Explainer: What you need to know about India’s green hydrogen plans

The Indian government has approved an incentive plan of $2.11 billion to promote green hydrogen in a bid to cut emissions and become a major exporter in the field.

The move is aimed at helping India, the world’s third-biggest emitter of greenhouse gases, to achieve net-zero carbon emissions by 2070. 

The country is aiming for an annual production of five million tonnes of green hydrogen by 2030, cutting about 50 million tonnes of carbon emissions and saving one trillion rupees on fossil fuel imports, federal Information and Broadcasting Minister Anurag Thakur said on Wednesday.

“Our aim is to establish India as a global hub of green hydrogen,” Thakur said, adding that “we will make efforts to get at least 10 percent of the global demand for green hydrogen by 2030.”

He added that green hydrogen would play a huge role in countering climate change in the coming years. 

To promote the use of green hydrogen, Thakur said obligations – such as mandatory targets for green hydrogen consumption – would be required of fertiliser units, petroleum refineries and city gas distribution networks.

Indian companies such as Reliance Industries, Indian Oil, NTPC, Adani Enterprises, JSW Energy, ReNew Power and Acme Solar have big plans for green hydrogen.

The government expects investments totalling 8 trillion Indian rupees ($96.65 billion) in the green hydrogen sector by 2030, Thakur said, adding that incentives will be given for the manufacturing of electrolysers and production of green hydrogen.

The government’s incentive programme, the “Strategic Interventions for Green Hydrogen Transition Programme (SIGHT)”, will also need additional government spending millions of dollars on research and other expenses.

READ MORE: Is green hydrogen Africa’s answer to the global climate crisis?

 What is green hydrogen?

Green hydrogen is hydrogen that is produced by splitting water into hydrogen and oxygen by using electricity generated from renewable sources of energy. Most of the world’s hydrogen is made using fossil fuels, especially natural gas.

Green hydrogen has wide-ranging benefits like decarbonisation of industrial, mobility and energy sectors; reduction in dependence on fossil fuels and feedstock; development of indigenous manufacturing capabilities; creation of employment opportunities; and development of cutting-edge technologies.  

While green hydrogen is regarded as a potential remedy to cut emissions, there are still significant challenges in scaling up the technology and making it cost-effective. 

States can establish legal and policy frameworks that encourage investment. However, developing these policies and guaranteeing their enforcement and compliance depend heavily on enhancing government capacity and offering technical support, particularly to governments in emerging markets and developing economies.

“Green hydrogen is an expensive technology, and the viability of this technology can be improved through government support. Allocation of money for pilot projects and strategic interventions, especially if focussed on electrolysers, will improve the feasibility of such projects and will help in garnering more investment from the private sector as well,” said Vibhuti Garg, Director for South Asia from Institute for Energy Economics and Financial Analysis.

Attempts on a global scale

Several governments have included hydrogen fuel technologies in their national strategies since rising demands to transition towards decarbonisation of the economy and enabling technologies with higher carbon capture rates.

The United States and the European Union have already approved incentives worth billions of dollars for green hydrogen projects.

The EU’s hydrogen plan, adopted in 2020, outlined a vision for developing a European hydrogen ecosystem, including research and development, scalable production, and infrastructure with global reach. In addition, the EU’s goal for integrating the energy system includes hydrogen as a significant component.