UPSC Prelims Practice Questions — AM Green bags €585 mn green ammonia deal

Q1. With reference to the pathways used to produce hydrogen, consider the following statements: Which of the statements given above is/are correct?

  1. Grey and blue hydrogen are both made by steam methane reforming of natural gas, and they differ in whether the carbon dioxide released is captured.
  2. Switching from grey to blue hydrogen reduces the carbon dioxide released to the atmosphere but does not end the dependence on natural gas as a feedstock.
  3. Green hydrogen production by electrolysis splits water into hydrogen and oxygen and needs no hydrocarbon feedstock.
  • A. 2 and 3 only
  • B. 1 only
  • C. 1, 2 and 3
  • D. 1 and 3 only

Q2. Consider the following facts. SECI's first green ammonia auction under SIGHT discovered a price of about USD 641 per tonne, fixed for ten years. An H2Global auction in 2024 had discovered about USD 1,153 per tonne for Indian green ammonia. Grey ammonia was priced at about USD 515 per tonne in March 2025. Which of the following inferences can validly be drawn from these facts?

  1. At the time of the SECI auction, green ammonia still cost more than grey ammonia.
  2. Green ammonia will necessarily become cheaper than grey ammonia before 2030.
  3. If grey ammonia prices rise during the next decade, the fixed-price contract could narrow or reverse the cost gap for the offtaker.
  4. Indian producers can now supply European buyers at about USD 641 per tonne under H2Global auctions.
  • A. 1 and 2 only
  • B. 2 and 4 only
  • C. 1, 3 and 4 only
  • D. 1 and 3 only

Q3. With reference to the H2Global mechanism, under which the intermediary Hintco contracted to buy green ammonia from an Indian producer, consider the following statements: Which of the statements given above is/are correct?

  1. The intermediary buys from producers through short-term contracts and sells to buyers in Europe through long-term contracts.
  2. The gap between the price paid to producers and the price received from European buyers is covered by grant funding from the German government.
  3. European buyers are spared long-term purchase commitments because they buy from the intermediary through short-term contracts.
  • A. 1, 2 and 3
  • B. 2 and 3 only
  • C. 1 and 2 only
  • D. 1 only

Q4. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. The H2Global design allows an overseas producer to secure a long-term offtake contract even when its price is higher than what European buyers are currently willing to pay.
  2. Under H2Global, the price paid to the producer is set by the outcome of short-term resale auctions in Europe.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q5. With reference to the European Union's Carbon Border Adjustment Mechanism (CBAM), consider the following statements: Which of the statements given above is/are correct?

  1. It is designed to counter carbon leakage, where carbon-intensive production relocates to countries with weaker climate policies.
  2. Its charge is based on the emissions embedded in producing the imported goods, not on the emissions from using those goods within the EU.
  3. During its transitional phase from October 2023 to December 2025, EU importers of covered goods had to both report embedded emissions and pay the carbon levy.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q6. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. Under the EU's Carbon Border Adjustment Mechanism, the levy on covered imports such as fertilisers is formally paid by the non-EU exporter directly to the EU.
  2. The price of CBAM certificates is linked to the auction price of allowances in the EU Emissions Trading System.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct