The Government of Gujarat has notified the Green Hydrogen Policy 2025 to achieve a production capacity of 3 million metric tons per annum (MMTPA) by 2035.

The main objectives also include achieving 30 GW of electrolyzer capacity and 75 GW of renewable energy capacity. The state aims to facilitate investments of nearly ₹5 trillion (~$55.60 billion) across the green hydrogen and renewable energy sectors.

The policy also aims to create around 600,000 direct and indirect jobs, reduce natural gas consumption by at least 2 MMTPA, and cut carbon dioxide emissions by approximately 5 MMTPA.

Scope and Eligibility

The policy applies to green hydrogen production projects, hydrogen derivative projects such as green ammonia and green methanol, storage and transportation infrastructure, and end-use application units located within Gujarat. These include projects in special economic zones, domestic tariff areas, and export-oriented units.

Eligible developers include private companies, public sector undertakings, joint ventures, special purpose vehicles, government departments, and local authorities.

All projects must involve new plant and machinery and must be registered and sanctioned during the policy period, which extends until December 31, 2035, unless replaced earlier.

Renewable energy for green hydrogen production can be sourced through captive generation, third-party open access, distribution licensees, power exchanges, or a combination of these, including energy storage systems charged from renewable sources.

Project allocation under the policy may be undertaken through a competitive bidding process or in accordance with directions issued by the Apex or Executive Committee. Projects proposed by state and central public sector undertakings may be approved directly based on committee decisions.

The policy also specifies that a beneficiary can avail incentives under only one incentive category for a given project, preventing duplication of benefits across multiple sections of the policy.

Incentives for Electrolysis-Based Green Hydrogen Projects

The policy provides targeted incentives for electrolysis-based green hydrogen projects with electrolyzer capacities ranging from 1 MW to 10 MW, subject to an overall cap of 500 MW.

Project developers are eligible for a capital subsidy of 20% of eligible capital expenditure, capped at ₹10 million (~$111,207)/ MW of electrolyzer capacity. Additional capital subsidies are available for associated battery energy storage systems and oxygen collection and bottling infrastructure, subject to defined capacity and cost limits.

To reduce operational costs, the policy provides 50% reimbursement of transmission and wheeling charges for renewable electricity used in hydrogen production for five years from the date of commissioning.

Developers are also eligible for full reimbursement of land registration and stamp duty charges up to a specified ceiling.

Support for Biomass-Based Green Hydrogen Projects

Recognising alternative production pathways, the policy extends support to biomass-based green hydrogen projects with capacities up to 5 kilotons per annum. A maximum of five such projects are eligible under this category.

These projects are entitled to a capital subsidy covering 20% of eligible capital expenditure, subject to a cap of ₹80 million (~$889,632)/ kiloton of annual capacity. Land registration and stamp duty reimbursements are also available under enhanced limits.

Development of Integrated Green Hydrogen Hubs

A central feature of the policy is promoting green hydrogen hubs. These hubs are defined as geographically concentrated areas where hydrogen production, storage, transportation, and utilisation coexist with shared infrastructure.

The policy provides capital subsidies of up to ₹350 million (~$3.89 million)/hub for a limited number of projects, provided each hub has a minimum hydrogen production capacity of 3 kilo tons per annum and includes at least ten industrial units. At least one unit within each hub must be a green hydrogen producer.

The state has indicated a particular focus on coastal regions and port-adjacent areas to facilitate exports of green hydrogen and its derivatives.

Measures to Stimulate Hydrogen Demand

To ensure market development and offtake, the policy includes several demand-side incentives.

The policy offers a 30% capital subsidy up to ₹40 million (~$444,798) per unit for the establishment of the first 20 green hydrogen refuelling stations for vehicles, ships, and vessels, with each beneficiary eligible to claim support for up to three stations.

To promote clean public transport, a 30% capital subsidy, up to ₹5 million (~$55,599) per vehicle, is provided to GSRTC, PSUs, and urban local bodies for the purchase of the first 500 green hydrogen-based passenger buses.

Similarly, the policy supports the decarbonization of logistics and industrial transport through a 30% capital subsidy, up to ₹5 million (~$55,599), for the first 100 green hydrogen-based on-road and off-road heavy-duty vehicles procured by state entities and PSUs.

For industrial usage, registered micro, small, and medium enterprises (MSMEs) operating in Gujarat are eligible for reimbursement of ₹50 (~$0.54)/kilogram of green hydrogen consumed for five years, subject to an overall cap of ₹2.5 billion (~$27.79 million) and ₹25 million (~$277,998) per MSME.

Similar incentives are extended to city gas distribution operators to blend green hydrogen with compressed and piped natural gas networks.

Infrastructure Support and Facilitation Measures

The policy outlines extensive facilitation measures to support the development of green hydrogen infrastructure. Priority allocation of industrial land through the Gujarat Industrial Development Corporation is envisaged for hydrogen projects.

The state also commits to coordinating water supply, including desalination infrastructure, particularly within hydrogen hubs.

Transmission connectivity is addressed through plans for dedicated green energy corridors and the strengthening of substations and transmission lines. The policy also confirms that there is currently no electricity duty on renewable energy consumption under the Gujarat law.

Storage, transportation, and safety standards for hydrogen and its derivatives will be implemented in line with guidelines issued by the Government of India.

Port infrastructure will be leveraged to support hydrogen exports.

Manufacturing, Skills, and Research Ecosystem

Green hydrogen equipment manufacturing, including electrolyzers and associated components, is classified as an eligible industry under existing state industrial policies. Dedicated manufacturing clusters may be developed with time-bound statutory clearances.

The policy places strong emphasis on skill development, including specialized technician certification, safety training, and plant operation modules. Academic institutions will be encouraged to integrate hydrogen-related curricula and facilitate internships.

A budgetary allocation of ₹1 billion (~$11.12 million) has been earmarked to support research and development, centres of excellence, environmental studies, and startup incubation related to green hydrogen technologies.

Governance and Implementation Framework

Implementation of the policy will follow a three-tier governance structure. An Apex Committee chaired by the Chief Minister of Gujarat will oversee policy direction and inter-departmental coordination. An Executive Committee will handle project approvals, incentive disbursement, and operational oversight.

Gujarat Power Corporation has been designated as the nodal agency responsible for registration, monitoring, guideline formulation, and single-window clearances.

The policy restricts developers from availing similar incentives for the same project under multiple Gujarat state policies. In particular, projects benefiting from the Gujarat Waste Land Allocation Policy for Green Hydrogen Production, 2023, are not eligible for incentives under the Green Hydrogen Policy 2025.

The government has also retained the authority to review and amend the policy after two years or earlier in response to technological developments or implementation challenges, with provisions to issue clarifications and remove operational difficulties as required.

Gujarat recently notified the Integrated Renewable Energy Policy to achieve more than 150 GW of installed renewable energy capacity by 2035 and scale this to 300 GW by 2047.

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