Hydrogen created by splitting water with an electrical process called electrolysis can be used as a fuel. If the devices that do this, electrolyzers, are powered by renewable energy, the product is called green hydrogen.
Thakur said India is also planning to build an electrolyser capacity of 60 GW to 100 GW to help produce green hydrogen.
According to industry sources, the incentive by the government is aimed at making green hydrogen affordable and reducing its production cost from Rs 300 to Rs 400 per kg at present.
According to industry sources, fertiliser, refining and iron and steel units currently consume 5 million tonnes of gray hydrogen per year through fossil fuels. Sources said that production of gray hydrogen costs around Rs 200 per kg, as the cost of gas has pushed up the prices by Rs 130 per kg.
To promote the use of green hydrogen, Thakur said obligations such as mandatory targets for green hydrogen consumption for fertilizer units, petroleum refineries and city gas distribution networks would be required.
The government expects a total investment of 8 trillion Indian rupees ($96.65 billion) in the green hydrogen sector by 2030, Thakur said, adding that incentives would be given for manufacturing electrolyzers and production of green hydrogen.