In a move that can make India one of the largest hydrogen producers, the Modi government is set to make it mandatory for oil refineries and fertiliser manufacturers to produce or procure green Hydrogen to meet part of their needs.

Green Hydrogen is the cleanest fuel as it is produced through electrolysis using renewable energy.

The renewable energy ministry has sent the proposal for Cabinet approval after discussing it with relevant ministries.

Under this initiative, refineries will have to use green Hydrogen for meeting 10 per cent of their requirement from 2023-24. This requirement will rise to 25 per cent in five years, reports The Economic Times.

Similarly, Fertiliser makers will start with 5 per cent green hydrogen, which will go up to 20 per cent. The proposal for the Cabinet also seeks approval to extend the policy to other industries like steel and the transport sectors at a later stage.

"Currently refineries and other user industries produce grey hydrogen from natural gas. This method produces CO2. The policy will create a market for green Hydrogen, which in turn will attract investments in its production," power and renewable energy minister R K Singh said.

"Companies can bring renewable energy from anywhere to produce green Hydrogen. The cost impact will be negligible. Going by our estimates, India can be one of the largest producers of green Hydrogen in the world," he added.