Green Hydrogen Mission to bring India ahead in global market

India's National Green Hydrogen Mission with an initial outlay of ₹19,744 crore will help the country emerge as one of the leaders globally in the business of green hydrogen, say experts.

The country is already ahead of most nations in green hydrogen foray and has inherent advantages to tap the emerging opportunity. In the making of green hydrogen, land availability will be an issue for many nations. "For the past few years, the country has been implementing large capacity additions in solar power at one of the lowest costs in the world and that also ensures energy security during the transition phase to a hydrogen economy. That will also help in quickly harnessing adequate manpower needed for the capacity addition and the country has an ecosystem already in place," says Kapil Maheswari, president, Renewables & Green Hydrogen Development, Reliance Industries Ltd.

Policies like waiver of charges for wheeling electricity from state to state and earmarking nearly ₹17,490 crore for the SIGHT programme will help in fast development of electrolysers and related ecosystem. Now India is a net importer of green ammonia worth about $2.5 billion a year at about $1200-$1500 per kg and this can be saved if the country can produce green ammonia at equal or less costs, he said Thursday at a panel discussion on 'India's Energy Transition Roadmap: Role of Green Hydrogen & Other Alternate Fuels', organised at Indian School of Business (ISB) Hyderabad.

Ramanuj Kumar, partner, Cyril Amarchand Mangaldas, says that demand scenarios are emerging as the European Union is planning to import 10 million tonnes of green hydrogen and the US is offering $3 per kilogram incentive for green hydrogen. "In addition to this, Germany is going to float a separate entity to enter into 10-15 year green hydrogen supply contracts and subsidies to end users. This offers Indian companies a big export opportunity and India can also tap markets like Australia and Japan," he says.

India's overall renewable energy capacity addition will require funds worth $173 billion a year and average credit offering to the sector in the last three years were $19.3 billion. The $150 billion plus funding gap can be filled by increasing the priority sector lending limit from ₹30 crore and by earmarking at least 5% of the 9% overall credit growth every year, says Raghav Handa, director, Strategic Business Development, Government Affairs and Sustainability, HSBC India.

Ulka Kelar, director - Climate Change at World Resources Institute, notes that there are more challenges. To make one kilogram of green hydrogen, ten litres of treated water is required and for making 5 MT, the requirement is 50 billion litres and thrice that of raw water, which is an issue in solar hubs like Rajasthan, Gujarat and Tamilnadu. Besides, to make 5 MT of green hydrogen, land requirement is about 5 lakh acres. "Instead of looking at the 5 MT scenario by 2030, we should have plans for 20 MT by 2050," she says.

With EU mandating a carbon tax regime soon and more such carbon reducing plans from Governments in the offing, hard to abate sectors like steel and cement will be willing fast changing towards producing green steel and green cement, says Bose Varghese, senior director-ESG, Cyril Amarchand Mangaldas.

In a separate interaction with Fortune India, Deepto Roy, partner, Shardul Amarchand Mangaldas notes that the mission will provide impetus to reduce carbon emissions and continued addition of renewable generation capacity which has been seeing some tailwinds in recent times. "Green hydrogen has the potential to replace carbon heavy fuel in several key sectors," he says. The announcement of incentives under the Mission plan, along with the scale of likely hydrogen demand of 25 MT by 2030 in the country, positions India as among the top three attractive nations globally for green hydrogen demand and production, says Shubranshu Patnaik, Energy, Resources and Industrials Partner, Deloitte India.