Maharashtra govt goes all-in on green hydrogen, offers investors a sweet deal

The Maharashtra government has recently unveiled a comprehensive Green Hydrogen Policy, which will remain in effect until March 31, 2030. This policy introduces a range of incentives and highlights the key provisions of the Maharashtra Green Hydrogen Policy, which is valid until March 31, 2030. These benefits and concessions are applicable to renewable energy projects in the State that are fully integrated with GH2 projects and implemented during the policy's implementation period.

However, these benefits and concessions will be limited until the completion of projects in the state with a total hydrogen production capacity of 500 kilotons. An expert, who chose to remain anonymous, mentioned that a 30 percent capital cost subsidy will be available for hydrogen and similar production projects within the first three anchor units in the state, as well as for 100 percent related renewable energy projects. The said discount or benefit will be granted through the overall incentive scheme of the Industry Division after the project begins commercial production.

50 per cent concession in transmission charges and wheeling charges for 20 years will be given to the first three anchor units to be constructed in the State. Eligibility to enjoy other incentives and concessions for the first three anchor units including a hundred per cent investment in GH2 and similar production projects and related renewable energy projects must be owned by a single investor. Secondly, it is mandatory to use 100 per cent of the electricity generated from captive renewable energy plants in hydrogen and similar production plants.

Waiver of 50 per cent in applicable transmission and wheeling charges for 10 years if one technology of RE source is used whereas same is 60 per cent if Hybrid RE source is used. Cross Subsidy surcharge and additional surcharge are exempted subject to approval by MERC. 100 per cent electricity duty exempted for 10 years. Rs 50/kg grant by the State government for five years if GH2 is blended with CNG or PNG during this policy period.

Power banking facility and banking charges as applicable under MERC regulations. In addition to the benefits under this Policy, the “Package of Scheme of Incentives” announced for industries in the State of Maharashtra will also be applicable for GH2 and its derivatives. During the policy period, 30 per cent capital expenditure subsidy (Capex subsidy) will be given to the first 500 hydrogen-based fuel-cell passenger vehicles in the transport activities of the During the implementation period of the policy, the projects of transportation of hydrogen through pipelines implemented in the state will be allocated Rs. 2.5 crore per km with a maximum of 10km and 30 per cent of capex per project.

Any applicable non-agricultural tax is exempted for GH2 projects and the same is extended also to RE Generators supplying to such GH2 Projects. 100 per cent stamp duty exemption for any GH2 and associated projects (such as storage & transportation of GH2 etc). The revenue department will decide on this in the next 30 days. Water to GH2 projects will be made available at reasonable rates. The Water Resources Department will decide on this in the next 30 days.