The global energy landscape is experiencing a significant transformation as it shifts towards sustainable and economically viable alternatives, with green hydrogen (GH) emerging as a crucial player. GH, an adaptable energy carrier produced using renewable energy sources, has diverse applications, spanning from transportation to industrial processes. It offers a viable route to decarbonize sectors that pose challenges for electrification. In this evolving scenario, India is positioning itself as a prominent participant in the GH arena.
The Government of India has recently introduced two pivotal initiatives, namely the GH Standard and the National GH Mission. The GH Standard defines a minimum standard for GH, specifying a well-to-gate emission of not more than 2 kg CO2 equivalent per kg of H2 produced. It encompasses various processes, including water treatment, electrolysis, gas purification, drying, and hydrogen compression. The National GH Mission, an integral component of India’s GH roadmap, aims to incentivize commercial GH production, with the goal of establishing India as a global GH hub. This mission targets sectors where direct electrification faces challenges, such as heavy-duty transport and industry. Among the various schemes introduced under this mission, financial incentives are provided for domestic electrolyzer and GH production.
The economic implications of these initiatives are profound. Reports suggest that the cost of GH production could witness a 50% reduction by 2030, primarily due to the continuous development of production infrastructure, thereby making GH a cost-competitive alternative to natural gas. Furthermore, the demand for hydrogen in India could potentially quadruple by 2050, accounting for nearly 10% of the global demand.
In terms of long-term feasibility, considering India’s abundant renewable resources, the country has the potential to become a significant exporter of GH. India stands to gain a lucrative export opportunity as the global market for GH exports is forecasted to achieve a valuation of $300 billion by 2050.
Beyond energy production, GH offers direct benefits in the decarbonization of industrial processes. GH applications in industrial sectors like steel, cement, and chemicals have the potential to revolutionize production methodologies. For instance, GH can serve as a reducing agent in steel production, eliminating the need for carbon-intensive coke. This not only reduces greenhouse gas emissions but also reduces long-term operational costs for industries. Additionally, GH could significantly reduce India’s heavy reliance on oil imports, enhancing the nation’s energy security.
Global GH initiatives offer valuable lessons for India. The United States (US) has introduced tax credits to make GH more affordable, offering up to $3 per kilogram for low-carbon variants. In the European Union (EU), regulatory changes aim to simplify GH production regulations, making it easier for GH projects to take off. Australia has allocated A$2 billion for its Hydrogen Headstart program, focusing on research and commercialization, and plans to introduce a certification scheme to verify GH production. These initiatives in the US, EU, and Australia collectively demonstrate a concerted effort to boost the GH sector through financial incentives and regulatory adjustments.
However, challenges remain. The initial capital expenditure for electrolyzers and infrastructure is notably high, serving as a deterrent for market entry. India could consider adopting subsidy models similar to those in the US to encourage GH technology adoption. Another challenge is the absence of a robust GH certification system in India. Drawing inspiration from Australia’s certification mechanisms and the EU’s simplified regulatory approach, India can establish a quality assurance framework to attract investments. Infrastructure for GH storage and transportation is also a concern. Australia’s development of hydrogen hubs, serving as centralized points for GH production, storage, and distribution, could serve as a model for India.
In conclusion, India’s GH initiatives hold not only environmental significance but also economic vitality. The potential for job creation, enhanced energy security, and industrial transformation is substantial. Consequently, GH emerges as a pivotal element in India’s future energy landscape and economic growth.
