Recently one of the main objectives of the government's policy is the cheaper production of green hydrogen to meet its domestic demand and to emerge as a global exporter and leader.

What Is Green Hydrogen?

Green hydrogen refers to the production of hydrogen through the electrolysis of water, resulting in zero carbon emissions into the atmosphere. This process is done using renewable energy resources such as wind or solar energy. This ensures that the entire process is environmentally friendly and does not emit carbon dioxide.

Hydrogen is widely used in the industrial production of ammonia, fertilizer, oil refineries, and vehicles. The current demand for hydrogen in India is 7 million tonnes per annum. It is estimated to go up to 28 million tonnes by 2050.

Moreover, the current technique of producing grey hydrogen emits 830 million tonnes of carbon dioxide into the atmosphere.

At the COP-26 Summit, India committed to going net-zero emissions by 2070. Efforts are being made to make the production of green hydrogen as inexpensive as possible. The government aims to reduce the production cost of green hydrogen from $6 per kg to $1 per kg. This cut down in the cost would act as an incentive for industries to use clean energy.

India is the third-largest emitter of carbon dioxide in the world.

Prime Minister Narendra Modi, on August 15, 2021,, launched the ‘Green Hydrogen Mission,’ which aims to make India the world’s largest exporter of green hydrogen with a 5-million-ton production target by 2030. To effect it, the government announced the Green Hydrogen Policy in February to boost the production of green hydrogen.

India imports 83% of its oil and 53% of its gas requirements. Relying on green hydrogen would reduce the country’s import bills and help it achieve self-sufficiency in meeting its energy requirements.

The Government Policy

The green hydrogen policy facilitates hassle-free and cheap production of green hydrogen. To implement the green hydrogen mission, the policy focuses on two main objectives; the first is the availability of land to green hydrogen producers, and the second is to wave off charges for interstate transmission for the next 25 years.

It also introduced a green hydrogen purchase obligation in fertilizer production and petroleum refining, similar to the renewable energy purchase obligation. The policy is also expected to list the sectors that will have to start using green hydrogen voluntarily.

It also emphasised a roadmap for sectors such as fertiliser and petrochemical industries to use green hydrogen mandatorily.

So far, several investments have been made to set up green hydrogen production plants and bring down its cost.

Major investors include Indian Oil Corporation Limited, Adani Group, and Reliance Industries. Along with them, several Indian companies have launched their plans to establish plants and invest in Research and Development, which, combined with government policies, will help reduce the costs of green hydrogen.

However, seeking green hydrogen projects' financing is challenging given the obstacles in its production and transport. Nevertheless, investments made by industry leaders, as well as incentives and tax cuts from governments, will significantly reduce the costs.

The government and the private sector are making these combined efforts to reduce the carbon footprint and emerge as a global green hydrogen leader.

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