India’s energy landscape is no longer shaped solely by coal and oil. As the energy demand grows, the nation is moving towards a more diversified fuel ecosystem powered by green hydrogen, biofuels, liquefied natural gas (LNG), sustainable aviation fuel (SAF), compressed biogas (CBG) and other emerging fuels. These sources are not just trendy alternatives any more; they are becoming central to India’s strategy for energy security, climate action and economic development, parallel to national targets.
The shift towards a more diverse energy system is being driven by three major forces – energy security, climate commitments and economic opportunity. As one of the world’s largest importers of crude oil, India is seeking to reduce its dependence on imported fossil fuels by expanding domestic production of alternative fuels and cleaner energy sources. At the same time, the country is working towards its climate commitments, while creating new industries, attracting investment and generating employment across emerging energy value chains. Over the past few years, the conversation has shifted from simply sourcing more oil and gas to diversifying fuels entering the energy ecosystem. Ethanol is now being blended into transport fuels, LNG is expanding across mobility and city gas distribution (CGD) networks, refineries are preparing for green hydrogen integration, the aviation sector is exploring SAF and renewable energy sources such as biogas and biomethane are beginning to enter conventional gas networks. Rather than a direct substitution of conventional sources, this transition is the gradual emergence of a broader energy ecosystem, where multiple fuel sources can coexist.
Green hydrogen: The fuel of the future
The green hydrogen and ammonia market in India is expanding continuously, supported by a growing project pipeline, supply agreements, investments in manufacturing and policy initiatives. Project activity in the country now spans green hydrogen production, green ammonia and methanol derivatives, mobility pilots, refinery-linked applications and electrolyser manufacturing.
The market is in an early build-out phase, with a large part of the pipeline concentrated in bidding, awarded and under-construction stages. As of May 2026, India Infrastructure Research has tracked around 9.86 million tonnes per annum (mtpa) of green hydrogen capacity and 18.47 mtpa of green ammonia capacity under bidding. A further 1.14 mtpa of green hydrogen capacity and 6.41 mtpa of green ammonia capacity has been awarded, while another 1.55 mtpa of green hydrogen and 7.22 mtpa of green ammonia capacity is currently under construction. Operational capacity remains limited at about 14,720 tonnes per annum (tpa) of green hydrogen and 1,750 tpa of green ammonia. Around 110,000 tpa of previously announced green hydrogen capacity has also been cancelled, indicating that project implementation remains a key challenge for the sector.
Additionally, the top five green hydrogen and ammonia states by capacity include Gujarat (9,025,209 mtpa), Odisha (8,556,500 mtpa), Andhra Pradesh (8,408,778 mtpa), Karnataka (5,814,545 mtpa) and Tamil Nadu (5,397,450 mtpa).
India’s green hydrogen and ammonia sector is moving beyond announcements, but it is yet to reach industry-wide commercial scale. Many policy moves have accelerated green hydrogen adoption. Back in 2023, India launched the National Green Hydrogen Mission (NGHM) with an initial outlay of Rs 197.44 billion (about $2.4 billion) to make India a global hub for green hydrogen production, use and export. As of February 2026, India had commissioned around 8,000 tpa of green hydrogen production capacity under the mission.
The Strategic Interventions for Green Hydrogen Transition (SIGHT) programme, with an outlay of Rs 174.9 billion, provides strategic incentives for green hydrogen production and electrolyser manufacturing. Several pilot projects are under way, including mobility pilots worth Rs 4.96 billion and shipping pilots worth Rs 1.15 billion, to test green hydrogen in the transport and logistics sector. Another Rs 4.55 billion has been allocated for pilot projects to use green hydrogen in steel production, one of the most difficult sectors to decarbonise. Policy measures such as waiving interstate transmission charges for renewable energy used in green hydrogen production, enabling renewable energy banking and ensuring faster open access connectivity have further strengthened the ecosystem.
The private sector has also moved from announcements to implementation. Reliance Industries and NTPC Limited have announced large green hydrogen projects, aiming to integrate it into refining, power and steel. Mobility initiatives are also emerging across the country. In May 2026, the Delhi Metro Rail Corporation, in collaboration with the Ministry of Housing and Urban Affairs and the Ministry of Petroleum and Natural Gas, launched an integrated hydrogen-powered shuttle bus service in Delhi’s Central Vista area. Meanwhile, Cochin International Airport Limited is preparing to become the first airport in India to deploy hydrogen-powered buses for passenger transportation, following an agreement signed with the Kerala Hydrogen Valley Innovation Cluster Foundation in February 2026. Odisha is similarly planning for hydrogen-powered urban transport through a collaborative initiative involving Capital Region Urban Transport (CRUT), NTPC Limited and Grid Corporation of Odisha Limited (GRIDCO). These initiatives show how green hydrogen is being positioned not just as a future fuel, but as a near-term industrial and transport solution.
Advancing biofuels: Turning waste into energy
Biofuels are emerging as an important component of India’s clean energy transition by converting agricultural residues, municipal waste and other forms of biomass into cleaner fuels. India has significantly expanded its ethanol-blended petrol programme. Measures include the expansion of feedstock sources beyond sugarcane, the introduction of an administered price mechanism for ethanol procurement, a GST reduction to 5 per cent on ethanol for blending and the amended Pradhan Mantri JI-VAN Yojana in 2024 to support advanced bioethanol projects using lignocellulosic biomass (such as agricultural/forestry residues and algae). The government aimed for higher ethanol blending in petrol, having achieved 20 per cent blending in 2025, with the aim of increasing blends in the long term.
Beyond ethanol, the National Bioenergy Programme promotes bioenergy and waste-to-energy (WtE) technologies to enhance energy security and sustainability. Biomass power plants in states such as Punjab, Uttar Pradesh and Tamil Nadu use agricultural residue to generate electricity. City-level WtE projects convert municipal waste into power or biogas. Several projects commissioned during 2026 demonstrate this transition from policy to implementation. In March 2026, Bengaluru inaugurated a 5 tonne per day (tpd) biomethanisation plant at Koramangala, while work continued on four additional decentralised biomethanisation facilities to process organic waste into biogas. In May 2026, VA Tech WABAG and PEAK Sustainable Energy commissioned a bio-CNG plant in Ghaziabad, Uttar Pradesh. In June 2026, the Hubballi-Dharwad WtE plant successfully completed trial operations, processing around 200 tpd of dry municipal waste into green coal (torrefied biomass).
Alongside these developments, CBG is emerging as another important component of India’s gas economy. Produced from agricultural waste, cattle dung and municipal organic waste, CBG has properties similar to CNG and can be supplied through existing gas infrastructure. The Sustainable Alternative Towards Affordable Transportation (SATAT) initiative is encouraging commercial production of CBG by creating assured markets through oil marketing companies.
Sustainable aviation and marine fuels
India is advancing sustainable fuels across the aviation and maritime sectors to decarbonise rapidly growing transport demand. The aviation sector is undertaking efforts to use SAF produced from waste oils, bio-feedstocks and power‑to‑liquid routes using green hydrogen. India has planned gradual SAF blending into existing aviation turbine fuel supplies to reduce life cycle emissions, while keeping current fleets operational. Key recent milestones include Indian Oil Corporation’s Panipat refinery receiving ISCC CORSIA certification in August 2025 and expected production of around 30,000 tpa via co‑processing of used cooking oil. In August 2025, Indian Oil and Air India signed an MoU to collaborate on domestic SAF supply for international flights. The Ministry of Civil Aviation and the International Civil Aviation Organization (ICAO) published the ACT‑SAF Feasibility Study in September 2025 to support indicative blending targets of 1 per cent by 2027, 2 per cent by 2028 and 5 per cent by 2030.
Maritime decarbonisation in India is advancing through multiple pathways. Biodiesel offers an immediate option for reducing emissions in coastal shipping, while battery-electric ferries are being deployed on short routes. Green methanol and green ammonia, produced from green hydrogen, are emerging as promising marine fuels, supported by pilot projects and planned bunkering infrastructure at major ports. Policy and pilot projects are accelerating the adoption of alternative marine fuels. Under the NGHM, India is implementing hydrogen-based shipping pilots to evaluate the use of hydrogen-powered vessels and related bunkering infrastructure. Demonstration projects are also testing biodiesel and hydrotreated vegetable oil (HVO) as drop-in fuels for coastal shipping, while major ports are assessing the feasibility of developing green methanol and green ammonia bunkering facilities. Alongside these fuel initiatives, ports are introducing shore power (cold ironing) to reduce fuel consumption and emissions from berthed vessels, complementing the transition to cleaner marine fuels.
Policies, goals and road maps
India’s emerging fuel landscape is supported by a coherent set of policies. The National Renewable Energy Policy encourages renewable capacity addition, hybrid projects and storage. The NGHM provides a comprehensive framework for the green hydrogen ecosystem. The National Bioenergy Programme boosts biofuels and WtE. The Electricity Amendment Bill and schemes such as the Ujwal discom Assurance Yojana aim to improve grid stability, distribution efficiency and renewable integration.
The government has set clear goals of 500 GW of non-fossil capacity by 2030, reduce the emissions intensity of GDP by 45 per cent by 2030 compared with 2005 levels, net zero emissions by 2070, 20 per cent ethanol blending in petrol over the next decade and 5 million metric tonnes (mmt) of green hydrogen production by 2030. Some of the recent initiatives are renewable tenders with hybrid/storage/round-the-clock options to ensure grid stability, incentives for electrolyser manufacturing and green hydrogen production, expansion of feedstock for ethanol and advanced biofuels, and development of renewable corridors and green hydrogen hubs.
Future outlook
India’s energy transition is entering a new phase in which the focus is shifting from expanding renewable electricity to building an integrated clean fuel ecosystem. Over the coming decade, green hydrogen, SAF, biofuels, CBG, green methanol and green ammonia are expected to move from pilot projects to commercial deployment across industries that are difficult to electrify, including steel, refining, aviation, shipping and heavy transport. Achieving this transition will require scaling up domestic manufacturing of electrolysers, biofuel and SAF production facilities, storage and transport infrastructure, bunkering networks and supportive market mechanisms. Continued policy support and private investment will be crucial for ensuring that the fuels become commercially competitive. These alternatives will gradually complement India’s existing energy mix, improving energy security, reducing import dependence and lowering emissions.
Himanshu Tagore and Vaishnavi
