India's Green Hydrogen Auctions Deliver Competitive Pricing as Sector Builds Momentum

India's green hydrogen sector is gaining momentum, driven by government incentives, competitive project auctions and rising investor interest. The National Green Hydrogen Mission, launched in 2023, set a target of 5 million tonnes per annum (MTPA) by 2030 to help decarbonize oil refining, fertilizers and steel, and the sector has moved from a standing start to a functioning auction and incentive framework within a few years.

Where the Program Currently Stands

India currently has less than 10,000 tonnes per annum of operational green hydrogen capacity, with most projects still at pilot or demonstration stage, and 158 projects at various stages of development as of August 2025. Industry analysis puts auctioned production capacity so far under the Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme at 1.2 MTPA, reflecting the pace achieved to date, with an estimated 2.7 MTPA of capacity supportable under the scheme's Rs 17,490-crore budget, including 1.5 MTPA still to be auctioned over the next four years. Reaching the original 5 MTPA target by 2030 would require the pace of auctions and construction to accelerate meaningfully from here.

What's Driving the Pace of Project Delivery

Charith Konda of the Institute for Energy Economics and Financial Analysis (IEEFA) points to a set of structural factors shaping how quickly projects move from announcement to construction: demand certainty, production costs, common technical definitions across the sector, and infrastructure for storage, transport and distribution. These are the kinds of foundational, sector-wide pieces that typically take time to establish in any new energy market, and they sit upstream of individual project financing decisions rather than reflecting issues with specific developers.

Where the Auctions Have Genuinely Delivered

Price discovery through SIGHT auctions has been a clear bright spot. Under the first tranche of SIGHT Component 2, the government awarded firm demand contracts for 724 kilotonnes per annum of green ammonia capacity across 13 projects, with the lowest discovered price at Rs 52 per kg after incentives, among the most competitive green ammonia prices achieved globally.

Separately, SIGHT Mode 2B auctions for green hydrogen supply have pushed prices down 17% over the past year to Rs 279 per kg. Falling prices through competitive bidding suggest the auction mechanism itself is working well; the next phase of progress depends on translating that price discovery into built capacity.

What Would Help Accelerate the Next Phase

Industry commentary points to three areas with room to build further: assured demand through aggregated procurement, common infrastructure such as green hydrogen hubs at ports and industrial clusters, and market-based mechanisms such as carbon pricing to narrow the cost gap with conventional grey hydrogen. Oil refining currently offers the strongest commercial case for green hydrogen adoption, followed by ammonia production for fertilizers, with steel and other hard-to-abate industries expected to become increasingly viable as carbon pricing mechanisms mature.

Source: BioEnergy Times, 29 July 2026.