ICCK

The government is looking at a demand to amend a rule that prevents renewable energy plants set up for captive consumption in Special Economic Zones (SEZs) from receiving tax breaks. The tweak, which is before the Ministry of Commerce, could potentially allow export-oriented green hydrogen projects to avail fiscal benefits for setting up and operating renewable energy plants used for the production of green hydrogen. The commerce ministry is also looking at notifying SEZs that can be spread out across multiple locations, specifically for green hydrogen projects. These suggestions were made by green hydrogen developers at a meeting on October 19 with the Ministry of New and Renewable Energy (MNRE), where officials from the Ministry of Commerce were also present, according to the meeting minutes accessed by The Indian Express through the RTI.

Allowing multi-locational SEZs will enable developers to use wind energy for which turbines are placed at a considerable distance from each other. Currently, SEZs must have a contiguous land area of 50 hectares or more, a requirement the commerce ministry is open to relaxing for green hydrogen projects. As per industry estimates, the distance between two wind turbines could be anywhere between 250 metres to 400 metres apart, depending on their size. Without multi-locational SEZs, export-oriented green hydrogen projects using wind energy could face difficulties in securing vast amounts of land for renewable energy generation alone. With multi-locational SEZs, however, they will be able to designate specific and discontiguous patches of land upon which wind turbines are installed as part of a singular SEZ.