Can India Become A Net Exporter Of Green Hydrogen?

The Government of India has formally approved the National Green Hydrogen (NGH) Mission to make India a ‘global hub’ for using, producing, and exporting green hydrogen. To achieve this ambition, GOI has also approved a financial outlay of ₹19,744 crore.

The Mission leads India toward the development of the Green Hydrogen ecosystem in the country through an array of measures towards demand creation, strengthening the supply side while working on regulatory framework, technology and innovation to enhance the affordability of green hydrogen.

Need of Making Green Hydrogen in India

Countries around the world are working on reducing their dependence on fossil fuels due to climate change considerations. The first step toward the goal would be to secure the energy sources of the future that are not only cheap, reliable, accessible, and easy to handle as coal, petrol or natural gas, but are also clean.

While solar and wind energy has taken off, their intermittency and seasonality continue to be a challenge. On the other hand, nuclear energy has been in use for several decades now but is costly. Thus, another source to clean energy is not only welcome but also the need of the hour.

Hydrogen Spectrum

Hydrogen is a key industrial fuel in India and has several uses, such as the generation of electricity or fuel in industries or vehicles, and also a key element in the production of ammonia (a key fertilizer), steel, and refineries. However, all of the hydrogen in use now is produced from coal and is termed ‘Black or Brown’ Hydrogen. Similarly, the hydrogen produced from natural gas is called ‘Grey’ Hydrogen. ‘Blue’ Hydrogen finds its origin in fossil fuels.

‘Green’ Hydrogen is the cleanest form of Hydrogen. Hydrogen is produced via electrolysis, the splitting of water into hydrogen and oxygen with electricity generated from renewable energy sources such as solar or wind.

What we are aiming for is Green Hydrogen. The importance of Green Hydrogen can be understood from the fact that even though the technology to produce hydrogen in an emission-free manner is not yet mature or cost-effective, it features prominently in several countries’ strategies to achieve net-zero emission status by the middle of this century. In a way it can be said that green hydrogen is where solar energy was 10-12 years ago.

What is the National Green Hydrogen Mission?

The mission intends to incentivise the commercial production of green hydrogen in the country and make India a net exporter of fuel. The mission has laid out several targets to be reached by 2030. This includes over Rs. eight lakh crore investments in the sector creating over six lakh jobs. The NGH mission aims the development of green hydrogen production capacity of at least 5 MMT (Million Metric Tonne) per annum with an associated renewable energy capacity addition of about 125 GW in the country. In all, the country aims to reduce nearly 50 MMT of annual greenhouse gas emissions and reduce fossil fuel imports of over Rs. one lakh crore.

The mission, on succession, is hoped to deliver on several crucial parameters such as the creation of export opportunities for Green Hydrogen and its derivatives; Decarbonisation of industrial, mobility and energy sectors; reduction in dependence on imported fossil fuels and feedstock; development of indigenous manufacturing capabilities; creation of employment opportunities; and development of cutting-edge technologies.

There are two umbrella submissions under the programme. The first is the Strategic Interventions for Green Hydrogen Transition Programme (SIGHT), to fund the domestic manufacturing of electrolysers and produces green hydrogen. The other one is to support pilot projects in emerging end-use sectors and production pathways.

The initial outlay for the Mission will be Rs.19,744 crore, including an outlay of Rs.17,490 crore for the SIGHT programme, Rs.1,466 crore for pilot projects, Rs.400 crore for R&D, and Rs. 388 crores towards other Mission components. MNRE will formulate the scheme guidelines for the implementation of the respective components.

Challenges to Green Hydrogen Ambitions

The success of the NGH mission and the growth of India to become a net exporter of Green Hydrogen will largely depend on how swiftly the country will arrange for a reliable stream of components, upgrade the manufacturing and skill levels of its small and medium manufacturing enterprises and develop a transmission network to support hydrogen supply chain connecting industrial centres across the country.

Notably, the country lacks the infrastructure necessary to facilitate this development. Even developing a trained workforce in such a short time for such a crucial energy sector will be a major challenge.

Moreover, Green Hydrogen is not commercially viable at present. It costs around $6-8 per kg. This makes it highly uncompetitive against black hydrogen which is available at around $0.9-1.5 per kg, while grey hydrogen costs $1.7-2.3. the blue hydrogen obtained from fossil fuels costs anywhere from $1.3-3.6. To replace these unsustainable hydrogen forms, public and private efforts must bring the cost of Green Hydrogen down to around $1 per kg.

With the hydrogen mission, India is making a relatively early entry into a still nascent technology domain. It is reassuring that a large chunk of financial outlay is channelled toward developing domestic manufacturing of electrolysers, related equipment, and the production of hydrogen. For now, India seems to be moving in the right direction of becoming the global leader in Green Hydrogen production.