(Bloomberg) -- India is studying plans to issue a tender for about half a million tons of green ammonia to spur emissions reduction in hard-to-decarbonize sectors like fertilizer production.

Talks are taking place between fertilizer manufacturers and the country’s renewable energy ministry to assess potential demand for the feedstock, Bhupinder Singh Bhalla, the department’s top bureaucrat, said in an interview. 

Successful bidders would be offered incentives to help drive down costs of clean ammonia, which is produced using emissions-free green hydrogen and can be an alternative to natural gas for fertilizer firms. 

“The number is not final yet, but we may be looking at perhaps around half a million tons of green ammonia,” to begin with, according to Bhalla. A small initial tender would offer lessons for future development of the sector, he said.

Read more: India Clears $2.4 Billion Green Hydrogen Aid as It Eyes Exports

Prime Minister Narendra Modi’s government is aiming to use green hydrogen, created using renewable energy, to clean up heavily polluting sectors including fertilizers, oil refineries and steel as the nation works to hit net zero by 2070. Using clean hydrogen is also intended to help reduce reliance on energy imports.

India produced about 15 million tons of ammonia in the year through March 2021, mostly using hydrogen from natural gas, and imported about 2.6 million tons of the material, according to a note published by industry body Fertilizer Association of India.  

The renewables ministry is also in talks over adopting cleaner alternatives with other hydrogen consumers, including oil refiners, who need the gas to remove sulfur from fuels like diesel.

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