Stakeholders in India’s nascent inexperienced hydrogen sector stay bullish that the alternate gasoline “goes to be huge”, however weak export demand — pushed by geopolitical instability and coverage reversals in key markets — is slowing down the tempo of growth.
At an business occasion on Thursday, Ministry of New and Renewable Power (MNRE) Secretary, Santosh Kumar Sarangi, mentioned, “One key issue, from an entrepreneur’s perspective, is market visibility. That market — because of a wide range of causes akin to geopolitical tensions and coverage backtracking by some governments, together with the US the place the IRA (Inflation Discount Act) is stalled — has created some skepticism about whether or not this transition will transfer ahead.”
The IRA, extensively seen as probably the most important net-zero carbon emissions intervention within the US, is below risk from President Donald Trump’s proposed “Large Lovely Invoice”, at present up for Senate consideration. It contains manufacturing tax credit meant to incentivize the deployment of low-carbon hydrogen.
“However I consider inexperienced hydrogen has a robust future and goes to be huge. India will play an instrumental position on this transition, alongside many different international locations dedicated to this,” he added.
The MNRE Secretary mentioned India is in discussions with Europe, particularly the ports of Rotterdam and Antwerp, to make sure that inexperienced hydrogen and its derivatives exported to those international locations are transported easily. Discount of import duties on India’s inexperienced hydrogen exports can also be part of ongoing free commerce settlement (FTA) negotiations with Europe, he mentioned.
Sluggish offtake slows growth of inexperienced hydrogen sector
ReNew, a serious renewables participant in India, is growing a inexperienced ammonia mission in Odisha. Nevertheless, weak export demand stays a serious hurdle for offtake.
“At this level, export markets are very weak, with little motion globally. That mentioned, there’s some progress on the delivery entrance, with the Worldwide Maritime Group urging delivery firms to start out utilizing a point of unpolluted fuels, about 5 per cent. Sustainable aviation gasoline may take off quickly. So there’s hope for the long run — however for now, progress stays gradual,” its chief government officer Sumant Sinha informed The Indian Specific.
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On demand from the EU, Sinha mentioned, “The problem is that the EU and its firms aren’t floating main tenders. The lone Hintco tender failed because of poor design from a developer’s perspective, drawing nearly no bids. Since then, nothing important has emerged, and with ongoing geopolitical stuff, consideration has shifted elsewhere.”
Hintco is the implementing company of the Hamburg-headquartered H2Global Basis, which was set as much as help the large-scale ramp-up and industrial use of unpolluted hydrogen and different low-emissions fuels.
Constructing home demand in focus
With export demand nonetheless weak, the federal government is concentrated on constructing home demand. “We’ve seen sturdy curiosity in inexperienced hydrogen — our tender for round 8 lakh tonnes was totally bid out. Equally, for offtake preparations, we’re working with the Ministry of Fertilizers and the fertilizer business. SECI (Photo voltaic Power Company of India Ltd) is at present conducting a young for about 7 lakh tonnes to help this,” Sarangi mentioned.
“So far as the Authorities of India is worried, a number of measures are underway to make sure offtake. Pilot tasks are additionally being applied throughout sectors like transportation, delivery, and metal. We’re at present funding hydrogen gasoline cell buses in 5 areas, together with Ladakh, to check their viability in real-world situations,” he added.
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Sinha argued that home mandates could also be needed to exchange gray hydrogen — produced from fossil fuels — with inexperienced hydrogen. As an illustration, the fertiliser business could possibly be required to supply extra inexperienced ammonia from home producers.
Inexperienced hydrogen, produced by powering electrolysers with renewable power, is a key feedstock for inexperienced ammonia, made by combining hydrogen with nitrogen. Inexperienced ammonia has functions as a low-carbon fertiliser and as a gasoline for delivery.
Inexperienced hydrogen not but value aggressive
“Commercially, it’s not viable but as a result of inexperienced hydrogen remains to be costlier than gray hydrogen. So, nobody goes to purchase it voluntarily. It’s much like the place renewable power was 15 years in the past — again then, it wasn’t commercially viable both. In the present day, it’s. Inexperienced hydrogen is at that early stage now,” Sinha mentioned.
A brand new report by the Confederation of Indian Trade (CII), Bain & Firm, and RMI launched on Thursday mentioned, “The slowed momentum primarily stems from the present excessive manufacturing prices together with nascent enabling infrastructure and excessive financing prices. Present manufacturing prices — $4-$5 per kg of inexperienced hydrogen vs. $2.3-$2.5 per kg of gray hydrogen usually (some industries could procure at larger prices) — will not be but aggressive.”
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In 2023, the Central authorities launched the Nationwide Inexperienced Hydrogen Mission, setting a goal of 5 million metric tonnes (MMT) of inexperienced hydrogen manufacturing capability by 2030, backed by an outlay of Rs 19,744 crore. Underneath the mission, the Strategic Interventions for Inexperienced Hydrogen Transition (SIGHT) programme goals to help each inexperienced hydrogen manufacturing and electrolyser manufacturing.
In April, MNRE additionally launched a scheme to measure, monitor, report, confirm on-site, and certify inexperienced hydrogen primarily based on an ordinary launched by the ministry in 2023.
The CII report outlines 5 instant demand-side methods to speed up inexperienced hydrogen adoption. It recommends mixing small quantities of inexperienced hydrogen into present gray hydrogen or piped pure gasoline provides for high-volume sectors akin to refineries, fertilisers, and metropolis gasoline networks, whereas factoring in technical feasibility. It suggests encouraging substitution in area of interest industries akin to glass, ceramics, and chemical compounds the place switching is cost-neutral. Public procurement, particularly for inexperienced metal, also can assist scale home demand.