During Q1’26, green hydrogen prices remained firm as production costs and infrastructure requirements continued to outweigh the pace of supply expansion. Renewable electricity and electrolyzer economics remained the primary market drivers, while limited large-scale production capacity supported firm market sentiment. India’s green hydrogen transition accelerated through the National Green Hydrogen Mission, with approved electrolyzer manufacturing projects totaling about 1,500 MW, supporting future domestic production expansion. Demand remained steady from refinery integration, green ammonia production, steel manufacturing, industrial decarbonization, and mobility applications, while long-term offtake agreements continued supporting project development. Plant activity remained active during the quarter, with multiple hydrogen and electrolyzer projects advancing across Asia and Europe, including new electrolysis capacity developments and industrial hydrogen integration projects.
Analyst Insight
According to Procurement Resource, green hydrogen prices are expected to remain firm in the coming months, as gradual supply expansions, continued demand growth from industrial decarbonization, and clean fuel projects will continue to drive the green hydrogen markets.
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The green hydrogen price curve during the fourth quarter witnessed a relatively stable period, with production costs remaining constrained by persistent feedstock and equipment economics. India's market navigated ongoing cost challenges while government policy initiatives continued advancing the National Green Hydrogen Mission framework. Production economics remained pressured by elevated renewable energy input costs, particularly for round-the-clock power supply required for efficient electrolyser operations. Raw material expenses for electrolysis equipment, including precious metals and specialty components, maintained upward pressure on capital expenditure requirements for project developers, limiting scope for significant price reductions.
The quarter witnessed significant policy momentum as authorities announced capacity awards and manufacturing incentives. Multiple companies secured allocations for electrolyser manufacturing capabilities and production-linked support schemes covering substantial annual output volumes. Government measures included transmission charge exemptions and duty benefits aimed at improving project economics and encouraging domestic supply chain development. These initiatives reflected continued institutional commitment to scaling production capacity toward national targets.
Green hydrogen is produced using renewable energy sources like wind or solar power to split water into hydrogen and oxygen through electrolysis. It is considered a clean alternative to conventional hydrogen production, which relies on fossil fuels. Green hydrogen has various industrial applications, including ammonia production, steel manufacturing, and energy storage, and is key to decarbonizing sectors such as transportation and heavy industries, offering a sustainable pathway to reducing carbon emissions.
H2
Ammonia production, Steel production, Oil refining, Power generation, Transport (hydrogen-powered vehicles), Chemical production, Energy storage
CurrencyUS$ (Data can also be provided in local currency)
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The manufacturing process of Green Hydrogen occurs via the electrolysis process. The process starts with breaking water molecules using an electric current in an electrolyzer to extract dihydrogen (H2) at the cathode, and oxygen gas is collected at the anode. The electricity utilized in this process is generated from renewable sources like solar, wind, or hydroelectric power to produce Green Hydrogen.
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