Green Hydrogen Policy, 2022: The fuel of the future

India’s ambition to decarbonize, reflects its keen desire to attain global leadership. The latest hydrogen policy is a major step towards that goal. Being a world leader in renewables, India has already achieved the initial targets and bigger ambitions are articulated now with India’s two richest industrialists, Gautam Adani and Mukesh Ambani, investing billions of dollars in green hydrogen.

Presently, the major amount of renewable energy comes from thermal plants. The government has announced a significant incentive programme for the green hydrogen to slash hydrogen production cost by 40-50 per cent. Since India is a signatory to Paris Agreement, with the robust R&D capacity, it is developing diverse applications to achieve net zero carbon emission to reduce the emission intensity of economic activity by 33-35 per cent by 2030.

For this, the government has taken several initiatives at various levels that includes the promotion of electric vehicle (EV), building support infrastructure, engineering shifts towards renewable energy, as well as engaging actively in climate diplomacy.

In 2021, the government launched the National Hydrogen Mission to meet the climate targets and make India a production hub for green hydrogen and green ammonia, as it is considered as the ‘fuels of the future’. The mission has targeted to produce five million tons of green hydrogen by 2030.

As per the study by the Council on Energy, Environment and Water (CEEW), the demand for green hydrogen in India could go up to 1 million tons within one decade. Estimates by Allied Market Research pegs India’s hydrogen market value at USD 81 million by 2025, projecting a growth of 6.3 per cent from USD 50 million till 2025.

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However, the biggest challenge in the green hydrogen production is its high production cost, which at present is nearly two times higher than the grey hydrogen. According to TERI, the present cost of green hydrogen production in India is around USD 5-6 per kg.

Despite the higher production cost, an analysis of The Energy and Resources Institute (TERI) says that by 2030, the production cost will fall by more than 50 percent. Green hydrogen is indeed going to be a trend setter but it would all depend on how quickly the process of manufacture, transportation and storage becomes available in the country.