CII demands mandatory green hydrogen blending across key industries

Industry body CII has urged the government to mandate green hydrogen blending across sectors such as refining and fertilisers, backed by incentives and cost-offset mechanisms to spur demand

The Confederation of Indian Industry (CII) said in a statement on Wednesday that it has urged the government to introduce green hydrogen mandates to spur demand in sectors such as refining, fertiliser and natural gas, along with cost-offset mechanisms.

 

It said a substantial cost gap exists between green and grey hydrogen, and greening mandates backed by incentives would help overcome this economic barrier, providing certainty to producers and enabling faster cost declines through economies of scale.

 

The mandates could be accompanied by cost-offset mechanisms such as carbon credit allocations for emissions saved, cross-subsidies — particularly in the fertiliser industry by offering cheaper natural gas if blended with green hydrogen — and viability gap funding to reduce the burden on consumers.

 

India marked a record-breaking year in its clean energy journey in 2025, with non-fossil fuel installed capacity rising to 266.78 GW. “While this represented a 22.6 per cent increase over 2024, with 49.12 GW of new non-fossil capacity being added to 217.62 GW in 2024, the next level of development will come with important technologies such as green hydrogen being promoted,” CII Director General Chandrajit Banerjee said.

 

CII said public procurement of green hydrogen-embedded products could also be encouraged. “Public infrastructure, such as housing, railways, ports and bridges, represents a significant channel to boost demand for green hydrogen derivatives. Mandating green procurement would establish predictable demand, lower green product prices, and de-risk investments by giving producers bankable offtake commitments,” it said.

 

Significant demand could be created if a public procurement mandate of 10–15 per cent of infrastructure-related materials — such as steel, ammonia and cement — for public projects were sourced from green hydrogen-based production units.

 

The industry body said a rapid shift to green steel and ammonia in export-oriented sectors is required to preserve India’s access to premium markets and catalyse domestic green hydrogen demand, improving cost efficiency and value chain maturity.

 

For this, it will be important to devise targeted transition support for steel and chemical exporters for green hydrogen integration to protect export competitiveness in carbon-sensitive markets, especially the European Union under the Carbon Border Adjustment Mechanism (CBAM), it said.