Abstract
India’s race to decarbonise its economy has placed green hydrogen at the centre of its energy strategy. The National Green Hydrogen Mission per annum and complementary policy measures have set ambitious targets, including producing of 5 million tonnes of green hydrogen annually by 2030 and initiated incentives to accelerate deployment. However, current measures are largely policy-oriented and fragmented across ministries and states, India lacks a single, coherent legal framework to regulate production, transportation, storage, safety, market formation, and cross-border trade in green hydrogen. Hence there is a need for analyses of the regulatory landscape, identifying the principal legal gaps, and proposing essential elements of a Green Hydrogen Act to provide legal certainty, ensure safety, and enable equitable, sustainable scale-up.
Introduction
Green hydrogen, produced by electrolysis using renewable electricity, is uniquely positioned to decarbonise hard-to-electrify sectors such as steelmaking, chemicals, heavy transport, and shipping, while also functioning as a long-duration energy storage medium. Recognising these possibilities, the Government of India launched the National Green Hydrogen Mission (NGHM) to make India a global production and export hub and introduced the Green Hydrogen Policy to incentivise offtake and facilitate access to cheap renewables. These initiatives are encouraging but remain policy instruments rather than a binding legal architecture that clarifies rights, obligations, and standards across the hydrogen value chain.
Keywords
Green Hydrogen, National Green Hydrogen Mission, Energy Law, Regulatory Framework, India, Electrolyser, Safety Standards, Infrastructure, Export.
Present regulatory landscape
India’s NGHM articulates strategic objectives, such as, production scale-up, demand creation, research and development, and export readiness and the Green Hydrogen Policy sets operational incentives and mechanisms to link renewables with hydrogen production. Central ministries (MNRE, Ministry of Power, Ministry of Petroleum & Natural Gas) and several state governments have announced programmes and pilot projects to build domestic capacity. Yet these instruments are dispersed across administrative orders, budgetary allocations, and state-level industrial policies rather than unified statutory law. The fragmentation leaves uncertainties on licensing, land allocation, inter-state transmission of hydrogen or renewable power dedicated to electrolysis, taxation, and liability in case of incidents
Key legal and governance gaps
Primarily, there is an absence of a single licensing and permitting regime for production, storage, and transportation of hydrogen. Secondly, safety and technical standards, including for electrolysers, pipelines, compressed/liquefied hydrogen handling, and fuel-cell usage are dispersed among sectoral guidelines and international standards without clear statutory adoption or enforcement pathways. Third, market design issues remain unresolved: rules for green-certificates, renewable energy-coupling, offtake guarantees, and tariff treatments for hydrogen electrolysis are still evolving, affecting bankability of projects. Fourth, governance defining the lead regulator, allocation of inter-ministerial roles, and dispute-resolution mechanisms is not settled in law, complicating private investment and long-term contracts. Finally, cross-border trade and export rules for hydrogen derivatives (ammonia, LOHCs) require customs, environmental, and trade law clarity to enable international commerce.
Reason for a need of dedicated legal framework
A statutory Green Hydrogen Act would provide predictable rules of the road for investors, industry, and communities. It would set binding safety standards and enforcement mechanisms, create a transparent licensing regime, allocate jurisdictional responsibilities among central and state bodies, and enshrine environmental safeguards (water use, lifecycle emissions accounting, siting and community consultation). A legal framework would also enable market instruments, such as green-hydrogen certificates, eligibility criteria for public procurement, and clear taxation/tariff treatment, thereby reducing regulatory risk and lowering financing costs. Empirical progress already underway large public and private investments and strategic joint ventures shows demand for clearer legal certainty to scale projects from pilot to commercial.
Required Legal Framework
Required Legal Statute: There is an ardent need for a dedicated umbrella national law for “green hydrogen” to avoid the ambiguity with hydrogen and ensure legislative clarity and stability.
Harmonize of safety regulations and standards: The current framework is a patchwork for existing laws (Gas Cylinders Rules, 1981) that need to be aligned with green hydrogen. A robust, consistent framework for safety standards across the entire value chain is crucial, potentially harmonized with international norms to facilitate exports.
Need for clear industrial categorization: The central government needs to clarify the industrial categorization of green hydrogen under Central Pollution Control Board guidelines. Currently hydrogen is often classified as a “Red” which denotes hazardous industry and can complicate the approval process for the green hydrogen projects that are inherently cleaner.
Rules for demand creation: Legally binding rules specifying a minimum amount of share of green hydrogen consumption for designated end-users in sectors like petroleum, fertilizers, refining are needed to ensure a stable market and to attract investment in the demand side.
Clear Regulation for Infrastructure and Storage: Clear legal provisions are required for the use and development of the dedicated infrastructure, including new pipelines, cryogenic tankers, and storage facilities as the existing natural gas infrastructure is not completely compatible with the pure hydrogen.
Fiscal and Financial Framework: Clarity on taxation (eg, GST) access to affordable, long term financing and potential inclusion under “priority sector lending”, status are needed to improve economic viability and attract the significant capital requirement.
Inter-Ministerial Coordination: A formalized powerful inter-ministerial body is necessary to coordinate across central and state government entities and provide single-window clearances in a time-bound manner, overcoming current bureaucratic fragmentation.
Implementation, priorities and safeguards
The framework must incorporate environmental justice safeguards: prioritise non-potable water sources, require local community engagement, and ensure small and medium enterprises can access offtake mechanisms to avoid capture by large incumbents.
Implementation should follow a staged approach: near-term rules to enable pilot commercialization (safety codes, grid access), medium-term statutory instruments for market design and finance certainty, and a comprehensive Act to codify long-term arrangements, including export and international cooperation regimes.
Judicial Interpretations on Environmental Protection
M.C. Mehta and Anr. vs Union Of India & Ors 1987 (1) SCC 395: The landmark judgement of MC Mehta case, established the principle of “absolute liability” for the industries engaged in hazardous activities and holding them responsible in case of harm irrespective of negligence.
The case is relevant as hydrogen is also considered as a hazardous substance so this principle is highly relevant for the future safety and for storage regulation in the green hydrogen sector of the country.
M.K. Ranjitsinh and others v. Union of India and others 2024 INSC 280 : Recent Supreme Court judgments have recognized the right to be free from the adverse effects of climate change as a fundamental right. The ruling underscores the judiciary’s take in aligning national projects with India’s climate goals and as well as international obligations, which provides for strong judicial support for the National Green Hydrogen Mission’s objectives.
Conclusion
India’s policy on green hydrogen is commendable and supported by ambitious targets and early investments. But policy statements and incentives alone cannot substitute for a coherent legal framework that addresses licensing, safety, market design, environmental limits, and cross-border trade. A statutory Green Hydrogen Act carefully staged and harmonised with existing laws will provide the legal certainty and governance clarity necessary for finance, innovation, and socially just deployment. If India wants to turn the NGHM’s vision into a resilient, export-competitive industry, lawmaking must keep pace with technological and market developments.
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WRITTEN BY- SOUMITA CHAKRABORTY
