In News:

At India Energy Week (January 2026), the Prime Minister highlighted investment opportunities worth $500 billion in India’s energy sector, signalling a shift from energy security to energy independence. A central pillar of this transition is green hydrogen and its derivative-green ammonia, which is emerging as a strategic fuel for agriculture, industry, shipping, and global trade.

India’s recent landmark auction through the Solar Energy Corporation of India (SECI) has positioned the country as a serious player in the global green ammonia market.

What is Green Ammonia?

Green ammonia is produced by combining:

• Nitrogen (from air)
• Green hydrogen (generated via electrolysis using renewable energy)

Unlike grey ammonia, which uses natural gas and emits significant CO?, green ammonia has a near-zero carbon footprint.

SECI’s Landmark Green Ammonia Auction

Under the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme of the National Green Hydrogen Mission, SECI floated a tender in June 2024 to aggregate demand across fertilizer plants.

Key Features:

• Target Demand: 7,24,000 tonnes per annum (TPA)
• Coverage: 13 fertilizer plants
• Bidders: 15 participants
• Successful Awardees: 7 companies
• Contracts Awarded: 13 delivery contracts
• One company secured 6 contracts (3,70,000 TPA)
• 10-year fixed-price offtake agreements

Discovered Prices:

• ?49.75–?64.74/kg
• $572–$744 per tonne
• Nearly 40–50% lower than EU’s H2Global auction (~$1,153/tonne)

By comparison: Grey ammonia in India ≈ $515/tonne

The price gap has narrowed substantially, especially with production subsidies:

• ?8.82/kg (Year 1)
• ?7.06/kg (Year 2)
• ?5.3/kg (Year 3)

This model created price certainty, payment security, and balanced risk allocation—boosting investor confidence.

Strategic Significance for India

1. Import Substitution and Energy Security

• Contracted volumes account for ~30% of India’s ammonia imports.
• Reduces exposure to global gas price volatility, currency risks, and geopolitical disruptions.

2. Decarbonising Agriculture

• Fertilizer sector is the largest ammonia consumer.
• Example: 75,000 tonnes supply to Paradeep Phosphates marks early transition.
• Supports sustainable food supply chains.

3. Maritime Decarbonisation

• Ammonia is easier to store than hydrogen.
• Can replace heavy fuel oil in shipping.
• Linked to Rotterdam–India–Singapore Green Shipping Corridor initiative.

4. Hydrogen Carrier for Exports

• Acts as a stable medium to transport hydrogen over long distances.
• Ports like Kandla, Paradip, and Tuticorin (VOC) designated as hydrogen hubs.
• Potential exports to Japan and South Korea.

5. Grid Stability & Energy Storage

• Enables long-duration energy storage.
• Hybrid systems (solar wind storage) being piloted for round-the-clock production.

Policy Framework

National Green Hydrogen Mission (2023)

• Target: 5 MMTPA production capacity by 2030
• Investment Potential: ?8 lakh crore
• CO? Reduction Target: ~50 MMT annually by 2030

SIGHT Programme

• Outlay: ?17,490 crore
• Production-linked incentives (PLI) for green hydrogen and derivatives.

Global Context

Other procurement mechanisms:

• EU’s H2Global import tender
• South Korea’s Clean Hydrogen Portfolio Standard (CHPS)