We expect that a quota should be mandated for the use of green hydrogen, ammonia and methanol in sectors like fertilizers, chemicals, steel, refineries, etc. Besides, the government should also consider implementing a nationwide policy mandating the use of Green M15 fuel i.e. mixing 15% green methanol with petrol, in transportation and other applicable sectors, supported by incentives for producers and consumers to adopt this fuel. It will help in demand creation and reducing production cost.
Besides, the government should also consider extending Section 115BAB of Income Tax up to 2030 for setting up of new manufacturing units for solar modules, electrolyzer and green hydrogen production.
To boost the sectors and achieve desired targets, GST should be kept nil, initially, on Green Hydrogen and its derivatives, whereas 5% GST should be reinstated on Solar Power Generating System and its related parts.Like renewable energy generation projects, equitable interest rate should be levied for solar module manufacturing projects as currently these projects bear an additional interest of 50 bps.
We also expect that green hydrogen, and its derivatives should be included in the harmonised list of infrastructure sub-sectors as these sectors have the capability to transform the country into a Net Energy Exporter. Also, a mechanism should be developed to facilitate low-cost financing and provide benefits like accelerated depreciation for green hydrogen infrastructure investments.
Customs duty should be exempted for importing green hydrogen technologies, equipment for production of renewable power (such as solar modules), manufacturing of green hydrogen (and its derivatives), such as electrolyzers, fuel cells, other imported components, etc., until adequate manufacturing capacity is established in the country.
Last but not the least, the government should consider implementing a policy where each district with over 100,000 residents establishes a 50 MW solar plant. It ensures localized energy generation, reducing transmission losses and boosting energy security.
