Green hydrogen projects move slowly: IEEFA analysis

Despite strong investor interest in India’s green hydrogen story, there are concerns about how much of this capacity will materialize given the challenges associated with its deployment and deployment, the analysis notes.

According to an analysis by the Institute for Energy Economics and Financial Analysis (IEEFA), in August 2025, 158 green hydrogen projects were in various stages of development. About 94% of green hydrogen capacity has been announced, with other details yet to be finalised. About 0.1% is under construction and 2.8% was operational in August 2025.

The primary obstacles are a lack of committed buyers, high production costs, different global definitions of green hydrogen, and insufficient infrastructure – especially for storage, transportation and common facilities.

According to industry estimates, India’s total hydrogen demand may rise to 15-20 million tonnes per annum (MMTPA) by 2030. Demand for green hydrogen may increase to 4.08-6.57 MMTPA if support policies are adopted to drive new sectoral applications in steel, transportation, chemicals and exports.

The approval of the National Green Hydrogen Mission (NHGM) in January 2023 has catalyzed India’s green hydrogen industry. Backed by budgeted funding of 197 billion rubles, the mission aims to produce five MMTPA of green hydrogen by 2030.

Green hydrogen is a promising fuel for reducing carbon dioxide emissions in several sectors, but the sector is facing headwinds in several countries due to high production costs and uncertainty in demand. The development of the definition of green or low-emission hydrogen in different countries also affects the development of green hydrogen as a commercial commodity worldwide.

Green hydrogen’s ability to serve as a versatile fuel and decarbonizer in hard-to-clean sectors also depends on the development of infrastructure, including electricity transmission and distribution networks, electrolysis equipment, storage tanks and pipelines.

« In India, it is easier to transfer electricity than hydrogen because the country already has an extensive transmission and distribution network, » says Charith Konda, an energy expert at IEEFA and one of the authors.

Domestically, hydrogen purchase obligations can create sustained demand by requiring industry to source some of its energy from green hydrogen. The development of hydrogen hubs can further accelerate deployment by co-locating production, storage and end-use, cutting costs and enabling shared infrastructure.

« Although political efforts and high levels of carbon dioxide emissions will probably increase the demand for green hydrogen, in the long term, the continuous generation of demand requires global cooperation and concrete actions to introduce green hydrogen domestically, » Konda emphasizes.