The HPO Prescription: IH2A's Plan to Green India's Industry

The India Hydrogen Alliance (IH2A) has emphasized the urgent need for Hydrogen Purchase Obligations (HPOs), warning that over USD 80 billion in public investment commitments for hydrogen-related projects could be at risk without them.

To close the gap between current hydrogen production and India's national targets, IH2A has proposed a comprehensive HPO framework aimed at replacing grey hydrogen with green hydrogen, particularly in the refinery and ammonia sectors. These sectors, comprising 47 operational and proposed plants, could significantly boost demand for green hydrogen if backed by mandatory offtake requirements.

The proposal includes establishing a Contract-for-Difference (CfD) mechanism—modeled on Japan’s approach—to financially support the transition. This framework would help offset the cost differential between grey and green hydrogen, making adoption more feasible for industry players.

"Once HPOs are in place, India can adopt a CfD framework similar to Japan’s to help fund the transition to green hydrogen in the refinery and ammonia sectors by 2030, cutting emissions in two of the country’s most carbon-intensive industries," said Amrit Singh Deo, Secretariat at IH2A.

According to IH2A, a USD 2 billion budget allocation under this CfD model would allow existing refinery and fertilizer plants to meet a 10% HPO target, with new facilities potentially achieving 100% green hydrogen offtake by 2030—significantly accelerating India’s decarbonization pathway.

News by Rahul Yelligetti.