Green hydrogen is a critical industrial fuel of the 21st century and India is well-positioned to show leadership.
What is green hydrogen?
It is a type of hydrogen produced by splitting water through electrolysis, using electrolyser powered entirely by renewable power sources.
Advantages – It could replace fossil fuels and decarbonize a range of sectors such as petroleum refining, fertiliser production, steel production, chemicals, transport, etc.
Disadvantages – It is not commercially viable at present and is expensive to be manufactured.
Electricity – India has committed to 50% electricity capacity from non-fossil sources by 2030.
Most industrial greenhouse gas emissions in India come from steel, cement, fertilizers and petrochemicals.
Green hydrogen – India is targeting at least 5 million tonnes of production of green hydrogen by 2030, which is larger than that of any single economy.
How can the targets be achieved?
Domestic demand – If we are not a big player domestically, we cannot be a major player in the international market.
This will encourage heavy industries to increase demand, offering economies of scale by which suppliers can reduce prices.
Government procurement – A share of government procurement of steel could be nudged towards green steel, which could help India to later position itself as a green steel exporter.
Investments – India can be an attractive destination for domestic and foreign investment.
A mission secretariat can ensure project clearance is streamlined and reduce financial risks.
Electrolyser manufacturing – The SIGHT fund offers ₹4,500 crore to support electrolyser manufacturing under the performance-linked incentive scheme.
Not targeting value addition would result in electrolyser technologies and production again getting concentrated.
China could end up controlling 38% of electrolyser capacity by 2030.
Bilateral partnerships – India must cooperate with like-minded countries on trade, value chains, research and development, and standards.
Trade in local currency – Using yen or euro for trade, could reduce the cost of capital and help us become export competitive.
Rules for green hydrogen economy – India must coordinate with major economies to develop rules for a global green hydrogen economy.
Attempts for rules and standards are being driven by private corporations rather than structured intergovernmental processes.
What is the way forward?
G20 – India’s G20 presidency is an opportunity to craft rules for a global green hydrogen economy.
These rules must address operational threats, industrial competitiveness and strategic threats.
Global network – India should promote a global network on green hydrogen via which companies could collaborate.
India’s geography – With abundant sunshine and significant wind energy resources, India is geographically blessed to become one of the lowest-cost producers of green hydrogen.
India is well-positioned to show leadership, in our collective interest and that of the planet.
