Indian state approves green hydrogen-based ammonia and methanol plants worth $5bn

The Odisha government has granted approval for investments in the expansion of ammonia storage capacity by 80,000 tonnes. Located in eastern India, the state of Odisha has given the green light to investment proposals for four projects focused on the production of green hydrogen, with a total estimated worth of 458.6 billion rupees ($5.5 billion).

Among these projects, two have ambitious goals of producing significant quantities of ammonia. Welspun New Energy, a subsidiary of the Mumbai-based conglomerate Welspun, is spearheading a project in Kendrapara that anticipates an output of approximately 700,000 tonnes of green NH3. The estimated cost for this facility is 138.6 billion rupees ($1.66 billion), constituting 19.5% of the Neom green ammonia project in Saudi Arabia, which is nearly twice the size.

Similarly, a subsidiary of Singaporean energy firm Sembcorp, focusing on Indian green hydrogen initiatives, has secured approval for a green ammonia project in Gopalpur, situated at the Tata Steel Special Economic Zone. This project, with an annual capacity of 720,000 tonnes, is projected to cost 130 billion rupees ($1.56 billion).

Additionally, the Odisha government has sanctioned the development of a new ammonia storage tank facility in Gopalpur, capable of storing 80,000 tonnes of NH3. Aegis Vopak will undertake this storage capacity expansion at a cost of 10 billion rupees ($119 million).

ReNew E-fuels Private Limited (REFPL), a special-purpose vehicle established by Indian renewable energy giant ReNew, has secured approval for two methanol plants based on green hydrogen. The first, located in Malkangiri, is designed to produce 100,000 tonnes of hydrogen annually, serving as feedstock for 500,000 tonnes of methanol per year, with an estimated cost of around 100 billion rupees ($1.2 billion). The second, smaller project in Rayagada, aims to produce 60,000 tonnes of H2 and 300,000 tonnes of methanol annually, with an anticipated cost of 90 billion rupees ($1.08 billion).

Details regarding the potential offtake from domestic markets or export targets for these ammonia and methanol projects have not been disclosed yet. India is striving to achieve a clean hydrogen production target of at least five million tonnes by 2030, with the federal government considering mandates for industries such as chemicals, oil refining, steel, and cement to incorporate a minimum percentage of green hydrogen in their overall usage. In July of this year, the federal government initiated its first subsidy auction for green hydrogen, limited to 450,000 tonnes of total annual hydrogen production capacity.