The state currently needs about 0.9 million tonnes of hydrogen per year, mainly for the manufacturing of nitrogenous fertilizers. The policy concentrates on the chemical, fertilizer, and refinery industries in an effort to move the state toward a green hydrogen economy. For the following five years, the policy will be in force.

Additionally, by 2028, the state hopes to blend 20% green hydrogen into all hydrogen used by its existing fertilizer and refinery units. The draft policy suggests a capital expenditure subsidy in 2024 equal to 60% of the electrolyzer’s cost. The minimum capacity needed to be eligible for the subsidy is 50 MW or more. The financial incentive from the state government will be cut in half to 20% by 2027.

Additionally, a state-level committee will be established to take care of all the obligations, including the monitoring and evaluation of the policy. Additionally, the plan calls for providing R&D facilities and companies with the one-time financial support of 30% for the procurement of technology up to a maximum of Rs 50 million.

A skill-development program will be supported by the center in order to strengthen state capabilities and get the workforce ready for the transition to green hydrogen and ammonia.

The move is a precursor to rolling out the final policy that would aim to make Uttar Pradesh a 100% green hydrogen/ammonia-consuming state by 2035. Turning the state into a leading green hydrogen/ammonia producer is another objective.

The policy would also promote green hydrogen/ammonia production, market creation, and demand aggregation.

“The state envisions to promote green hydrogen/ammonia as the foundational pillar for the green energy transition in UP and make the state ready for a net-zero economy in the future,” says the draft policy that was put in the public domain by the Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA), the nodal agency for the purpose.

The policy will focus primarily on two major hydrogen/ammonia demand centers in Uttar Pradesh – nitrogenous (N) fertilizers and the refinery sector. It will also cover other emerging industries and applications of green hydrogen in the future.

Incentives provided in the “Industrial Investment and Employment Promotion Policy 2017”, such as exemption of stamp duty, tax reimbursement, capital interest subsidy, infrastructure interest subsidy, and electricity duty will be applicable to new green hydrogen/ammonia investments and expansion of existing fertilizer units in the state.