India’s Green Hydrogen Policy – An Opportunity to Achieve Carbon-Neutrality?

The Government targets making India carbon-neutral by 2070, as stated by the Indian Prime Minister at the COP26 summit in Glasgow. For this goal, the much anticipated Green Hydrogen / Green Ammonia policy was unveiled on 17th February 2022, in line with the National Hydrogen Mission (NHM) announced by the Indian Prime Minister on 15th August 2021.

Electrolyser used for Splitting Water into Hydrogen and Oxygen

Industrially, hydrogen is colour-tagged depending upon the way it is produced. Green hydrogen is hydrogen gas that is produced by means of electrolysis of water using renewable energy. The setup which is used for this process is called an electrolyser.

Green Ammonia refers to Ammonia that is manufactured using Green Hydrogen, and Nitrogen from the air.

Carbon Footprint of Industrially-used Hydrogen and Ammonia (Grey Hydrogen & Grey Ammonia)

Hydrogen and Ammonia are used in various industrial processes. Currently, India consumes about 6.67 Million Metric Tonne (MMT) of Hydrogen annually. Practically all of it is ‘Grey Hydrogen’, or Hydrogen produced from Natural Gas. For every Mega Joule of energy produced from Grey Hydrogen, approximately 150 grams of Carbon dioxide equivalent emissions are produced (gCO2eq/MJ). This is comparable to any other fossil fuel’s carbon footprint.

In 2020, about 15.4 Million Tonnes of Ammonia were consumed in India. Moreover, in the period from 2022 to 2027, it is predicted that India’s Ammonia production capacity will grow at approximately 9.27 Million Tonnes annually. Currently, most ammonia is produced using Grey Hydrogen. The process of reacting Hydrogen with Nitrogen to form Ammonia (Haber-Bosch process) is also energy-consuming and requires power. About 2.1 to 3.6 tonnes of Carbon dioxide is generated for every tonne of Ammonia produced.

Scope for Going Green in Different Sectors

Green Hydrogen in the Oil Refining and Steel Sectors

Hydrogen Plant at an Oil Refinery

About 54% of India’s Hydrogen is consumed by the oil refining sector. It is used for various refining processes, and for reducing the Sulphur content in diesel.

Hydrogen is a powerful reducing agent, which makes it useful in the metal refining processes as well. Green Hydrogen can be used in the steel industry instead of coking coal, which would make the process more eco-friendly. The steel thus produced is termed ‘Green Steel’. Also, 1 Kg of coking coal is used to produce 2 Kg of liquid metallic iron from iron ore, while 1 Kg of Hydrogen can be used to produce about 15 Kg of liquid metallic iron from ore. Even partial substitution of coking coal with Hydrogen in the Blast Furnace can significantly reduce Greenhouse Gas (GHG) emissions.

Green Hydrogen for Green Ammonia Production

Hydrogen is used in the production of Ammonia, which is a gas used in the fertilizer industry. Ammonia is also used to synthesize other chemicals and plastics. It is used in water treatment, and also as a refrigerant gas.

Switching to Green Ammonia will significantly lower the carbon footprint, as Green Hydrogen involved in the process is more eco-friendly to produce, and the energy supplied for the production of Ammonia shall also come from Renewable sources.

Therefore, the use of Green Hydrogen and Green Ammonia will help in reducing the carbon footprint of several industries.

India’s Green Hydrogen / Green Ammonia Policy

The Indian Government has introduced the Green Hydrogen Policy keeping in mind the target of producing 5 million tonnes of green hydrogen annually by 2030.

Major Highlights of the Green Hydrogen / Green Ammonia Policy

  • Green Hydrogen / Green Ammonia shall be defined as Hydrogen / Ammonia produced by way of electrolysis of water using Renewable Energy; including Renewable Energy which has been banked and the Hydrogen / Ammonia produced from biomass.
  • The waiver of inter-state transmission charges shall be granted for a period of 25 years to the producer of Green Hydrogen and Green Ammonia from the projects commissioned before 30th June, 2025.
  • Green Hydrogen / Green Ammonia can be manufactured by a developer by using Renewable Energy from a co-located Renewable Energy plant, or sourced from a remotely located Renewable energy plant, whether set up by the same developer, or a third party. The required Renewable Energy can also be procured from the Power Exchange. Green Hydrogen / Green Ammonia plants will be given Open Access for sourcing Renewable Energy within 15 days of receipt of their completed application.
  • Banking of Renewable Energy to be used for making Green Hydrogen / Green Ammonia will be permitted for a period of 30 days with the distribution licensee. The Banking charges for the same will be decided by the State Commission.
  • Priority basis connectivity to the Inter State Transmission System (ISTS) for Transmission of Renewable Energy from the energy generator to the Green Hydrogen / Green Ammonia plant will be given under the Electricity (Transmission and system planning, development and recovery of Inter State Transmission charges) Rules, 2021.
  • Land in Renewable Energy parks can be allotted to the Green Hydrogen / Green Ammonia manufacturers.
  • Government of India proposes to set up Manufacturing Zones where Green Hydrogen / Green Ammonia plants can be developed.
  • Green Hydrogen/ Green Ammonia manufacturers shall be allowed to set up bunkers near ports for export or use of Green Ammonia. The land for bunkers shall be provided by the respective Port Authorities at applicable charges.
  • Renewable energy consumed for the production of Green Hydrogen / Green Ammonia shall count towards Renewable Purchase Obligation (RPO) compliance of the consuming entity. The Renewable Energy used beyond the RPO of the Green Hydrogen / Green Ammonia producer shall be counted in the RPO compliance of the DISCOM in whose area the project is located.
  • The Ministry of New and Renewable Energy (MNRE) shall set up a single portal for the convenience of Green Hydrogen / Green Ammonia producers to obtain all required clearances for starting manufacturing, transportation, storage and distribution operations.
  • For achieving competitive prices, the demand for Green Hydrogen / Green Ammonia from different sectors may be clubbed into an aggregated tender, so that consolidated bidding can be carried out.

Initiatives for Green Hydrogen Production by Public and Private Sectors in India

Both public sector undertakings and the private sector have shown enthusiasm about entering Green Hydrogen / Green Ammonia manufacturing.

Indian Public Sector Projects for Green Hydrogen / Green Ammonia

Indian Oil Corporation Limited (IOCL) in July 2021 announced plans to set up a 40 MW electrolyser for the production of Green Hydrogen at its Mathura refinery and a 15 MW unit at Panipat, Haryana.

Gas Authority of India Limited (GAIL) had also in October 2021, announced that it would set up a 10 MW electrolyser for Green Hydrogen production. The company had finalised 2-3 sites for the plant, including one in Vijainagar in Madhya Pradesh.

Oil India Limited (OIL) had announced in December 2021, the setting up of a 100 KW Anion Exchange Membrane (AEM) electrolyser in Jorhat, Assam for Green Hydrogen production.

Bharat Petroleum Corporation Limited (BPCL) is also collaborating with Bhabha Atomic Research Centre (BARC), to develop alkaline electrolyser technology especially for use in oil refineries, as stated by BPCL’s press release on 13th December 2021.

The state-owned NHPC constituted a new subsidiary in February 2022, NHPC Renewable Energy Limited (NREL), for its green energy business, including Green Hydrogen.

NTPC Ltd. is setting up a Green Hydrogen Energy Storage project at NTPC Simhadri, Andhra Pradesh. Other than this, NTPC has planned a 5 MW electrolyser for Green Hydrogen production at its upcoming 4,750 MW Renewable Energy Park in the Rann of Kutch. NTPC has also planned a Hydrogen fuelling station in Leh, which will cater to Hydrogen Fuel Cell buses.

Private Sector Green Hydrogen and Green Ammonia Projects in India

John Cockerill Green Hydrogen Generation Setup

Adani Enterprises had announced an investment of $20 billion in renewable energy generation, including Green Hydrogen, by 2030 in September 2021.

Reliance signed a deal with a Danish start-up, Stiesdal PtX in October 2021, to set up a factory to produce low-cost electrolysers for Green Hydrogen production. Reliance had also announced in January 2022, an investment of $75 billion in renewable energy infrastructure, which includes generation plants, solar panels and electrolysers for Green Hydrogen production. The company’s goal is to bring down the cost of Green Hydrogen to $1 per Kg by 2030.

Hyderabad-based Greenko through its subsidiary Greenko ZeroC (GZC) had formed a joint venture with Belgium-based electrolyser manufacturer John Cockerill in December 2021, to facilitate the production of low-cost electrolysers for Green Hydrogen and Green Ammonia production. The JV targets commencement of delivery of these electrolysers in the Indian market in 2022.

In December 2021, L&T tied up with ReNew Power to develop, own, execute and operate Green Hydrogen projects in India. As per Larson & Toubro’s (L&T) press release dated 27th January, the company has signed an MoU with Norway-based electrolyser manufacturer, HydrogenPro, to set up an electrolyser manufacturing unit in India.

International Status of Green Hydrogen / Green Ammonia

The EU has set a target of installing an electrolyser capacity of 40 GW for Green Hydrogen production by 2030. Several countries have pledged to be net-zero carbon emission nations in the coming years. China has planned to have 1 million Hydrogen Fuel cell-powered vehicles (FCEV) before the close of 2030. Japan’s Toyota has led significant research and investment in Hydrogen fuel cell technology. Australia too has a plan to invest $214 million to install 26 MW capacity worth of electrolysers.

Future Plans to promote Green Hydrogen / Green Ammonia in India

India’s Green Hydrogen Policy addresses issues on the supply side of the Green Hydrogen / Green Ammonia production process.

For the demand side, the Indian Government will introduce mandates to encourage a shift to Green Hydrogen as an industrial raw material and as a source of clean energy. This entails making it compulsory for industries to procure a certain percentage of the required hydrogen / ammonia from Green Hydrogen / Green Ammonia manufacturers. This percentage can start from 15-20% in refineries and can be later increased to 30-40%, as mentioned by the Union Power Minister, RK Singh during a conversation with The Indian Express, released on 5th October 2021.

Mr. Nitin Gadkari Arrives at the Parliament in Green Hydrogen-powered Car

To show his support for the adoption of Green Hydrogen in India, Mr. Nitin Gadkari, Union Minister for Road Transport and Highways drove a Green Hydrogen-powered car to the Parliament on 30th March 2022.

Challenges in Adopting Green Hydrogen / Green Ammonia

Green Hydrogen is expensive to produce. Production of 1 Kg of Green Hydrogen costs around $3.5 to $6 while production of Grey Hydrogen costs between $1 to $2 per Kg. This cost difference makes Grey Hydrogen an economical choice. Due to this cost difference, the production of Green Ammonia becomes expensive as well. Therefore, for adopting Green Hydrogen and Green Ammonia, steps to make the production process cost-effective must be identified and implemented.

It is most convenient to consume Hydrogen near the site of production, as is done at many Ammonia plants and oil refineries. Transportation of Hydrogen is challenging since it is the lightest element in the universe. If Hydrogen is to be transported, it is done either through special pipelines or in special containers. Owing to Hydrogen’s low density it must be transported through pressurised pipelines to make the process cost-effective. Liquefaction of Hydrogen is also an option but requires it to be cooled to -253°C. Once liquified, Hydrogen is transported in special cryogenic vessels. Therefore, ways of transporting Hydrogen affordably and viably need to be explored further.

Moreover, Hydrogen is highly flammable. It is prone to combusting explosively and has safety risks associated with its usage and storage.