Green hydrogen gets official stamp as India notifies certification scheme, carbon credit rules
To boost India's green hydrogen exports and encourage energy-intensive sectors to adopt the emerging fuel, the Centre has introduced a certification scheme under the National Green Hydrogen Mission and notified rules for claiming emission offsets under the Carbon Credit Trading Scheme (CCTS).
Union Minister of New and Renewable Energy Pralhad Joshi on April 29 launched a scheme to measure, monitor, report, verify on-site, and certify green hydrogen based on a standard introduced by the Ministry in 2023.
What is green hydrogen certification?
'This will help to ensure that the hydrogen produced in India truly qualifies as green. A lot of greenwashing tends to happen these days, which is why certification is most important. With the certification in place, our green hydrogen will carry a mark of quality and credibility, making it globally desirable and export-ready,' Joshi said about the scheme.
On April 27, the Bureau of Energy Efficiency (BEE), nodal agency for the Green Hydrogen Certification Scheme, also announced an offset mechanism for hard-to-abate sectors using green hydrogen under CCTS, to allow them to earn and trade credits.
While CCTS does not yet include sectors like steel, refineries, and shipping, where there is a use case for switching to green hydrogen, the latest guidelines will provide industry greater clarity on compliance before the ambit of CCTS eventually widens.
A perfect framework for Green Hydrogen, under the visionary leadership of Hon'ble PM Shri @narendramodi ji, enabling clear measurement, monitoring and certification, paving the way for MSMEs to thrive in sustainable energy. pic.twitter.com/RFN9Hs4q2I
— Pralhad Joshi (@JoshiPralhad) April 29, 2025
In 2023, the Ministry of New and Renewable Energy (MNRE) introduced a green hydrogen standard, capping emissions at 2 kg of CO2 per kg of hydrogen produced. The certification scheme, based on the standard, applies only to green hydrogen production from electrolysis or conversion of biomass.
With the scheme in place, the export appeal of Indian green hydrogen is likely to increase. At the launch, Joshi said India has signed an agreement with Japan to supply over 4 lakh tonnes of green hydrogen derivatives like green ammonia. The heads of terms (HoT) for the cross-border supply of green ammonia to Japan were signed in August last year.
Still, high production costs remain a hurdle. In March, the Parliament's Standing Committee on Energy noted that 'the current cost of production of green hydrogen is quite high,' and called for green hydrogen hubs to be located in regions rich in renewable energy, water, and proximity to demand centres to be economically viable.
For exports, the government has identified Kandla, Paradip, and Tuticorin—all with international ports—as key hubs for green hydrogen production.
'In 2012-13, the cost of solar energy was Rs 12 per unit; today it's around Rs 2,' Joshi said. 'What made this possible? Scale, skill, and speed. Green hydrogen will follow the same path,' he added.
Offset rules for carbon credits introduced
At the launch of the green hydrogen certification scheme, Saurabh Diddi, director of BEE, emphasised the importance of ensuring transparency, authenticity, and accountability in green hydrogen production. Diddi also said the certification scheme 'will enhance investor confidence and enable producers to access carbon credits'.
On April 27, the BEE, under the Ministry of Power, released a methodology for estimating carbon offsets from green hydrogen produced via electrolysis. In effect, it defines how switching from fossil fuels like coal to green hydrogen can reduce emissions and earn tradable credits under CCTS.
So far, emissions targets under CCTS apply only to sectors like aluminium, chlor-alkali, pulp and paper, and cement, where the potential of green hydrogen is limited. However, the new methodology offers a compliance roadmap for hard-to-abate sectors like steel and shipping, once CCTS expands to cover them.
To be clear, the green hydrogen certification scheme itself is not a mitigation tool and does not generate emission reduction credits. However, it can be used to support claims for credits under CCTS.
Heavy water use for green hydrogen prompts desalination push
Compared to the rules for green hydrogen certification, the carbon offset mechanism under CCTS sets significantly stricter standards—especially on water use for electrolysis. CCTS guidelines, for instance, cap a project's water consumption at no more than 5 per cent of the locally available drinking water, to ensure it does not displace other uses.
Producing 1 kg of green hydrogen via electrolysis requires around 10 litres of treated water, according to official estimates.
'The treated water required for hydrogen production can also be sourced by desalinating seawater or treating wastewater, with only a marginal impact on the cost of hydrogen production,' the MNRE told the Standing Committee on Energy.
'Under the Mission, sustainable use of water will be encouraged. R&D will also be supported for technologies that can utilise seawater or waste water directly, thereby reducing the need for treatment and further decreasing the water requirement,' it said.
Backed by an outlay of nearly Rs 20,000 crore, the National Green Hydrogen Mission also supports domestic electrolyser manufacturing, green hydrogen production, and sector-specific pilot projects.
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