India plans to displace the 5mn t/yr of grey hydrogen consumed by its refining, chemicals, fertiliser and metals sectors with the green variety of the fuel by 2030, according to the government’s recently published National Green Hydrogen Mission.

The country has also set out an ambition to corner 10pc of the global hydrogen market, with an eye on exporting 10mn t/yr of green hydrogen or ammonia from mid-decade.

Reducing both the capex of electrolysers and the cost of renewable energy are highlighted as key steps towards bringing the cost of green hydrogen down to parity with grey for refining and fertiliser manufacturing by 2026–27.

While India has some of the lowest long-term levelised costs of electricity from wind and solar power generation—and costs are expected to continue falling—the hydrogen mission will extend policy provisions for transmission, connectivity, banking, open access and energy storage for green hydrogen projects. India will also explore the use of decentralised energy systems—such as rooftop solar and small hydroelectric power plants—to power hydrogen production, as well as biomass-to-hydrogen.

$6bn – Value of India’s ammonia-based fertiliser imports

India aims to rapidly build up domestic electrolyser manufacturing capacity throughout the first phase of the plan, which runs up to 2026.

The government recently approved a INR197bn ($2.42bn) budget for the National Green Hydrogen Mission, including INR174.9bn allocated to incentives for domestic electrolyser manufacturing and hydrogen production. For the latter, the plan clarifies that eligibility criteria for participation in competitive bidding for green hydrogen and its derivatives will stipulate the use of equipment approved by the government, “as per specified quality and performance criteria”.

While the Ministry of New and Renewable Energy will be responsible for the coordination of hydrogen policy, the green hydrogen mission is expected to cut across the government’s departments for petroleum, power, chemicals, finance, commerce and industry, road transport, steel, shipping, and railways.

The government aims to establish a suite of standards and regulations for hydrogen production, storage, transportation and utilisation by 2024.

Green ammonia

The National Green Hydrogen Mission sets out an ambitious target for India to substitute all ammonia-based fertiliser imports with domestic green alternatives by 2035. In 2021, India imported 3mn t of ammonia, 10mn t of urea and 5mn t of di-ammonium phosphate worth more than $6bn.

“With the expected reduction in the price of green hydrogen, there will be an economic rationale for producing these fertilisers domestically, using green hydrogen/green ammonia to substitute imports,” says the mission document.

The plan proposes competitive bids for green fertiliser plants to take place between 2023–24, with construction expected in 2024–25.

India’s shipping sector will also pivot toward green ammonia as part of the strategy. The green hydrogen mission targets green ammonia bunkers and refuelling facilities to be established at one port by 2025 and rolled out to all major ports by 2035.

Meanwhile, the state-owned Shipping Corporation of India will retrofit at least two ships to run on green hydrogen or its derivative fuels by 2027. The mission also stipulates that government-owned oil and gas firms must charter at least one green hydrogen or derivatives-powered vessel for transport of petroleum products by the same year, with additional ships chartered for each year thereafter.

Pilots and hubs

India plans to support pilot projects in hard-to-abate sectors—including steel, long-range heavy-duty mobility and energy storage—as part of the mission. For green steel, in addition to potential support for greenfield projects, the plan proposes blending hydrogen into current steelmaking processes, with the proportion incrementally increasing as the cost of green hydrogen falls.

The plan notes that hydrogen hubs co-locating production and utilisation are likely to develop owing to the difficulty of transporting the gas across long distances. Two hubs are planned to be identified and developed in the first phase of the mission, and they will likely be close to major ports.

A call for proposals for pilot projects and hubs is likely to take place between 2023 and 2025.

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Author: Polly Martin