What India needs to do to become a global green hydrogen hub

Green hydrogen is increasingly seen as a vital component in global strategies to mitigate climate change. Generated by electrolysis of water using renewable energy such as wind and solar power, it acts as an energy carrier and a means of storage. With abundant solar and wind power potential, India is faced with a compelling opportunity for green hydrogen production and export, which will allow it to decarbonize hard-to-abate sectors such as mobility and industrial heat.

Government backing green hydrogen ambition

India has entered the green hydrogen space, outlining an ambitious agenda through its National Green Hydrogen Mission. Aiming to produce at least 5 million metric tonnes (MMT) annually by 2030, the government's initiative reinforces its national commitment to decarbonization. Several companies have announced projects at scale, as well as pilot stage projects to take early advantage of the learnings, and gear up for much bigger projects in the future. Hero Future Energies is starting construction of a green hydrogen – LPG blending project, to demonstrate the concept of decarbonizing the industrial heating sector.

Natural advantages offer market edge

Harnessing energy from abundant sunlight and wind, India finds itself in a good position to participate in the emerging green hydrogen market. Cost-effective renewable electricity could make green hydrogen production in India economically viable, allowing it to meet local demand as well as participate in export markets. Further, India's well-developed and extensive coastline and the well-developed port infrastructure provides the required platform for exports of green hydrogen.

Talent pool enhances prospects

India's extensive cadre of engineers and technicians offers an edge. Specialized training programs can arm this workforce for the challenges and opportunities in the green hydrogen sector. ?India, which has been a major source for engineering and technological talent for countries across the globe, will have to gear up to the new human resource requirements in the nascent green hydrogen segment.

Infrastructure hurdles and financial barriers

However, despite these advantages, India faces several obstacles. ?The production cost of green hydrogen remains high. Yet, a combination of government subsidies and tax incentives can make these projects economically viable in the near-term, allowing companies to get on the learning curve to optimize CapEx and process efficiency, and thereby lower cost of hydrogen production.? This would allow green hydrogen to compete with current solutions, without the need for any further government support - the Rs 17,490 crore incentive schemes for production of electrolyzers and green hydrogen will certainly play an important role in this journey. Investors may have to be further incentivized to choose India over competing geographies like the United States, which has provided very attractive benefits under the Inflation Reduction Act. However, given the massive potential in India, companies in both the public and private sectors have already announced plans to invest in green hydrogen production.?

Demand creation and aggregation of offtake presents another challenge. Along with supply-side support for green hydrogen, the government can also incentivize demand through consumption mandates of green hydrogen in key industries/sectors, and through aggregated tenders through agencies like SECI to provide assured offtake.

The absence of specialized hydrogen transportation infrastructure, such as pipelines and refueling stations, needs immediate attention. These hurdles can be partially overcome through public-private partnerships, which could fast-track the development of necessary infrastructure.

Time for multi-sector collaboration

The transition to green hydrogen is more than just a business opportunity for India; it represents an opportunity to accelerate decarbonization of the global energy landscape. Now is the opportune moment for stakeholders from government, private sector, and educational institutions to collaborate. As the world pivots toward cleaner energy solutions, India has an opportunity to play a meaningful role in this sector.

By capitalizing on its advantages and addressing the challenges head-on, India can become a leading producer of green hydrogen. The economic and environmental rewards of such an endeavor are too substantial to be ignored. With the clock ticking on climate change, there’s no better time for India to stake its claim in the green hydrogen revolution.