NEW DELHI - India plans to force refineries and fertiliser plants to use some green hydrogen, junior oil minister Rameswar Teli said on Monday, as Asia's third-largest economy strives to reduce carbon emissions.

Governments and energy companies around the world are betting on clean hydrogen playing a leading role in efforts to lower greenhouse gas emissions, though its future uses and costs remain uncertain.

India's draft hydrogen policy will mandate a gradual increase in the use of green hydrogen instead of fossil fuels in refineries and fertiliser plants, Teli told lawmakers in a written reply to questions.

He did not give details, but noted green hydrogen is yet to be produced in India on a commercial scale due to the high cost of production.

Green hydrogen is a zero-carbon fuel made by electrolysis, using renewable power from wind and solar to split water into hydrogen and oxygen.

Power minister R. K. Singh told lawmakers last week that the draft National Hydrogen Mission policy, prepared by the Ministry of New and Renewable Energy, was under ministerial consultation.

The policy aims to boost green hydrogen production and its use across multiple sectors, including transportation, he said.

India is already encouraging the use of hydrogen as a transport fuel, with some buses running on hydrogen blended fuel on a trial basis. Last week, Indian Railways invited bids to explore if diesel-fuel trains could operate using hydrogen.

Fertiliser minister Mansukh Mandaviya said last month the use of green hydrogen would cut imports of ammonia and natural gas required for fertiliser production.

The draft policy wants green hydrogen to account for 10% of the overall hydrogen needs of refiners from 2023/24, rising to 25% in five years, a government source said. The respective requirements for the fertiliser sector are 5% and 20%, he added.

India is raising its renewable energy capacity, currently 92.97 gigawatts (GW), to meet about two-fifth of its electricity needs by 2030 under the Paris climate accord, compared with 36.7% currently.

It wants to raise renewable energy capacity to 175 GW by 2022 and 450 GW by 2030.

India's top refiner Indian Oil Corp IOC , top power utility NTPC Ltd and conglomerates including Reliance and Adani have announced plans to build green hydrogen projects.

(Reporting by Nidhi Verma Editing by Mark Potter) ((; +91 11 49548031; Reuters Messaging: