The Uttar Pradesh cabinet, under the leadership of Chief Minister Yogi Adityanath, has given the green light to the much-anticipated Green Hydrogen Policy, 2024. In a meeting held on Tuesday, the cabinet approved the policy which aims to achieve a significant milestone – the production of one million metric tonnes per annum of green hydrogen by the year 2028.
This policy, which has a validity of 5 years, is poised to unlock a massive investment potential of over ₹1.95 lakh crore. Investors had already proposed 19 projects related to the production of green hydrogen and ammonia during the Global Investors’ Summit held in February last year.
Green hydrogen, named for its environmentally friendly production process powered by renewable energy, finds applications in vital sectors such as petroleum refining, ammonia manufacturing, heavy-duty mobility, and more.
The ambitious policy is expected to generate approximately 1.20 lakh jobs by 2028, providing a significant boost to the state’s economy. The Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) will serve as the nodal agency for the implementation of this transformative policy.
Under the provisions of the policy, green hydrogen projects will receive capital subsidies ranging from 10% to 30%, depending on the geographical area of investment and project scale. Additionally, the first 5 investments (excluding Meerut division) in green hydrogen projects during the policy period will benefit from a substantial capital subsidy of 40% of the total investment amount, with a ceiling of ₹225 crore per project per year.
Furthermore, the government is offering attractive incentives for land use, with government/ revenue land being provided on lease at a nominal rate of Re 1 per acre per year for government PSUs. For private sector investors, the lease rate is set at ₹15,000 per acre per year, with a 30-year lease period for village/ government land.
Stamp duty charges on land purchased or leased for green hydrogen projects will be fully exempted, incentivizing investment in this eco-friendly sector. Moreover, for projects utilizing solar energy units to power green hydrogen production, land allotment will be a maximum of 5 acres per MW with a cap of 20 MW per kilo tonne per year.
In a bid to support the energy needs of these projects, the policy offers a 100% exemption on electricity duty for the first 10 years of the project or its life, whichever is earlier. Additionally, there will be a 100% exemption on intra-state wheeling/transmission/cross subsidy surcharges during the same period.
Industrial tariff rates will apply to green hydrogen/ammonia projects receiving power from local distribution companies (discoms), ensuring fair pricing.
To foster innovation and research in the field, the policy includes the establishment of two centres of excellence. Government educational institutions or institutions of national importance will receive 100% financial assistance up to ₹50 crore each for setting up these centres. These centres will focus on research and development in areas such as electrolyzer manufacturing, type 4 storage tanks, green hydrogen labs, transportation, fuel cell electrolyzer, and solar thermal technology for green hydrogen production.
