same

Startups

Each startup in the field of green hydrogen will be provided maximum financial assistance of Rs25 Lakh per year for a period of 5 years for upto 10 startups.

Nodal agency

The Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) will be the nodal agency

Renewable Purchase Obligation

Renewable energy consumed for the production of green hydrogen would be considered as a part of renewable purchase obligation for the project developer.

Renewable energy produced more than the RPO obligation for green hydrogen would be utilized by the discoms for meeting their RPO obligations.

Environmental clearance

Green hydrogen projects would be provided a white category status for environmental clearance

By encouraging innovation and offering attractive benefits to startups, U.P. is positioning itself as a green hydrogen hub. Capital subsidy of up to 40% will be provided for first 5 projects (with an upper cap of Rs 225 Crore per project per year). This is truly a commendable step towards sustainability.