Government Launches Pilot Projects Using Green Hydrogen in Shipping

The projects have an outlay of ₹1.15 billion until FY 2025-26

February 2, 2024


The government has greenlit pilot projects aimed at decarbonizing the shipping sector using green hydrogen under the National Green Hydrogen Mission (NGHM), the Ministry of New and Renewable Energy (MNRE) has said.

The program aims to support the deployment of green hydrogen and its derivatives as fuel for ship propulsion and develop bunkering and refueling facilities at ports. It has an outlay of ₹1.15 billion (~$13.9 million) until the financial year 2025-26.

The pilot projects will be implemented through the Ministry of Ports, Shipping and Waterways (MoPSW) and nominated executing agencies.

The program has two components. Under component A,  existing ocean-going and inland waterways vessels will be retrofitted with green methanol, green ammonia, or hydrogen fuel cell-based propulsion systems at a cost of ₹800 million (~$9.7 million). The Shipping Corporation of India (SCI) will retrofit at least two ships by 2027.

Component B involves developing bunkering and refueling facilities for green hydrogen-based fuels at one port on an international shipping route by 2025 at a cost of ₹350 million (~$4.2 million). MoPSW will identify the port.

The program will only fund capital expenditure on the retrofits and bunkering and refueling facilities on ports. Expenses to produce green hydrogen or land will not be funded.

The central financial assistance will be disbursed in three stages: Issue of letter of award (20%), milestone-based disbursement (70%), and completion (10%).

The pilot projects aim to validate the technical and economic viability of using green hydrogen in shipping. They will help assess operational issues, safety, infrastructure needs, and regulations required for scaling up deployment.

The executing agencies selected for the projects will then share the outcome of the pilot projects to disseminate findings, best practices, and lessons learned.

A steering committee under MoPSW and MNRE will monitor the scheme, while project appraisal and selection will be done through a transparent process.

The government hopes that the use of green hydrogen and its derivatives in the shipping sector, through the proposed pilot projects, will lead to the development of necessary infrastructure like refueling stations, storage, and distribution networks.

Last month, MNRE released an implementation framework to incentivize the production of 200,000 MT of green hydrogen annually.

Last month, ten companies won Solar Energy Corporation of India’s tender to set up 450,000 metric tons/annum production facilities for green hydrogen.