• UGI USER
  • Dec 11, 2023
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LONG TERM EXEMPTION FOR GREEN HYDROGEN PROJECTS

Why in the News?

  • Recently, the ministry has proposed an exemption on duties till 2035 mnre plans long-term exemption for green hydrogen projects for solar pv.
Source: The Economics times

Long-Term Exemption Plans

  • Ministry’s Proposal: MNRE suggests a duty exemption till 2035 for green hydrogen project equipment imports.
  • Aim: To facilitate cost-competitive imports for renewable energy equipment, aiding India’s hydrogen goals.
  • Exemption Extent: MNRE seeks to permit solar PV module and wind turbine model imports from China.
  • Rationale: Aims to bolster green hydrogen projects’ competitiveness by facilitating duty-free imports.

Regulatory Implications and Industry Concerns

  • Exemptions Scope and Impact: Plans to exclude Chinese manufacturers from eligible suppliers in the ALMM and RLM.
  • Industry Dynamics: Focus on boosting domestic manufacturing capacity amidst ongoing reliance on imported electrolysis machinery.

Government Actions and Procedural Considerations

  • Request to Finance Ministry: Developers asked for exemption requests, seeking changes in Finance Ministry’s orders.
  • Status and Government Response: No official request received; discussions ongoing to explore duty relief.

Economic and Policy Implications

  • Supply Chain Dynamics: MNRE’s move could address supply concerns, especially regarding solar PV modules.
  • Trade Competitiveness: Aims to enhance India’s competitiveness in the global green hydrogen market.
  • Upcoming Discussions: MNRE plans discussions with the Department of Revenue to deliberate further on this duty exemption.
  • Industry’s Call: Aims to meet ambitious targets of 125 gigawatts of additional renewable energy capacity by 2030.