PTI New Delhi

The price of green hydrogen - the zero-emission fuel produced from splitting water - has fallen by more than USD 1 per kg in the tenders floated by state-owned oil companies like Indian Oil Corporation (IOC), Oil Minister Hardeep Singh Puri said on Thursday.

From USD 5.5 per kg, the price of green hydrogen - which can be used to replace coal or natural gas in steel, cement, and chemical production as well as fossil fuel-derived grey hydrogen in refineries and ammonia production - has come down to USD 4.4-4.5 per kg in the latest tenders. 

In a tender floated by IOC for a 10,000 tonnes per annum green hydrogen production at the firm's Panipat refinery in Haryana, Larsen & Toubro offered a tax-inclusive price of USD 4.5 for 25 years, he said at the World Hydrogen India conference of S&P Global here.

Subsequent tenders for 5,000 tonnes floated by BPCL and HPCL saw Ocior Energy bid USD 4.39 per kg, he said, hoping the prices will fall further in newer tenders in the near future. 

Green hydrogen is made by splitting water into hydrogen and oxygen using electricity generated from renewable sources. It has virtually no greenhouse gas emissions, making it an environmentally friendly alternative to fossil fuels. It can be used in industries such as steel, cement and chemicals, transportation and power generation. India is aiming to become a major player in the global hydrogen market, backed by new investments and policy support. It is targeting production of 5 million tonnes per annum of green hydrogen by 2030.