A green hydrogen developer may have suitable land, renewable power availability and an electrolyser quotation, yet the project can still struggle at the financing stage. The lender or investor eventually asks a much simpler question: who will buy the hydrogen?
That question should be answered before plant capacity is finalised.
India is developing a sizeable green hydrogen ecosystem under the National Green Hydrogen Mission. Refineries and fertiliser companies currently provide some of the clearest industrial demand, while steel, chemicals, mobility, shipping and export markets are developing additional opportunities. For an investor planning a green hydrogen plant in India, the next step should therefore be a market and offtake feasibility study, not simply selection of electrolyser capacity.
India’s National Green Hydrogen Mission aims to establish at least 5 million metric tonnes per annum of green hydrogen production capacity by 2030. The Mission is also intended to support domestic utilisation and exports of green hydrogen and its derivatives.
There is already measurable project activity behind this target. Government reporting for FY 2025-26 states that approximately 862,000 MTPA of green hydrogen production capacity had been awarded to 18 companies under the incentive programme.
However, project developers should distinguish between three different numbers:
National production target: what India aims to produce.
Industrial hydrogen demand: hydrogen already consumed by refineries, fertiliser and other industries, much of which is presently fossil-based.
Contracted green offtake: actual green hydrogen or derivative volumes supported by tenders, purchase agreements or credible buyer commitments.
For a plant DPR, the third number is usually the most important.
India does not need to create every hydrogen use case from zero.
An MNRE-hosted clean-hydrogen study estimated India’s hydrogen demand at approximately 6.9 million tonnes in 2021, with refineries accounting for around 53% and fertiliser production about 44%. The same study expects hydrogen demand to expand substantially over the longer term as sectors such as steel and other industrial applications develop.
This existing demand base matters because green hydrogen can potentially replace part of the grey hydrogen already being consumed.
But replacement is not automatic. A buyer will compare the delivered price, reliability, purity, pressure, supply profile, contract terms and decarbonisation benefit against its existing hydrogen source.
That is why a technically feasible hydrogen plant may still be commercially weak if the intended buyer has not been identified.
The potential buyer pool is becoming clearer.
| Buyer segment | Likely product | Current market position |
|---|---|---|
| Refineries | Green hydrogen | One of the strongest direct-H2 markets |
| Fertiliser plants | Mainly green ammonia | Large aggregated offtake already being developed |
| Steel plants | Hydrogen / green derivatives | Growing through pilots and industrial decarbonisation |
| Chemical companies | H2, ammonia or methanol | Project and process dependent |
| Mobility | Compressed hydrogen | Early-stage and infrastructure dependent |
| Shipping | Green ammonia / methanol / hydrogen derivatives | Emerging |
| Export buyers | Hydrogen, ammonia, methanol and derivatives | Potentially large but certification and logistics intensive |
For project planning, these buyers should not be treated as interchangeable. A refinery hydrogen project can have a very different plant configuration from a green-ammonia export project.
Refineries are particularly important because they already use substantial quantities of hydrogen in their operations.
As of August 2026, the Government reported 30 KTPA of green hydrogen production capacity awarded for refinery applications:
Government reporting also indicates that the Numaligarh project achieved a price discovery of approximately ₹279/kg, while other refinery projects were reported broadly in the ₹330-₹350/kg range excluding taxes. These figures are results of specific tenders and should not be used as a universal selling-price assumption for a new project.
A proposed hydrogen plant must calculate its own delivered cost based on renewable electricity, electrolyser efficiency, plant utilisation, water treatment, compression, storage, transport and financing.
The fertiliser sector presents a slightly different opportunity.
Instead of simply selling gaseous hydrogen to distant fertiliser plants, many projects convert green hydrogen into green ammonia, creating a derivative that aligns directly with fertiliser manufacturing requirements.
SECI’s demand-aggregation programme has allocated approximately 724,000 tonnes per annum of green ammonia supply to 13 fertiliser units. Government reporting shows discovered prices of roughly ₹49.75 to ₹64.74 per kg.
In March 2026, purchase and supply agreements covering 670,000 tonnes per annum were exchanged for 11 projects, with 10-year arrangements intended to provide longer-term demand certainty.
This is important for investors because long-term offtake can reduce one of the biggest risks in green hydrogen projects: uncertainty over who will purchase the output once the plant is commissioned.
However, a tonne of green ammonia should not be represented as a tonne of green hydrogen when presenting market size. The product, conversion process, storage system and economics are different.
Steel represents one of the major longer-term opportunities because conventional steelmaking is difficult to decarbonise through electricity alone in every process route.
India has already moved beyond laboratory-only activity. Government reporting states that JSW commissioned 3,600 MTPA of green hydrogen production capacity in November 2025.
Chemical production, methanol, industrial heating and certain specialty industrial applications can provide additional opportunities. Smaller industrial customers may also become viable where a hydrogen plant can be located close to the point of consumption and avoid expensive long-distance logistics.
The key consideration is not simply whether an industry “can use hydrogen.” The project team needs to establish:
how much it needs, what specification it requires, how consistently it consumes it and what delivered price it can accept.
India’s strategy also targets exports of green hydrogen and derivatives.
In July 2026, the Government highlighted long-term international offtake developments involving ACME and Japanese companies for green ammonia and green methanol.
Export projects, however, introduce additional conditions. Port access, conversion technology, shipping, storage, destination-country standards, emissions methodology and buyer certification requirements become part of the feasibility model.
For EU-bound hydrogen, carbon compliance is especially relevant. The EU’s CBAM entered its definitive period on 1 January 2026, and hydrogen remains one of the products covered. The European Commission’s May 2026 guidance also states that hydrogen importers must be authorised CBAM declarants.
For an Indian producer targeting Europe, credible emissions records therefore become part of commercial market access rather than merely ESG documentation.
A Letter of Intent can demonstrate buyer interest, but it is not the same as a bankable long-term sales arrangement.
A project developer should evaluate at least the contracted annual quantity, contract tenure, minimum purchase obligations, price or price-adjustment mechanism, buyer creditworthiness, delivery point, hydrogen specification, certification conditions, renewable-energy requirements, transport responsibility and consequences of plant or buyer underperformance.
This directly affects the DPR.
For example, suppose a proposed plant has the technical capability to produce 20,000 tonnes each year but only 6,000 tonnes have a credible buyer pathway. Preparing the base financial model using full 20,000-tonne annual sales could materially overstate revenue.
A stronger DPR would create separate contracted, probable and uncontracted demand cases.
Before freezing plant size, a promoter should be able to answer six practical questions:
If these questions remain unresolved, the project may still be worth developing, but the capacity and financial assumptions should remain provisional.
India notified its Green Hydrogen Standard with a well-to-gate emissions threshold of not more than 2 kg CO2 equivalent per kg of hydrogen for hydrogen classified as green under the national framework.
The Green Hydrogen Certification Scheme of India followed in April 2025, and the national certification portal was launched in June 2026 to support transparent certification and regulatory compliance.
This means renewable electricity sourcing, energy accounting and emissions measurement should be considered during plant design rather than being addressed only after commissioning.
A proper market study should go considerably beyond a national market-size forecast.
For a proposed project, Green Permits recommends connecting the market assessment with the technical and financial DPR. The analysis should establish the targeted buyer cluster, current and projected demand, competing suppliers, historical or current tender prices where comparable, transport radius, product specification, renewable power strategy, production cost and realistic sales scenarios.
The financial model should then test whether the project remains workable if electricity prices rise, electrolyser utilisation is lower than planned, the commissioning date slips or only part of the proposed capacity is contracted.
This is particularly important for hydrogen because a project with cheap production but expensive delivery can be less attractive than a slightly higher-cost plant located directly beside the consumer.
There is no single “best state” for every green hydrogen plant.
A suitable site requires a combination of competitive renewable electricity, water availability, industrial land, transmission or captive renewable-energy options, proximity to buyers, storage and transport feasibility, environmental requirements and, for derivative exports, access to suitable port infrastructure.
The Mission’s development of hydrogen hubs reinforces this cluster approach. Gujarat, Odisha and Tamil Nadu are particularly relevant because major ports in these states have been identified as Green Hydrogen Hubs.
State incentives may improve a project’s economics, but a subsidy should not compensate for a weak buyer strategy.
Green Permits can support promoters before major project expenditure is committed by linking market feasibility, project configuration, regulatory planning and financial modelling.
A Green Hydrogen DPR can be structured around:
Government incentives, approvals and project costs should be evaluated for the specific project rather than assumed from another plant.
Yes. India already has a large conventional hydrogen consumption base, particularly in refineries and fertiliser production, while Government-supported green hydrogen and green ammonia procurement is creating identifiable early demand. However, individual projects still need their own buyer and price assessment.
Refineries are among the strongest direct hydrogen buyers. Fertiliser companies create substantial demand through green ammonia, while steel, chemicals, mobility, shipping and international buyers represent additional developing markets.
For a large project, the buyer strategy should normally be developed before finalising capacity and financing. Lenders and investors are likely to give significantly greater weight to credible contracted revenue than to a general market-growth forecast.
Start with a combined market, technical and financial feasibility study. Identify the likely buyer, product, annual quantity, location, renewable-energy source and delivered cost before freezing the electrolyser capacity.
The green hydrogen market in India is entering a more commercial phase. The strongest evidence is not simply the 2030 target but the emergence of refinery procurement, large green-ammonia allocations, long-term fertiliser agreements, industrial projects and international offtake.
For a new investor, this changes the order in which a project should be planned.
Buyer → offtake quantity → product → location → technology → plant capacity → financial model.
Starting with plant capacity and searching for buyers afterwards creates unnecessary project risk.
For businesses evaluating a green hydrogen plant, Green Permits can assist with market assessment, project feasibility, DPR preparation and regulatory planning.
📞 +91 78350 06182
📧 wecare@greenpermits.in
👉 Book a Consultation with Green Permits
