The year 2025 marked a major policy turning point for India’s energy sector. The country made a considerable leap in its clean energy commitments, which influenced the regulatory environment of EPC (Engineering Procurement Construction) companies to be one of the fastest in recent years. The year 2025 witnessed localization, quality control, compliance, and the speedy development of new technology, such as hydrogen, ammonia, desalination, and carbon capture projects, as the major drivers of EPC companies’ changes in behavior. India’s large-scale clean energy deployment is to be followed up by the behaviour of EPC companies in 2025 as a preview of the sector’s capacity in 2026.
The Importance Of The 2025 Policy Shifts
The policies introduced and refined throughout 2025, spanning green hydrogen, ammonia, desalination, CCUS, localization requirements, and compliance norms, directly shaped the timelines, design approaches, and investment decisions driving India’s next generation of clean-energy assets. The EPC, the actual constructors of the policy, were to interpret and act on the changes of rules regarding hydrogen blending, domestic manufacturing, water sourcing, CCUS deployment, and ESG-linked financing.
The period of transition was beneficial to developers and regulators as well as investors, since it provided a clear picture of where the future incentives would be and where, in terms of risks and the project would have to go through more difficulties. Therefore, it was of utmost importance to know how the EPC players reacted.
Main Policy Changes EPC Firms Handled in 2025
1. Domestic Manufacturing and Local Value Addition
The engagement in the localization of India was hugely boosted, and the ratio was very high. The number of necessary components like electrolyzers, pressure vessels, modular skids, and hydrogen storage units that had to come from local sources gradually transformed the activity of EPC companies into a procurement strategizing, new Indian vendor qualifying, and fabrication capacity expanding process. The move was not only regulatory, but it also brought about a restructuring of the supply chain of India’s industrial sector.
2. Hydrogen and Ammonia Policy Updates
2025 was the year when green hydrogen blending really took off, as well as the port-based clean-fuel hubs, and even the storage and transport norms. The approval timelines at ports and industrial corridors were cut short, thus helping EPC companies move faster from the stage of concept to that of execution. Most importantly, the policy direction left no room for ambiguity as it was switched from pilot-based thinking to commercially scalable hydrogen and ammonia facilities. EPC players were forced to map out integrated, long-term, export-ready systems.
3. Water, Desalination, and Coastal Regulations
Coastal hydrogen and ammonia projects called for new regulations related to water sourcing, desalination, and brine discharge. The tightening of environmental permits required the EPC contractors to include the desalination and waste management systems during the design processes. The transition forced the companies to think about the water infrastructure in a more holistic way rather than considering it as an afterthought.
4. CCUS Emerged as a Short-Term Opportunity
Roadmaps and early-incentive proposals turned carbon capture and utilization into a near-term priority. Industrial clusters were motivated to investigate the capture, purification, and utilization paths, especially in the cases of refineries, cement plants, and fertilizer units. EPC companies were to create modular capture systems, pre-plant integration strategies for brownfield plants, and establish utilization connections, as this indicated a major strategic shift.
5. Financing, Compliance, and ESG Expectations Tightened
Before approving any new industrial or clean energy projects, lenders conducted a stricter ESG screening. Emissions, water consumption, and safety performance disclosure cycles became more frequent. Thus, the EPC companies invested in digital tools, analytics dashboards, and automated QA/QC systems to cope with the increasing compliance burden.
What Policies Will Matter Most In 2026
1. Green Hydrogen & Ammonia Incentives (Phase II)
Targeted support for production, storage, conversion of ammonia, and hydrogen corridors will be among the things that the next policy phase is going to indicate. The domestic deployment and the export potential will both be affected by the clearer rules.
2. Carbon Capture (CCUS) Framework
A national policy in this area is likely to be introduced, which would cover rules on storage, monitoring, liability, and the use of CO₂ in the industry. Companies that provide engineering, procurement, and construction services (EPC) are gearing up for the implementation of the pilot projects on the commercial scale in the areas of refineries, fertilizer production, and the cement industry.
3. Renewable and Industrial Integration Norms
The integration of solar, wind, hydrogen, ammonia, and desalination products will have to be well defined. In addition to that, the long-term open access for renewable supply will also play an important role in determining the project economics.
4. Localisation & Advanced Quality Standards
The Indian market is going to be demanding higher quality and safety standards in pressure systems, hydrogen storage, modular skids, and welding, as well as certification of fabrication and safety systems. This will have a major impact on the selection of suppliers and the design of projects.
5. Financing & Tax Pathways for Clean Infrastructure
New clarity on revenue gap funding, fast depreciation, combined finance, and reduced interest rates may lead to the adoption of clean-energy EPC projects throughout the country.
Looking Ahead: 2025 Was the Reset, 2026 Will Be the Scale-Up
In a way, 2025 compelled EPC firms to redevelop their supply networks, compliance administration, and the entire model of execution. In 2026, they will expand them, as with the expected clearer policies and the sharper incentives, the organizations that made early investments in modular execution, domestic manufacturing, integrated planning, and digital quality controls will lead the way.
As India transitions to a critical stage of clean-energy development, EPC companies will still be the ones granting policy vision, transforming it into a sustainable industrial reality. |
