Scheme Guidelines for Implementation of Pilot Projects for the use of Green Hydrogen in the Transport Sector

INTRODUCTION

The transportation sector is widely acknowledged as a prime area for the utilisation of green hydrogen, offering a sustainable substitute for fossil fuels and supporting the transition to a green hydrogen economy. To assess the potential for the use of green hydrogen in the transportation sector, the Ministry of New and Renewable Energy (“MNRE”) released the scheme guidelines for the implementation of pilot projects for the use of green hydrogen in the transport sector (“Scheme”) in 2024. These pilot projects will be implemented through the Ministry of Road Transport and Highways (“MoRTH”) and Scheme Implementing Agencies nominated by MoRTH (“SIAs”). A total of INR 496 crores from the outlay of the National Green Hydrogen Mission will be allocated for the implementation of the Scheme.

OBJECTIVE OF THE SCHEME 

1. Implement phased pilot programs to deploy green hydrogen as fuel for buses and trucks.
2. Validate the technical feasibility and performance of green hydrogen-operated vehicles under real-world operational conditions.
3. Assess the economic viability of hydrogen vehicles, evaluate refuelling station effectiveness, and identify areas of improvement.
4. Demonstrate safe and secure operations of hydrogen-based vehicles and hydrogen refuelling stations.

SCOPE OF THE SCHEME

The Scheme aims to close the viability gap due to the relatively higher capital cost of hydrogen-powered vehicles and the infrastructure for hydrogen refuelling stations by providing financial assistance to the selected projects in the initial years. However, expenses on account of hydrogen production, land, etc. will not be funded under the Scheme. The SIA will share knowledge and outcomes of the pilot projects through project completion reports, monitoring reports, workshops, and publications to disseminate best practices and lessons learnt from the pilot projects.

The scope of the Scheme is to develop/select/validate technologies for (i) the use of green hydrogen as fuel in buses, trucks, and four-wheeler vehicles with fuel cell/internal combustion engine-based propulsion technology (Component A) and (ii) supporting infrastructure like hydrogen refuelling stations (Component B).

IMPLEMENTATION APPROACH 

1. Selection of routes: SIA along with the executing agency will identify the routes covering different terrains and climatic conditions across India and such routes will be finalised by MoRTH.

2. Call for proposals: SIA will issue a call for proposals for the projects. CPSUs, state-PSUs, private sector, state corporations, and JVs/partnerships of such entities will be eligible to submit such proposals. The submission of each project should contain the name of the executing agency (“EA“) and in case of a consortium, a lead agency should be identified, which shall function as EA and shall also contain details covering vehicle type, vehicle technology, planning of mileage coverage, etc. in the prescribed format. The EA shall also be capable of taking forward the completed pilot projects towards commercialisation.

3. Evaluation and Award: The proposals will be evaluated by a project appraisal committee (“PAC”) in accordance with the criteria specified in the call for proposals. The letter of award shall be issued to the EA by the SIA upon receipt of administrative sanction from MNRE.

4. Execution and Commissioning: Work shall be executed as per the approved scope of work mentioned in the proposal. The SIA shall make all necessary efforts to complete the pilot project within 24 months from the date of awarding the project.

5. Technical and Regulatory approvals: The EA shall be solely responsible for obtaining the safety, environmental, and other required approvals.
6. Testing and Certification: The EA shall get necessary testing and certification compliance from concerned agencies.

MONITORING FRAMEWORK

TIMELINES

The Scheme mandates that the grants released shall be exclusively earmarked for the project and should not be diverted for any other purpose. If the EA fails to utilise the grant for the sanctioned purpose or fails to complete the project as per the detailed project report, the entire amount of the grant shall be refunded with interest as per the general financial rules to MNRE.

An extension of up to six months may be granted for the completion of the project based on adequate justification, with the approval of SC, without any penalty. Any extension beyond six months shall only be granted with the approval of the MNRE, with suitable penalties which shall be specified by SIA in the call for proposals.

FUNDING AND DISBURSEMENT 

The funds for the projects will be released to SIA by MNRE on the recommendation of the PAC who will monitor sanctioned projects every quarter for the allocation of funds based on the progress of the project. The stages of disbursement of CFA under the Scheme are as follows:

PROJECT COMPLETION 

The SIA shall submit the project completion report to the PAC within one month from the completion of the project which shall include (i) technical aspects of the project, (ii) technical challenges encountered during the project and measures adopted to overcome them, (iii) outcome of the project including the technical know-how generated during the execution of the project, and (iv) recommendations for future projects based on the lessons learned from the project.

CONCLUSION

The Scheme presents a comprehensive strategy to promote the adoption of green hydrogen in the transportation sector and it highlights India’s determination to become a global leader in green hydrogen space and contribute towards the global mission to reduce carbon emissions. The pilot projects envisaged under the Scheme will help to identify operational issues and gaps in current technology readiness, regulations, implementation methodologies, infrastructure, and supply chain which in turn will serve as valuable inputs for scaling and commercial deployment of green hydrogen in the transport sector.