Cost, not technology, is the main barrier to green hydrogen adoption. Critically analyse in light of recent auction outcomes in India.

Green hydrogen is hydrogen made by splitting water with renewable electricity. It is India's chosen route to decarbonise hard-to-abate sectors under the National Green Hydrogen Mission (₹19,744 crore; at least 5 MMT/year by 2030) [1]. Recent auctions confirm that cost is the binding constraint today. However, that cost is itself shaped by technology, finance and infrastructure gaps.

Why cost appears to be the main barrier

• Falling but subsidised prices: SECI's first green ammonia auction under SIGHT discovered ₹55.75/kg, against ₹100.28/kg in the 2024 H2Global auction [2]. Later rounds ranged ₹49.75–64.74/kg [3]. These are prices after the ₹17,490 crore SIGHT incentive [1], not prices without support.
• Time-bound concessions: ISTS charges are waived for 25 years only for plants commissioned by 31 December 2030 [4]. Later plants pay more just when the target falls due.
• Grey hydrogen still cheaper: green ammonia must undercut ammonia made from imported natural gas. Only government-run, fixed-price auctions have closed this gap so far.
• Capital-heavy economics: electrolysers and solar or wind plants are paid for upfront. The cost of finance, more than the technology itself, sets the final price.

Why technology and system constraints also matter

• Nascent electrolyser base: only 3,000 MW of electrolyser manufacturing capacity has been awarded, to 15 firms [5]. The ₹100 crore call for start-up R&D proposals [6] shows that technology gaps remain.
• Storage and transport: hydrogen is hard to move. Production therefore has to be clustered in designated Green Hydrogen Hubs [1].
• Scale and demand gap: the 8,62,000 tonnes/year of capacity awarded by May 2025 is only about 17% of the target [5]. Offtake still depends on state-run tenders such as the 7.24 lakh MT/year ammonia tender [2].
• Water stress: electrolysis needs purified fresh water, which is scarce in solar-rich arid states.
• Standards and credibility: the 2 kg CO₂e/kg H₂ well-to-gate limit [7] is averaged over 12 months. Export buyers may demand stricter proof that clean power was used.

Cost is the immediate barrier, but it reflects immature manufacturing, expensive capital, missing infrastructure and thin demand. The way forward is to:

• extend SIGHT beyond FY 2029–30 and add credit guarantees;
• mandate green hydrogen purchases by fertiliser and refining firms;
• use desalinated water at coastal hubs;
• deepen R&D.

Together these can turn auction gains into lasting competitiveness, advancing SDG 7 and Net Zero 2070.