NATIONAL GREEN HYDROGEN MISSION

Introduction

The National Green Hydrogen Mission aims to position India as a global leader in green hydrogen production and utilization. By targeting over 8 lakh crore in investments and 6 lakh new jobs by 2030, the mission promises significant economic growth through domestic manufacturing and reduced imports. This will aid India’s decarbonization, and energy diversification and enhance sustainability with a potential abatement of 50 million tonnes of annual emissions and supporting the renewable capacity addition of 125GW. Additionally, green hydrogen supports energy storage for a consistent renewable power supply.

The mission promises economic, environmental and energy security upsides – spurring India’s energy self-sufficiency, and growth while enabling cleaner industries through renewable integration and reduced fossil fuel dependency worth over 1 lakh crore imports. With a focus on reducing petroleum use, greenhouse gas emissions, and air pollution, the mission seeks to foster a diverse and efficient energy infrastructure by promoting the widespread adoption of hydrogen and fuel cell technologies. Green hydrogen, produced using renewable energy, can facilitate this transition in hard-to-decarbonize sectors. Witnessing these potential prospects, the Government of India has furthered the National Green Hydrogen Mission to scale up the production and utilization of green hydrogen across the economy.

This policy analysis will delve into the key goals and objectives, the current status of the mission, its impact and challenges ahead shedding light on its potential impact on India's energy landscape.

Aims and objectives

The overarching goal of the National Green Hydrogen Mission is to make India the global hub for the production, utilization and export of green hydrogen and its derivatives. This will reduce India's dependency on imported fuels.

The objective of the mission is to build capabilities to produce at least 5 million metric tonnes (MMT) per annum of green hydrogen by 2030, with the potential to reach 10 MMT per annum with the growth of export markets. Support the replacement of grey hydrogen (produced from fossil fuels) with green hydrogen in sectors like ammonia production, petroleum refining, city gas networks, and steel manufacturing. The mission aims to substantially decarbonize major hydrogen-consuming industries. Facilitate exports of green hydrogen and derivatives like green ammonia and green methanol. The mission aims for India to capture about 10% share of the expected global demand of over 100 MMT by 2030. Make India a global manufacturing hub for electrolyzers and other enabling technologies for the production and utilization of green hydrogen. This includes a target of 60 GW per year of electrolyzer manufacturing capacity, of which 15 GW per year is expected to be supported by production-linked incentives. Promote R&D, pilot projects and infrastructure development across the green hydrogen value chain spanning renewable energy, electrolysis, storage and transportation of hydrogen to various end-use sectors.

Current status

As in the figure, the allotted budgetary allocations, the expenditures will be distributed among key areas, namely the Strategic Interventions for Green Hydrogen Transition (SIGHT) program. This program encompasses incentives for the manufacturing of electrolysers and the production of green hydrogen. Additionally, funds will be allocated to Pilot Projects focusing on steel, mobility, shipping, and similar sectors. A portion of the budget will be dedicated to Research and development, with the remaining funds directed towards other essential components of the mission.

The Indian government has set a specific limit for associated emissions, reflecting a commitment to cleaner fuel production. This standard applies to both electrolysis and biomass routes. India's green hydrogen standard of 2 kg of carbon dioxide equivalent per kg of hydrogen stands between the European Union's 3.2 kg and the Green Hydrogen Organization's recommendation of 1 kg. The government appears to balance climate concerns with competitiveness in the global market.

India currently produces around 6.7 million metric tonnes of hydrogen per year, used across sectors like oil refining, ammonia/fertilizer production, methanol and metals manufacturing. However, over 60% of the hydrogen demand comes from the refining sector alone. Further, most of the current production is based on fossil fuel routes like natural gas reforming and coal gasification to extract hydrogen, yielding almost 6.5 million tonnes of carbon-intensive "grey hydrogen". This grey hydrogen, while meeting the large majority of demand presently, has a heavy carbon footprint. On the other hand, environment-friendly "green hydrogen" produced from the electrolysis of water using renewable energy accounts for less than 1% currently. The installed capacity of electrolyzers, the key technology for green hydrogen production, stands at just around 2 megawatts in India. But the new National Green Hydrogen Mission aims to dramatically flip this scenario - from fossil-based grey dominating to rapid growth in green hydrogen from renewables. With targets to reach 5 million tonnes of annual green hydrogen production by 2030, the mission marks the onset of an energy transition where hydrogen promises to be a viable sustainable pathway

Gujarat emerges as a frontrunner with clusters of operational plants and new projects in the works. This includes India's largest private company Reliance building mega renewable complexes to produce solar equipment, batteries, fuel cells, electrolyzers and green hydrogen. State-owned GAIL is also piloting the blending of hydrogen in natural gas here. Further north, NTPC has innovated with a green hydrogen fuelling station in Leh using its solar park in Kutch. It also has a producing plant in Vindhyanchal. Moving east, Oil India Limited has a small operational pilot supplying green hydrogen for blending based in Assam and intends to scale up. Down south, Indian Oil gears up to integrate green hydrogen production at its Mathura refinery and build a stand-alone unit at Kochi airport. Reflecting the planning underway, pockets of Gujarat are designated as future project sites. This includes Larsen and Toubro evaluating an integrated complex with electrolyzer manufacturing at Hazira. With both the public and private sector steering initiatives, it's inspiring to see the foundations being laid for green hydrogen across India. Gujarat may be poised as a hub but it's heartening that states like Assam and even remote locations like Leh have working models.

Post-implementation Prospects:

Research in rural villages has shown that putting energy control and production decisions in the hands of local women through projects like solar microgrids leads to broader social development goals being achieved. Incomes rise, health and sanitation improve, and educational outcomes increase, especially for girls (Dutta, 2019). The adoption of green hydrogen energy in India could have a beneficial social impact, especially for women (Chauhan & Saini, 2021). Green hydrogen, produced using renewable energy like solar or wind, offers a clean fuel alternative that can empower marginalized communities. In a still largely patriarchal nation like India, improved access to clean, sustainable energy sourced locally can promote gender equality and women’s socioeconomic status (Dutta, 2019). Specifically, decentralized green hydrogen projects can create jobs and skills training for women at the community level (Chauhan & Saini, 2021).

Green hydrogen adoption could amplify these benefits. There are also very relevant applications of green hydrogen, like clean cooking, that can disproportionately benefit rural women in India. Burning solid fuels like wood or charcoal for household energy leads to high levels of indoor air pollution and respiratory illness risks, issues women are predominantly exposed to (Dutta, 2019). Green hydrogen-based stoves and fuel cells offer a clean cooking alternative. Freeing women from unclean cooking duties has been shown to have positive educational impacts as well like delayed marriage and higher school attendance for girls whose mothers own clean-burning stoves (Chauhan & Saini, 2021).

However, as with many well-intentioned development programs, social barriers around gender, caste, and class require thoughtful policy design for green hydrogen to truly empower marginalized women (Dutta, 2019). The influence spans vulnerable communities dependent on fossil fuel industries, gender inclusivity of emerging jobs, the financial viability of MSMEs comprising 30% of GDP, rising household energy costs, and increased input costs affecting steel, shipping, and aviation sectors. A government report forecasts that scaling domestic green hydrogen to 10 million tons per year in the next decade could generate over 6 million new jobs across transport, gas, and manufacturing industries (Chaturvedi, 2022). In particular, steel, fertilizer, and petrochemical firms using hydrogen as a feedstock are expected to see falling production costs and increased output (Ministry of New and Renewable Energy, 2022). India's state-owned natural gas companies are also investing heavily in green hydrogen blending up to 10% into existing gas pipelines (Chaturvedi, 2022). This could fundamentally transform gas distribution by reducing reliance on imports over time. Industries relying on piped natural gas like glass, ceramics, and textiles can expect more stable long-term supply and pricing as a result of green hydrogen blending. The mission will also likely stimulate local manufacturing, innovation ecosystems, and global supply chains in advanced electrolyzers, fuel cells, hydrogen storage materials and components (Ministry of New and Renewable Energy, 2022). End-use cases in heavy vehicles and data centres are already emerging in initial pilot studies by private companies like Reliance and Adani (Chaturvedi, 2022). In Energyworld’s report, it is estimated about 4.5 million fossil fuel sector workers could be impacted, necessitating extensive retraining and skills development initiatives. Decentralized green hydrogen production via small-scale electrolyzers powered by rooftop solar offers new business models for local system integrators and installers (Chaturvedi, 2022). The mission is also expected to drive down electrolyzer costs by up to 60% through manufacturing incentives and scale (Ministry of New and Renewable Energy, 2022). This makes small-scale electrolysis viable across industries like metals, glass, electronics, oil and gas, textiles, etc. Spillovers into transport applications like hydrogen vehicles, data centres, fuel cells and allied consulting services offer additional opportunities for small businesses over the next decade (Chaturvedi, 2022). Prior renewable energy missions have shown that decentralized adoption unlocks grassroots entrepreneurship and employment too (Dutta, 2019). But overall, green hydrogen adoption does carry significant promise and potential to improve gender equity, health, economic participation, and the autonomy of women from rural villages to cities across India

Challenges

One of the significant hurdles we face revolves around ensuring a consistent and economical supply of renewable energy. Achieving the mission's ambitious goal of producing 5 million metric tons of green hydrogen necessitates an addition of approximately 125 gigawatts of renewable energy capacity. This poses a challenge, particularly when many state-owned distribution companies are grappling with substantial financial losses. Moreover, a noteworthy aspect is that nearly 99% of the current demand for hydrogen originates from the refining and fertilizer sectors, both of which the government has highlighted as key focus areas in its policy. Despite the declining costs of renewable energy, the allocated financial resources for the mission, amounting to Rs 19,744 crore, constitute only about 2.5% of the overall investment target of Rs 8 lakh crore. This underscores significant viability gaps that require additional incentives to bridge. Importantly, India presently lacks large-scale manufacturing facilities for alkaline or PEM electrolyzers, leading to a dependence on imports that complicates the path towards widespread adoption of green hydrogen. The mission sets an ambitious target of manufacturing 60 gigawatts per year of electrolyzers to counter this, as stated by the Power Minister. However, the absence of robust storage and transportation infrastructure for hydrogen poses a critical gap that could impede the scaling-up process, despite provisions for hydrogen hubs and pipelines in the mission. Lastly, while green hydrogen is touted as a potentially lucrative multi-trillion-dollar market, the primary stumbling block is its affordability. Current costs are four to five times higher than those associated with carbon-generating alternatives, causing concerns among the general populace about the feasibility of adopting this option.

Conclusion

The National Green Hydrogen Mission marks a pivotal step in advancing India’s energy security and sustainability goals. By targeting 5MMT annual green hydrogen production and positioning India as a major exporting hub by 2030, it lays the foundation for large-scale decarbonization of carbon-intensive sectors. If executed efficiently, the mission can attract over 8 lakh crore in investments, create 6 lakh jobs, and lead to 50MMT emissions reductions annually. However, the policy’s success remains contingent on factors like ensuring robust renewable energy expansion to support green hydrogen production, maintaining technology cost-competitiveness compared to fossil fuel alternatives, and creating export linkages. To enable the ambitious 5 million tonnes green hydrogen production target, India must promote decentralized renewable energy systems, provide financial incentives to improve economic viability across sectors, develop national scale hydrogen storage and distribution infrastructure, foster international collaborations for advanced technology access, introduce policy mechanisms like graduated blending targets, and incentivize private investments across the value chain. As referenced by Chaturvedi (2022) and Dutta (2019), appropriate frameworks supporting decentralized production, infrastructure development, viability funding and public-private partnerships can address critical challenges around renewable expansion, cost competitiveness, manufacturing capacities and export linkages. With well-designed market levers and incentives unlocking wider adoption, the National Green Hydrogen Mission can stimulate localized entrepreneurship and enable India to emerge as a global clean energy leader. Appropriate policy incentives, infrastructure development support across the hydrogen value chain, and public-private synergies remain imperative for the mission to stimulate the widespread adoption of hydrogen. With the right market mechanisms and policy frameworks, the National Green Hydrogen Mission can enable India to emerge as a global clean energy leader.

REFERENCES

https://www.livemint.com/industry/energy/five-indian-companies-leading-the-green-hydrogen-revolution-11636369476063.html

https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1906823#:~:text=A%20Green%20Hydrogen%20production%20plant%20of%20capacity%202,about%20175%20tonnes%20per%20annum%20by%20M%2Fs%20ACME.

https://www.nsws.gov.in/s3fs/2023-10/National%20Green%20Hydrogen%20Mission%20%281%29.pdf

https://energy.economictimes.indiatimes.com/news/power/ntpc-releases-biodiversity-policy-2022/91934015

https://dst.gov.in/sites/default/files/Country%20status%20report%20final%20Hydrogen.pdf