Asia’s race to decarbonise is intensifying. Japan, an energy-importing giant, has set ambitious targets — 3 million tonnes of clean ammonia by 2030 and 12 million tonnes by 2040 — to power its transition away from fossil fuels. India, with its vast renewable potential and cost advantage, seems like the perfect partner. Yet, despite years of dialogue and a handful of corporate memoranda of understanding , progress remains sluggish.
The question is not whether collaboration makes sense — it does. The question is: why aren’t we moving faster?
The signing of the Japan-India Joint Crediting Mechanism (JCM) in August 2025 could be the catalyst needed. This framework offers three powerful levers:
Technology Transfer: Japan’s expertise in low-carbon innovation can accelerate India’s green hydrogen and ammonia production.
Finance: With $600 million already committed by JBIC and other institutions, Japan can make financially challenging projects viable.
Carbon Credit Trading: India can generate Internationally Transferred Mitigation Outcomes (ITMOs), which Japan can use toward its climate targets, which is a win-win for both nations.
But frameworks alone don’t deliver results. What’s missing is a structured, government-led roadmap backed by industry action.
Despite strong intent, the India–Japan green fuel partnership suffers from three gaps: technology, finance, and policy alignment.
Technology: Ammonia co-firing in thermal plants — a cornerstone of Japan’s decarbonisation plan — is proving harder than expected. Technical challenges around nitrogen oxides emissions and combustion efficiency persist. Japan’s R&D leadership can help India overcome these hurdles through joint pilots and knowledge-sharing platforms.
Finance: Cost remains the biggest barrier. Green hydrogen currently costs $4-$6 per kilogramme, translating to ammonia prices near $1,000 per tonne — around 50 per cent higher than coal-based power generation for a 10 per cent blend. Japan can provide low-cost financing to bring down production costs. A dedicated India-Japan Green Fuel Fund, structured as a sovereign-to-sovereign arrangement, could pool resources and de-risk investments. JBIC’s recent ¥120 billion green financing deal with India’s Power Finance Corporation shows the appetite for such collaboration.
Policy & bilateral projects: Governments can facilitate special economic zone-like clusters for green fuel production and bunkering infrastructure. A joint ammonia bunkering pilot, modelled on Singapore’s approach, could serve as proof of concept for shipping decarbonisation. Singapore is already piloting ammonia bunkering at Jurong Island with a 100,000-tonne capacity facility — India and Japan should not fall behind.
India’s Solar Energy Corporation of India Ltd (SECI)-led green ammonia tender successfully aggregated demand from fertiliser companies and matched it with supply. Building on this model, SECI could also aggregate supply from Indian producers, while Japan could replicate the approach under its Ministry of Economy, Trade and Industry by creating an aggregator to consolidate demand from industries and smaller players. This would ensure bankable offtake agreements and provide the scale needed for a robust bilateral green fuel market.
If the ultimate goal is decarbonisation, Japan must prioritise real carbon-abatement costs over symbolic measures such as low-impact co-firing. Lifecycle emissions, including upstream methane leakage, should guide procurement decisions. Contracts-for-difference (CfDs), verified Guarantees of Origin, and strict lifecycle thresholds will make this partnership credible and future-proof.
There are three major strategic advantages of the India-Japan Green Hydrogen Corridor. The first is a bankable supply: India’s rapid renewable build-out and competitive PPAs enable long-term green hydrogen/ammonia offtake at globally competitive prices (approximately $140 per tonne of carbon dioxide abatement by 2025).
The second is policy alignment. Green-first procurement aligns with Japan’s tightening lifecycle standards and corporate net-zero targets while hedging LNG price volatility. The last is scalability and modularity. Electrolyser projects can scale incrementally, avoiding the high-risk “mega-project” model of blue hydrogen.
So, what actions can India take? Here are some of them.
Adopt abatement-cost-based evaluation (US$/t CO₂) for hydrogen tenders, including upstream methane emissions.
Set tightening lifecycle thresholds (≤2 kg CO₂e/kg H₂ by 2030; <1 kg by 2035), with premium scoring for renewable hydrogen.
Require verified Guarantees of Origin and third-party methane accounting; exclude pathways with unverified leakage assumptions.
Prioritise hydrogen for hard-to-abate sectors (steel, chemicals, shipping) over low-impact power co-firing.
Asia cannot afford another decade of missed opportunities. The pieces of the puzzle like technology, finance, policy are already on the table. What is needed now is urgency and vision. If India and Japan act decisively, they can lead the region’s green energy revolution and set a global benchmark for climate collaboration.
Pratha Jhawar is Lead - APAC Business Development & Partnerships at ReNew
Views expressed are personal and do not necessarily reflect those of the organisation or Down To Earth