The Centre had last year announced the National Hydrogen Mission (NHM), which would lay the roadmap for India to become a global leader in the production of hydrogen.

Under the ambit of the mission, the government would support research, demand generation, infrastructure development and other parts of the process to ensure that India would be able to produce and use hydrogen as a fuel, especially in the transport sector.

While the mission was introduced last year, the Centre will soon release the draft roadmap with the green hydrogen policy as part of the first phase of the NHM.

What will be the green hydrogen policy?

The policy will set the roadmap to transition from the high-carbon-footprint grey hydrogen and grey ammonia to the zero-carbon process of extracting green hydrogen and green ammonia.

"We are going to put mandates for replacement of grey hydrogen and grey ammonia with green hydrogen and green ammonia in a certain trajectory. That mandate will come out after clearance of the Cabinet," RK Singh, Minister of Power & New Energy, said on Wednesday.

"What is going to be issued on Thursday or the day after is open access, banking, and free transmission,” he said.

The policy is not expected to include viability gap funding and mandates for producers under the hydrogen policy for green hydrogen and ammonia usage. These are likely to be added in the second phase, sources told CNBC-TV18.

What else will the National Hydrogen Mission cover?

While the scope of the NHM is wide, Singh had in January said that under the mission the government would provide support in the form of free power transmission for 25 years, dollar-denominated bids, offer of land in renewable energy parks, and land allocation near ports for creating bunkers for green hydrogen or ammonia.

The ultimate aim of the government is to bring down the cost of green hydrogen to $1 per kg and have five million metric tonnes per annum (MMTPA) green hydrogen capacity by 2030 in India.

To this end, other incentives to increase production are also being pushed. Sources told CNBC-TV18 that the government may introduce Rs 15,000-crore production-linked incentive (PLI) for the manufacturing of electrolysers, which produce green hydrogen by electrolysing water.

Sources also added that the government was looking at setting the Goods and Services Tax (GST) rate at nil for domestically-manufactured electrolysers for a five-year period after the PLI is launched.

Hydrogen is being seen as the fuel of the future. Hydrogen has the potential to create limitless, emission-free, efficient energy. The BJP-led government is betting hard on hydrogen being the transitory fuel required to reduce carbon emissions in multiple sectors that will take significant time to electrify.

Read Also | Green hydrogen push: Govt plans Rs 15,000 crore PLI scheme for electrolyser manufacturing

(Edited by : Thomas Abraham)