India has taken a significant step to bolster its green hydrogen production by exempting solar and wind energy plants located in special economic zones (SEZs) from purchasing equipment from the approved list of models and manufacturers (ALMM). This exemption applies specifically to SEZ-based renewable energy plants that are dedicated to the production of green hydrogen and its derivatives, provided they are commissioned by December 2030.
The Ministry of New and Renewable Energy (MNRE) issued this notification on Tuesday, underscoring the government’s commitment to advancing the green hydrogen sector. This policy change is expected to lower equipment costs for green hydrogen producers by allowing them to source cheaper solar modules and wind turbines, ultimately providing a financial advantage. “Green hydrogen producers will get cheaper equipment with duty benefits. The industry had been demanding this for some time,” noted a government official.
This move has been made with the prior approval of the Election Commission of India, according to Bhupinder Singh Bhalla, Secretary of the MNRE. It comes on the heels of renewed restrictions on the import of solar modules from this financial year, following a brief relaxation due to insufficient domestic production capacity. Previously, solar projects commissioned by March 31, 2024, were exempt from the ALMM requirement for the 2023-24 fiscal year. This mandate, introduced in 2021, was aimed at boosting domestic manufacturing by requiring solar project developers to procure modules exclusively from the approved list. A similar list exists for wind turbine models eligible for installation in the country.
The easing of these rules is a critical component of the National Green Hydrogen Mission, which aims to establish a green hydrogen production capacity of at least 5 million tonnes per year, supported by an additional 125 GW of renewable energy capacity. This ambitious initiative is poised to position India as a global leader in green hydrogen production, leveraging its vast renewable energy resources. By allowing SEZ-based renewable energy plants to bypass the ALMM, the government is addressing a long-standing industry demand. This policy shift is expected to accelerate the establishment and scaling of green hydrogen production facilities, fostering innovation and investment in this nascent sector. The broader impact of this policy could also catalyse the growth of related industries and support India’s transition to a low-carbon economy.
As the green hydrogen sector evolves, stakeholders will closely monitor the implementation of these new regulations and their impact on market dynamics. The MNRE’s proactive measures reflect India’s strategic focus on sustainable energy solutions and its commitment to achieving its renewable energy targets.
