Green Hydrogen Policy in India

Green Hydrogen Market India

As a first step toward the National Hydrogen Mission, the Indian government announced the first phase of its Green Hydrogen Policy in early 2022. The mission’s goal is to turn India into a green hydrogen hub that will assist the country reach its climate goals. It aims to produce five million metric tonnes per annum of green hydrogen by 2030 and develop renewable energy capacity in the process.

Hydrogen and ammonia are expected to be the future fuels, and producing them with renewable energy is one of the most important criteria for long-term energy security and a decline in fossil fuel imports.

What is Green Hydrogen?

Green hydrogen is created by breaking water into hydrogen and oxygen using green energy in an electrolyser. Hydrogen produced can be mixed with nitrogen to form ammonia, bypassing the hydrocarbons in the manufacturing process. Green ammonia can be used to store energy and to make fertilizer.

Carbon Neutrality India’s Green Ambition

The launch of India’s Green Hydrogen Policy comes after the country vowed to become carbon-neutral by 2070 during the COP-26 summit in Glasgow last year.

The drive for energy security becomes even more critical, especially when the current European crisis has pushed up energy prices worldwide, particularly in India, which largely depends on imports of oil and natural gas for its needs.

The policy includes several rewards to entice investors to participate in green hydrogen and green ammonia development:

  • Green hydrogen or ammonia producers can buy renewable energy from a power exchange or build renewable energy capacity themselves or through any other developer.
  • Open access is to be given within 15 days after receiving the application.
  • The green hydrogen or ammonia producer can bank unused renewable energy with the distribution firm for up to 30 days and retrieve it when needed.
  • Manufacturers of green hydrogen and ammonia will be granted a 25-year waiver of inter-state transmission tariffs for projects completed by June 30, 2025.
  • Manufacturers of green hydrogen or ammonia and renewable power facilities will be granted special access to the grid to avoid any administrative delays.
  • The incentive of the Renewable Purchase Obligation will be offered as a reward to hydrogen/ammonia manufacturers and distribution licensees who use renewable energy.
  • To enhance trade facilitation, the Ministry of Renewable Energy would establish a single platform for carrying out all activities, including statutory permissions, in a timely manner.
  • Green hydrogen or green ammonia manufacturers will be permitted to construct bunkers near ports to store green ammonia for export or usage by shipping. The Port Authorities will sanction land for storage at a cost.

Challenges in Green Hydrogen Market in India

In today’s times, India’s hydrogen demand stands at 6.7 million tonnes (MT), with the need expected to double by 2030. It is mainly used as process fuel in oil refineries, fertilizer plants, and steel mills to generate finished goods. It’s primarily grey hydrogen, which comes from fossil fuels like natural gas or naphtha that are presently used.

The cost of renewable electricity has dropped dramatically due to accelerated renewable power capacity deployment, making green hydrogen more practical. However, it is still too expensive to compete with grey hydrogen.

The policy’s incentives will help cut the cost of green hydrogen generation. Still, the fundamental difficulty will be to make it as economical as grey hydrogen, which is now four to six times cheaper.

However, even if central open access charges have been waived to bring down the costs, certain state open access charges persist that defeat the purpose of incentives. Effects must be coordinated to achieve the desired goals and bring a positive outlook towards policies.

Green Hydrogen Forecast in India

Following up on the initial policy initiatives, the government intends to implement a Green Hydrogen Consumption Obligation in petroleum refining and fertiliser manufacturing, along with the principles of the renewable purchase obligation. Refineries and fertiliser plants would be compelled to use 10% green hydrogen at first, gradually increasing to 20% to 25% in three to four years.

The regulation will encourage the use of green hydrogen production and help bring down its cost, and eventually reach parity with the cost of grey hydrogen. The cost of production can be further if electrolysers are made in India; the country is aiming for 15 Giga-watts of electrolyser capacity and proposing output-based incentives to encourage domestic production.

Presently, alkaline water electrolysis is employed, which uses more energy to produce hydrogen. In contrast, polymer electrolyte membrane electrolysis would reduce the electricity requirement, lowering the cost of hydrogen generation even more.

Significant Strides in Green Hydrogen

The policy is a critical first step in creating a hydrogen economy. It has attempted to solve some of the industry’s most pressing concerns, such as accessibility, grid financing, and a single-window approval process.

The initiative aims to use the country’s geography to manufacture low-cost green hydrogen or ammonia for export by boosting solar projects and lowering renewable energy generation prices. Germany and Japan might be important trading partners for India’s green hydrogen.

To facilitate the transition from grey to green hydrogen and to meet rising hydrogen demand, India will need to continue to invest in development, R&D initiatives, and pilot projects to help promote new technologies and bring down the cost of green hydrogen production.

Green Hydrogen Technology

Green hydrogen is hydrogen generated through electrolysis utilizing renewable energy. This approach uses an electrical charge to split hydrogen from oxygen in the water if the energy required for electrolysis is obtained from renewable energy sources like solar or wind, with no greenhouse gas emissions emitted.

Hydrogen has long been touted as the future fuel since it is plentiful, inexpensive, and clean-burning. However, due to hydrogen’s drawbacks, that future has never materialized. It’s difficult to transport, may corrode metal and also make it brittle, and is 20 times more combustible than petroleum.

Hydrogen produced without fossil fuel allows the world to achieve the net-zero emission goal. Several countries have set a deadline of the year 2050 to achieve zero carbon emission through a flurry of government initiatives.

As a result, hundreds of millions in investment capital and government assistance have flowed into the industry. This has intensified due to the rising acceptance of zero-emission vehicles.

Another method of producing hydrogen is by separating natural gas into hydrogen and carbon dioxide using either Steam Methane Reforming or Auto Thermal Reforming. The CO2 is caught and stored using a process called CCUS. This hydrogen is known as Blue hydrogen.

Since greenhouse gases are trapped in this process, the planet’s ecological impact is reduced. This sort of hydrogen is intrinsically fossil-fuel-based and is essentially a residue of natural gas production.

Green Hydrogen Production Process

Electrolysis is a viable method for producing carbon-free hydrogen from renewable energy sources. The process of splitting water into hydrogen and oxygen with electricity is known as electrolysis. An electrolyser is used to perform this process.

Electrolyzers can vary in size from tiny, component-sized apparatus well-suited for small-scale distributed hydrogen generation to sizable, centralized manufacturing facilities that can be directly coupled to renewable energy sources.

Electrolyzers, like fuel cells, have an anode and a cathode divided by an electrolyte. Because of the varied types of electrolyte material and ionic entities it conducts, different electrolyzers work differently. Below are the kinds of available electrolyzers.

  • Membrane Electrolysers using Polymer Electrolytes
  • Alkaline Electrolysers
  • Solid Oxide Electrolysers

Green Hydrogen Uses

In countries such as the United States, Russia, China, France, and Germany, hydrogen is used as a fuel. Others, such as Japan, plan to go a step further, aiming to establish a hydrogen economy. Considering green hydrogen could be used in many sectors, there are a proportionally significant number of businesses that could benefit from a growing hydrogen fuel economy.

The most noteworthy of these are the oil and gas companies, which are being increasingly pressurized to reduce carbon emissions.

Generator for electricity and potable water:

In a fuel cell, hydrogen and oxygen are combined to create these two components. This method has shown to be extremely valuable on space projects, for example, by equipping crews with sustainable water and electricity.

Storage of energy:

Compressed hydrogen tanks can store energy for lengthy periods and are lighter than lithium-ion batteries, making them easier to handle.

Mobility and transportation:

Hydrogen’s adaptability enables its employment in difficult-to-decarbonize consumption sectors such as bulky transport, aerospace, and water transportation. Several projects, including Hycarus and Cryoplane, are already ongoing in this field, with the European Union (EU) intending to integrate it into passenger planes.

  • Hydrogen fuel cell electric automobile.
  • Cargo ships propelled by hydrogen-based liquid ammonia
  • “Green steel” refineries utilize hydrogen instead of coal as a heat source.
  • Hydrogen-fuelled electrical turbines that can generate power during high demand periods to assist in stabilizing the system
  • A substitute for natural gas for domestic cooking and heating purposes.

Green Hydrogen in India

Indian government announced a “National Hydrogen Mission” on August 15, 2021, to make India a global hub for green hydrogen production and export. He emphasized ramping up energy self-reliance and empowering clean energy transition worldwide through green growth and green jobs.

Green Hydrogen is not only a healthier alternative to natural gas, but it’s also a good energy store, which makes it beneficial for balancing inconsistent solar and wind power. Natural gas, our limited hydropower supplies, and coal generators currently cover the void.

The government is offering various sops like an exemption for 25 years for producers of green hydrogen from paying the inter-state transmission charge on renewable energy purchased by projects and completed by June 30, 2025.

Green Hydrogen Companies in India Market

Reliance Industries

Reliance Industries has unveiled a plan to spend 75,000 crores in a new clean-energy sector over the next three years to satisfy the company’s commitment to be carbon-neutral by 2035.

GAIL

GAIL revealed last year that a global tender to procure an electrolyser capable of producing 4.5 tonnes of hydrogen per day had been rolled out. On a pilot basis, the company just began the first project of combining hydrogen in the natural gas system in Indore.

Indian Oil

At its Mathura refinery, the organization intends to establish India’s first green hydrogen plant. In addition, it has received preliminary clearance for 100 crore funding to establish green-hydrogen fuel facilities in Kochi and Thiruvananthapuram as a pilot project.

Larsen & Toubro

L&T has agreed to establish a plant in India utilising Norway-based electrolyser technology and manufacturer HydrogenPro AS. They plan to build a Giga-watt-scale production facility for alkaline water electrolysers using HydrogenPro technology.

It also partnered with ReNew Power, a Nasdaq-listed company, to build, own, implement, and oversee green hydrogen projects in India.

Adani Group

Adani Group aspires to become one of the world’s largest green-hydrogen producers, allowing India to become the world’s cheapest hydrogen producer. Over the next decade, the company plans to invest $20 billion in renewable energy generation.

Global Green Hydrogen Companies

Linde Gas

Linde is the most financially viable and market-leading industrial gas firm globally. They’re currently a member of the Hydrogen Council, which comprises several organizations investing in advancing hydrogen innovation.

In the mid-1970s, Linde began experimenting with hydrogen as a carbon-free fuel. Since then, they’ve become pioneers and leaders in the clean hydrogen transformation, with the world’s largest liquid hydrogen supply chain and competence.

Ballard Power Systems:

Ballard Power Systems is a Canadian company that develops and manufactures proton exchange membrane (PEM) hydrogen fuel cell technologies. It was formed in 1979 and involved in producing heavy-duty modules, maritime and permanent systems, and fuel cell stacks.

Ceres Power:

It is a company that specializes in engineering and fuel cell technologies. Ceres has been fostering collaborations with corporations like Bosch, Doosan, and Weichai to advance the development of low-carbon energy systems in the industry, data centres, transit, and everyday life.

Air Liquide

The French company Air Liquide was formed in 1902. After Linde, they’re the world’s second-largest industrial gas supplier by revenue, and they conduct business in more than 80 countries.

For more than 40 years, they’ve been working on hydrogen generation, storage, and distribution technologies. Their Blue Hydrogen program is dedicated to gradually decarbonizing hydrogen production for energy uses.

They have constantly been striving to produce at least half of the hydrogen required for various applications using carbon-free techniques based on renewable energy and water electrolysis.

Operational Green Hydrogen Projects

  • One of the world’s most significant green hydrogen projects is Air Liquide’s 20MW Bécancour facility in Quebec, Canada, which is fuelled by indigenous hydroelectric power and uses a PEM electrolyser supplied by US-based Company Cummins.
  • A 100MW green hydrogen plant will be built in Egypt by a collaboration consisting of several international firms. It is expected to be finished by November 2022.
  • Based in the United States, Plug Power will supply the project’s 100MW polymer electrolyte membrane electrolyser, which is expected to produce 90,000 tonnes of green ammonia per year. This will be the world’s most significant green hydrogen and green ammonia application when it starts up.
  • Green Hydrogen International (GHI), a US start-up, has announced a 60GW renewable hydrogen project in South Texas, which will be powered by wind and solar power and plan to produce clean propellant for Elon Musk’s SpaceX.

Plans of green hydrogen mission

Before the announcement, the government announced various plans to initiate green hydrogen mission. Some of them are listed below.
It includes listing of sectors to be expected to incorporate the use of green hydrogen.
Assuring cheap renewable resources with fee waivers announcing th project before 2025 to aid in the transition to reach net zero.
Emphasis has not only be laid on domestic things but also to make India globally strong and emerging as a hub and leader.
Agencies Reliance industries, Larsen and Turbos, JSW steel Jindal steel NTPC,BPCL and Indian oil corporation are some industries who have announced plans to set up green hydrogen units

What does this plant do?

This plant generates green hydrogen from electricity produced by solar plants. Green hydrogen and Green ammonia are the two gases produced by electrolysis of water using banked renewable energy, and hydrogen and ammonia produced from biomass.

India’s seriousness related to the project

This technology is used in India for the first time which will give way to commercial appliances of blended fuel. India has been taking steps to generate clean energy from green hydrogen gas to reduce the rate of carbon emissions. The announcement for policy is to achieve the country’s production ,target of 5 million tons of green and clean hydrogen by the end of the decade .

Various initiatives taken for this project

The Ministry of New-Renewable energy will set up a portal for clearance and permission required for the production, transportation, storage and distribution of green hydrogen.

Oil India mission(Assam) has taken the first step towards green hydrogen economy commissioning India’s first 99.99% pure green hydrogen plant with an installed capacity of 10kg per day at its Jorhat Pump station in Assam.

In February, this year, the gas authority of India invited bids for consultant to conduct fruitful study to set up a green hydrogen project in Odisha.
Last November the Indian oil corporation issued an international tender inviting stake holders to develop green hydrogen production facilities on build own and operate basis (BOO) at IOCL’S refineries in UP and Haryana.

In order to fulfil this mission, bunkers have been set up near ports for making export easy ,it will be a key policy starting to develop the port infrastructure.

MNRE has been with (R&D)programme on Hydrogen Energy and Fuel with respect to transportation, major work has been supported to Banaras Hindu University, IIT Delhi, Mahindra and Mahindra. This has developed internal combustion engines, two wheelers, three wheelers and mini buses that turn on hydrogen fuels. Two hydrogen refuelling stations have been established at Faridabad and Guru gram.

Largest hydrogen fuel cell companies

Largest hydrogen fuel cell companies recognized by market cap are listed below.

  • Plug Power/ Plug- $10.56 B
  • Nikola 2NKLA- $ 2.80 B
  • Doosan Fuel cell 3336260KS – $ 2.62 B
  • Ballard Power Systems 4BLDP- $ 2.18B 

N.H.E.R.M. Program

The N.H.E.R.M. is a program initiated by the NHE Board in 2023 is approved in 2006 for bridging the technological gaps in different areas of hydrogen energy including production, application, codes and standard, capacity building for the period upto 2020.

The project reduces India’s dependency on petroleum products. It helps in promoting the use of diverse, domestic and sustainable new and renewable energy sources. This will also provide electricity to remote and rural areas. The reliability and efficiency of electricity generation would also be increased with the completion of this project.

IPHE Initiative

The IPHE (International Partnership for Hydrogen and Fuel Cells in the Economy) formed in 2003 is an international partnership consisting of 21 members countries and European commission. Mission is to clean and produce efficient energy and have good mobility system using hydrogen fuel cell technology across applications and sectors.

Grey, Black and brown Hydrogen

Hydrogen from hydrocarbons( natural gas, fossil fuels) is call grey hydrogen. This is a common method of producing hydrogen today. It produces carbon dioxide as a by product. Black/ brown hydrogen is the oldest method of producing hydrogen and it involves transforming coal into gas.

Frequently Asked Questions (FAQ’s)

1. When was the National Hydrogen Mission started?

National Hydrogen Mission was announced on 15 August, 2021 by honourable prime minister of India.

2. What is the budget set for National Hydrogen Mission?

The Government of India has set Rs. 25 Crore budget in Union Budget 2021-22 for the accomplishment of this mission.

3. Why is National Hydrogen Mission initiated?

The main reason of initiating the National Hydrogen Mission is to be climate friendly and encourage the use and establishment of  renewable resources.

4. Who will produce green hydrogen in India?

Indian Oil Corporation have collaborated with two private companies to launch a joint venture to develop green hydrogen.

5. Where will India’s first green hydrogen plant be installed?

Oil India Limited (OIL) will install 99.999% pure green hydrogen plant in Assam.

6. Why is hydrogen considered so important and termed as the future of EU?

Green hydrogen is a clean hydrogen due to which it is termed as a future fuel of the EU. This fuel is regarded as very promising and effective as it is hoped to deliver abundance of carbon-neutral energy by 2030.

7. National Hydrogen Mission is overlooked by which ministry?

National Hydrogen Mission is overlooked by the Ministry of New and Renewable Energy, Government of India.

8.What is the cost of 1kg of Hydrogen in India?

Currently the cost of green hydrogen is between Rs. 320 to Rs. 330 per kilogram but the government aims to half this cost and range it between Rs.160 to Rs.170 per kilogram by 2030 by installing more hydrogen power plants.

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One thought on “Green Hydrogen Policy in India

  1. Excellent study and detail inputs to cover overall business case. Seeing market demand of green hydrogen to encourage, medium level player, some more policy incentives to be impose by government.

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