Government unveils incentives for production of 550,000 MT of green ammonia

Green Ammonia

The Ministry of New and Renewable Energy (MNRE) has established the incentive implementation structure for generating and delivering green ammonia at the most economical rate through a competitive selection procedure within mode 2A of the strategic interventions for green hydrogen transition (SIGHT) initiative. Within this framework, direct incentives for the production and distribution of green ammonia will be provided over a span of three years from the date of commencement. The entire budget for the green hydrogen and its derivatives production incentive scheme across all modes amounts to Rs 130.5 billion. During the initial year, the incentive stands at Rs 8.82 per kg, followed by Rs 7.06 per kg in the second year, and further reduced to Rs 5.30 per kg in the third year. Hydrogen and its derivatives produced and supplied under the SIGHT programme cannot simultaneously qualify for incentives under two distinct modes.

The implementation responsibilities for the tasks assigned by MNRE will be undertaken by the Solar Energy Corporation of India (SECI). SECI’s role encompasses tasks such as receiving and evaluating applications, issuing acknowledgments and awards, scrutinising incentive claims from beneficiaries, and verifying claims with the required documents. SECI will additionally gather information on the advancement and effectiveness of the programme, submitting quarterly reports to MNRE. SECI is entitled to an administrative fee of 0.5 per cent of the disbursed incentive amount each year.

The tranche I of mode 2A allows for the bidding of 550,000 metric tonnes (MT) per annum of green ammonia. Any additional capacity for green ammonia, if deemed necessary, will be determined by MNRE for subsequent tranches. SECI reserves the right to set a minimum capacity below which no bids will be accepted. Additionally, SECI may set a cap, or the maximum capacity that can be provided to single bidder. The assigned capacity will remain consistent for a duration of three years. Incentives will be distributed annually to each successful bidder once the necessary claim is submitted and duly verified by MNRE through SECI.

In order to be eligible for incentives, the bidder must comply with the national green hydrogen standard established by MNRE when utilising green hydrogen in the production and distribution of green ammonia. The calculation is based on 0.1765 kg of green hydrogen per kg of green ammonia, impacting both the quantity of green hydrogen and the corresponding incentive for a given amount of green ammonia. A committee overseeing the scheme, headed by the secretary of the Department of Fertilisers and the secretary of MNRE, alongside the mission director of National Green Hydrogen Mission and additional experts, will regularly assess the progress and performance of green ammonia production capacities.

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