The Hindu Editorial Analysis
24 February 2026
India’s energy shift through the green ammonia route
(Source – The Hindu, International Edition, Page no.-10 )
Topic: GS Paper 3 – Energy, Infrastructure & Environment
Context
At the India Energy Week (2026), India placed clean energy — particularly green hydrogen and its derivatives like green ammonia — at the core of its long-term energy independence strategy.
With a projected $500 billion investment opportunity in the energy sector, green ammonia is emerging as a practical and scalable pathway to decarbonise fertilizers, shipping, power, and industry.
India’s green ammonia auctions under the Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme mark a significant structural shift in clean fuel procurement.
Why Green Ammonia Matters
Green ammonia is produced by combining:
- Green hydrogen (via electrolysis using renewable energy)
- Nitrogen (N₂)
It is strategically important because:
- Easier to store and transport than hydrogen.
- Already integrated into fertilizer supply chains.
- Acts as a hydrogen carrier.
- Can be used as marine fuel and industrial feedstock.
Globally, regions like:
- European Union
- South Korea
- India
are shaping emerging green ammonia markets.
India’s Green Ammonia Auction Model
Under the SIGHT programme:
- SECI floated a tender (June 2024).
- Aggregated demand: 724,000 tonnes annually.
- Covering 13 fertilizer plants.
- 15 bidders participated.
- 7 successful awardees secured 13 contracts.
Key Features
- 10-year fixed-price offtake agreements.
- Production incentives:
- ₹8.82/kg
- ₹7.06/kg
- ₹5.3/kg (first three years).
- One company secured 6 contracts (3.7 lakh tonnes/year).
Price Discovery & Competitiveness
Discovered prices range:
- ₹49.75/kg to ₹64.74/kg
- Equivalent to $572–$744 per tonne
Comparison:
- Grey ammonia in India: ~$515/tonne
- Gap narrowing significantly when long-term contracts and incentives are included.
Importantly:
- Indian green ammonia prices are ~40–50% lower than H2Global benchmarks.
This sets new global price signals.
Delivery & Logistics Innovation
A key innovation:
- Pre-identification of delivery points.
- Coastal fertilizer plants as anchor consumers.
- Shipping-based supply chains enabled.
Contracts account for:
- ~30% of India’s imported ammonia demand.
This:
- Reduces exposure to global gas volatility.
- Improves price predictability.
- Shields against currency and geopolitical risks.
Strategic Significance for India
1. Energy Security
- Reduces dependence on natural gas imports.
- Insulates fertilizer subsidy burden from gas price spikes.
2. Industrial Decarbonisation
- Fertilizer sector is a major ammonia consumer.
- Green ammonia reduces industrial emissions.
3. Global Market Leadership
India’s model combines:
- Aggregated demand
- Long-term contracts
- Transparent auctions
- Incentive support
This positions India as:
- A rule-setter in emerging clean fuel markets.
Emerging Global Context
Comparable procurement mechanisms:
- EU’s H2Global mechanism
- South Korea’s Clean Hydrogen Portfolio Standard (CHPS)
India’s auction design may:
- Influence global standards.
- Accelerate scale adoption in developing economies.
Challenges Ahead
Despite early success, sustaining momentum requires:
1. Financing & Bankability
- Long-gestation projects need:
- Blended finance
- Risk-mitigation instruments
- Long-tenor capital
2. Renewable Integration
- Hybrid renewable + storage systems needed.
- Stable power supply essential for electrolysers.
3. Regulatory Alignment
- Certification standards
- Safety norms
- Export protocols
- International harmonisation
4. Infrastructure
- Port facilities
- Storage infrastructure
- Pipeline retrofitting
Policy Imperatives
To scale further:
- Stable grid access and banking mechanisms.
- Harmonised safety standards.
- Transparent carbon accounting frameworks.
- Export-linked incentives.
- Blended finance with multilateral backing.
Broader Economic Implications
Green ammonia shift can:
- Reduce fertilizer subsidy vulnerability.
- Enhance climate leadership.
- Create domestic manufacturing ecosystems.
- Stimulate renewable energy expansion.
- Strengthen India’s clean energy diplomacy.
It aligns with:
- National Green Hydrogen Mission
- Net-zero by 2070 target
- Global decarbonisation efforts.
Conclusion
India’s green ammonia auction model marks a decisive move from policy ambition to market execution. By combining demand aggregation, long-term price certainty, and incentive design, India is narrowing the cost gap between green and grey ammonia while laying the foundation for a resilient clean fuel ecosystem.
If sustained through regulatory clarity, financing innovation, and infrastructure expansion, green ammonia can become not merely a decarbonisation tool but a pillar of India’s energy sovereignty and global climate leadership.