India has approved an incentive plan of $2.11 billion (174.9 billion Indian rupees) to drive the adoption and use of green hydrogen. The Indian Information Minister said the goal behind the incentive plan is to curb emissions and become a significant exporter in the field of green hydrogen. As India is one of the world’s biggest greenhouse gas emitters, this move is targeted to help India achieve net-zero carbon emissions by 2070. News first struck about India’s plans to create this incentive program for the green hydrogen industry in December 2022.
A Senior Government Official and Industry Manager working in renewable energy said India was driven to scale the green hydrogen industry by reducing the production cost of green hydrogen by a fifth over the next five years. Currently, the price in India is 300 rupees to 400 rupees per kilogram. With interest in green hydrogen increasing and more countries looking at ways to help the world reach net zero, the EU and US have already approved incentive programs worth billions of dollars for these kinds of projects.
India hopes the annual production of green hydrogen will rise to 5 million tonnes by 2030. As a result of this, they will be able to cut approximately 50 million tonnes of carbon emissions. This will save around one trillion rupees on fossil fuel imports, Anurag Thakur, the Indian Minister, has said. Anurag Thakur envisions India becoming the worldwide hub of green hydrogen and wants to meet at least 10 percent of the global demand for green hydrogen by the 2030 mark.
The potential of green hydrogen and overcoming barriers to adoption
Hydrogen can be utilised as a green fuel and is created by splitting water with electrolysis (an electrical process). The devices that are able to do that, electrolysers, are powered by renewable energy. Green hydrogen is the product and is a fuel-free alternative to greenhouse gas emissions. Green hydrogen has the potential to revolutionize the energy industry. This is because it can be used to power a wide range of applications from electricity generation, to industrial processes, and transportation.
It could also be a solution to the issue of energy storage because it can be stored easily and transported. In addition to the above aims, India is also planning on building an electrolyser capacity of 60 gigawatts to 100 gigawatts. Anurag Thakur has said this will help them greatly in producing green hydrogen. The $2 billion green hydrogen incentive also seeks to make green hydrogen more accessible and affordable. It will be doing this by decreasing its production cost. Green hydrogen is quite expensive when compared to its counterparts. For instance, grey hydrogen, which is made through fossil fuels, costs roughly 200 rupees per kilogram to produce.
Gas costs have meant the price has risen from 130 Indian rupees; however, it is still more affordable than green hydrogen currently. Promoting the use of green hydrogen and encouraging the switch, Anurag Thakur has said will involve obligations. For instance, mandatory targets for green hydrogen consumption. This would be mandatory for petroleum refineries, city gas distribution networks, and fertiliser units. Thakur has also said that the government is predicting investments totalling 8 trillion Indian rupees ($96.65 billion) in the green hydrogen sector by 2030.
In addition, incentives will be provided for the production of green hydrogen and the manufacturing of electrolysers. It’s perfectly timed since many Indian companies have big plans that surround green hydrogen. Some of these include Indian Oil, Reliance Industries, and JSW Energy. The ‘Strategic Interventions for Green Hydrogen Transition Programme (SIGHT)’ will also require further government spending of 14.66 billion rupees for pilot projects and around 8 billion rupees for research and various other expenses. If all goes well, India could greatly reduce its environmental footprint and help the global hydrogen market grow significantly.