A recent study by CareEdge Ratings highlighted the cost challenges hindering the widespread adoption of green hydrogen (GH2) in India. While the momentum of GH2 is expected to be fueled by lower renewable energy costs and the country's decarbonisation objectives, the prevailing levelised cost of green hydrogen is significantly higher than that of grey and brown hydrogen. The study identifies the low volumetric energy density of GH2 as a factor contributing to increased storage and transportation costs. Additionally, the high capital expenditure required for establishing GH2 plants poses a major constraint, with approximately Rs 2.4 lakh crore needed for a one million metric tonne plant. The demand drivers for GH2 are segmented into near-term, medium-term, and long-term categories. In the near-term, the focus is on transitioning existing grey hydrogen users to GH2, while the medium-term targets include industrial applications like green steel and blending GH2 in city gas distribution networks. Long-term prospects involve GH2 utilization in transportation, shipping, and auxiliary power generation. The report suggests that establishing manufacturing clusters of GH2 closer to consumption centers could mitigate transportation cost risks. To enhance cost viability, the report emphasizes the necessity of reducing electrolyser costs, enhancing efficiency, and continuous policy backing to achieve a target price of around USD 2.1 per kg of GH2. Addressing the absence of long-term off-take agreements for GH2 is crucial, as it impacts developers and lenders. Encouraging downstream users to prefer GH2 over other alternatives is seen as pivotal for a gradual shift towards GH2 adoption. Refineries are identified as potential early adopters of GH2, with an estimated demand of 2.70-3.00 million metric tonnes over the period from FY27 to FY30, as highlighted by Hardik Shah, Director of CareEdge Ratings.