The Union cabinet approved the National Green Hydrogen Mission with the aim of making India a global hub in the production of green hydrogen. Many industry experts argue that the timing of the cabinet approval indicates two things. First, the government is aware of this grand mission’s financial implications and has a kitty of Rs 19,744 crore to fund the initiative. Second, India, being one of the five countries putting its money on the table for green hydrogen, knows that there is no fixed template for incentives in this domain and that establishing a clean energy source hub is a tough task.
India is aiming for a big push. The target is to produce at least five million metric tonnes of green hydrogen per annum by 2030, with the potential to reach 10 MMT per annum that could cater to the export market. In the next decade or so, India hopes to gradually replace hydrogen produced from fossil fuels with purer green hydrogen in two major sectors: petroleum refining and fertiliser production. The mission would also help India cut down approximately 50 MMT of annual greenhouse gas emissions by 2030. This is in sync with India’s commitment towards the legally binding Paris Agreement of 2015. Employment generation and development of cutting-edge technologies can be accrued benefits once electrolysers, essential for the green hydrogen transition programme, are manufactured in the country.
Two conditions must be met for the green hydrogen mission to take off. There must be optimum demand for green hydrogen by making user industries transition to the cleaner fuel with obligations. Feasible subsidies must be granted to end users to attain parity with grey hydrogen obtained from natural gas and potentially nullify India’s import of liquefied natural gas. This would, in turn, create a consistent demand for green hydrogen and catalyse production of the fuel to incentivise the green ecosystem. The solar power industry, too, would benefit from green hydrogen since solar power requires renewable energy.
However, the success of the mission would depend on the execution of projects by the companies that are its stakeholders. Private sector giants, public sector navratnas as well as renewable energy majors have made ambitious announcements pertaining to the sector. For India’s green hydrogen mission to fructify, it would need plenty of business development activity and compliance with international regulatory norms. The real challenge would be to harmonise standards and certification systems for green hydrogen globally. While this will be a challenge for countries all over the world, India could play a pivotal role in facilitating it given its G20 presidency with a prerogative to champion the Global South.
The cabinet approval for the National Green Hydrogen Mission sends a positive signal to the private and global investing fraternity. Above all, it will give a much-needed impetus to the states to commence their own actions aligned with the principle of decarbonisation. If synchronised and executed properly, it would help India meet its long-term energy needs.
