India’s Green Hydrogen Policy

Climate change and net-zero commitment are accelerating the shift from fossil fuel to alternatives, such as clean energy. India's Nationally Determined Contribution (NDC) under the Paris Agreement for the period 2021-2030 includes a reduction in the emission intensity of its GDP by 33 to 35 per cent by 2030 from 2005 levels and the achievement of about 40 per cent cumulative electric power installed capacity from non-fossil fuel-based energy by 2030 with the help of the transfer of technology and low-cost international finance.

India has one of the highest rates of growth for renewable energy in the world. As per the Global Trends in Renewable Energy Investment 2020 report, during the period 2014-2019, renewable energy programs and projects in India attracted an investment of $ 64.2 Bn (INR 4.7 lakh crore). The country has achieved a cumulative installed renewable energy capacity of 92.54 GW out of which 5.47 GW was added in the period between April 2020 and January 2021. Globally, today India stands 4th in RE power capacity, wind power, and solar power capacity.

A new report from the International Renewable Energy Agency (IRENA) highlights that hydrogen is increasingly seen as an important element in the energy transition to decarbonize harder-to-abate sectors. Hydrogen could account for up to 12 per cent of global energy use by 2050, leading to a rise in new energy superpowers. It is likely to influence the geography of energy trade, further regionalizing energy relations. 

On 17th February 2022, the Government of India unveiled India’s New Green Hydrogen Policy under the National Hydrogen Mission. The mission aims to aid the government in meeting its climate target and making India a green hydrogen hub. There is an increased consensus around the world that concerted steps need to be taken to reduce global warming to levels less than 2o C and if possible, to cap it at 1.5o C higher than pre-industrial levels. Transition to Green Hydrogen and Green Ammonia is one of the major requirements for the reduction of emissions. Hydrogen as an energy carrier has a vital role in the diversification of renewable energy across key economic sectors, by increasing the share of renewable energy in the electricity mix, enabling clean transportation, and decarbonizing industries like fertilizers, chemicals, petrochemicals, iron, and steel. 

Setting the right priorities for hydrogen use will be essential for its rapid scale-up and long-term contribution to decarbonization efforts. Hydrogen is part of a much bigger energy transition picture, and its development and deployment strategies should not be considered in isolation. A shift to large-scale use of hydrogen fuel can help bolster India’s geopolitical heft and support energy security. More than 30 countries and regions have hydrogen strategies that include import or export plans, indicating that cross-border hydrogen trade is set to grow considerably. Some of the prominent industrial mammoths such as Reliance Industries Limited, GAIL, NTPC, Indian Oil Corp, and L&T plan to foray into the green hydrogen space. RIL plans to become a net-carbon zero firm by 2035 and invest nearly INR 750 Bn over the next 3 years in RE. India has declared its ambition to become an exporter of hydrogen to Japan, South Korea, and Europe.

Challenges for Commercialization of Green Hydrogen

The main challenge in transitioning to green hydrogen is to make it economically competitive and commercially viable. The current challenges for the commercialization of green hydrogen across the four phases: production, storage, transport, distribution, and end-use. 

Production: Electrolyzer used to split hydrogen atoms from oxygen is expensive and the efficiency of this process is around 60-80 percent by calorific value. Hence in order to commercialize, there is a need for improvement in overall efficiency and requires a sizeable investment of infrastructure.

Storage: Hydrogen used in the fuel cells is a very flammable gas and can cause an explosion if it is not handled properly. Low durability of material (fiber, metal, polymer) for storage can result in potential chemical reactions and raise safety concerns. 
Transport and Distribution: There is a need to expand the hydrogen transportation pipeline infrastructure to meet future demand. The network of hydrogen refueling stations has to be increased. 

End-use: Efficiency, durability issue, resiliency, and current densities of fuel cells need improvement. User acceptance and social awareness need to be created and after sale-service for hydrogen, technology has been developed.

Nevertheless, the 2020s’ could become the era of a big race for technology leadership. The geopolitics of clean hydrogen is likely to play out in several stages. Green hydrogen is projected to start competing with blue on the cost by the end of this decade. This seems likely to occur sooner in countries such as China (thanks to its low-cost electrolysers), or Brazil and India (with cheap renewables and relatively high gas prices). 

This article is co-authored by Vishakha Bhagwat and Karishma Sharma.