India aims to produce at least 5 MMT of green hydrogen by 2030, attract billions dollar worth of investment and create lakhs of jobs under its green hydrogen mission

In the world, urgency to fight climate change is driving many countries towards green and sustainable energy sources. India has always been proactive in its commitment to climate change and is setting bold goals for renewable energy use.

At the UN Climate Summit COP26 in Glasgow on November 1, 2021, Prime Minister Narendra Modi announced that India would achieve net zero emissions by 2070. In pursuance of this ambitious goal, groundwork is being laid to scale up important technologies for clean energy sources, including green hydrogen.

Green hydrogen and energy security

Green hydrogen can serve the dual purpose of enhancing energy security as well as contributing to the development of a self-reliant low-carbon economic pathway. Further, it will enable the utilization of domestically abundant renewable energy resources across regions, seasons, and sectors, feeding multiple usage streams, either as a fuel or as an industrial feedstock.

Many major economies have declared hydrogen strategies as part of the broader climate and clean energy-related actions. India has also announced the National Hydrogen Mission (NHM) in 2021 with the objective of meeting mitigation goals as well as making the country an export hub for green hydrogen and green ammonia.

The mission aims to achieve the production of 5 MMT (Million Metric Tons) of green hydrogen by 2030 and the related development of renewable energy capacity required. It will support the replacement of fossil fuels and fossil fuel-based feedstock with renewable fuels and feedstock based on green hydrogen.

According to the Ministry of New and Renewable Energy, around 5 MMT of grey hydrogen is consumed annually in India and of this, 99% is utilized for various industrial purposes like petroleum refining, manufacturing of ammonia for fertilizers, methanol production, treatment and production of metals. Most of this hydrogen is currently sourced from fossil fuels such as natural gas and naphtha.

Pilot projects have been undertaken in India for the production of green hydrogen through the electrolysis of water using renewable electricity, and from biomass through thermochemical and biochemical routes. Low-cost renewable energy generation potential may make green hydrogen the most competitive form of hydrogen in the long run.

India could potentially be one of the most competitive producers of green hydrogen in the world. Despite the unique possibilities and advantages, unfavorable cost economics, supply challenge, and costly enabling infrastructure have thus far held back the replacement of fossil fuel-based feedstock with green hydrogen.

Green hydrogen and its cost-competitiveness

The costs of electrolyser and input renewable energy are the two major components of green hydrogen production cost. However, with technology advancements, especially reduction in costs of renewable energy and electrolysers and aggressive national strategies, green hydrogen is likely to become cost-competitive. The global commercial electrolyser manufacturing capacity is estimated to increase from the current about 2-4 GW/annum to over 200 GW by 2030 owing to deployment goals announced by various national governments and industrial organizations across the globe.

NHM proposes to develop a robust electrolyser manufacturing ecosystem to boost domestic manufacturing of electrolysers at significantly lower costs to reduce import dependence and ensure competitiveness in the global market.

The proposed decentralized green hydrogen production will be advantageous in reducing the requirement of its transportation for end-use. It will also allow for the optimal utilization of various resources such as land, water, and renewable energy potential. To optimize water requirements, the use of industrial or municipal wastewater for hydrogen production is emphasized.

India is also piloting various low-cost technology pathways, including biomass gasification and reformation of biogas for achieving scale. These pathways can provide continuous hydrogen output which would enhance the feasibility of hydrogen use for many end-use applications.

Considering the green hydrogen market at a nascent stage of development, India has adopted a phase wise approach. Phase-1 (2022-23 to 2025-26) will focus on creating demand while enabling adequate supply by increasing the domestic electrolyser manufacturing capacity.

Phase-II (2026-27 to 2029-30) will allow for accelerated growth in production. It is expected that by this time costs of green hydrogen will become competitive with fossil fuel-based alternatives in the refinery and fertilizer sector.

Depending upon the evolution of costs and market demand, commercial-scale green hydrogen-based projects in steel, mobility, shipping, and other potential sectors such as railway, aviation, etc. will be explored. Research and Development (R&D) activities will be scaled up for the continuous development of products.

Way forward to successful hydrogen mission

India has adopted an integrated mission strategy under which all concerned ministries, departments, agencies, and institutions of the central and state governments will undertake focused and coordinated steps to ensure the successful achievement of the mission. Tasks for each ministry are clearly identified.

The Ministry of New and Renewable Energy (MNRE) will be responsible for the overall coordination and implementation of the mission. State governments and state agencies will also play an integral role in the development of a green hydrogen ecosystem.

India would become a global leader in the hydrogen energy ecosystem with proper policy support, industry action, market generation, and acceptance. It can position itself as a low-cost, zero-carbon manufacturing hub, at the same time fulfilling its goal of economic development and job creation.

*** Dr. Ashutosh Sharma has over 10-year experience in the field of energy access and Dr. Chandrashekhar Singh’s research focuses on energy access and fossil fuel subsidies reform; views expressed in the article are their own.