India plans to mandate green hydrogen for industries
The Ministry of Renewable Energy has sent a proposal to the Cabinet for approval, mandating the usage of green hydrogen by oil refineries and fertilizer manufacturers.
According to reports, the government intends to make green hydrogen production or procurement mandatory for some industries as part of addressing their needs. This move has the potential to make India one of the biggest producers of ‘fuels of the future’ that are seen as being instrumental in reducing carbon dioxide emissions and advancing energy transition.
R K Singh, minister of power and renewable energy, said that oil refineries and fertilizer manufacturers will have to start implementing the policy immediately after the Cabinet approves the proposal.
Following discussions with relevant ministries, the renewable energy ministry sent the proposal to the Cabinet for approval. This proposal, which follows the model of renewable energy purchase obligations for electricity distributors, is at the heart of Singh’s blueprint for energy transition and carbon reduction.
Refineries will be required to use green hydrogen for 10% of their needs starting in 2023-24, according to the policy. In five years, this will rise to 25%. A green hydrogen content of 5% will be used by fertilizer manufacturers and will eventually increase to 20%.
Cabinet has also been asked for an approval of adding different industries to the policy at a later date. Industry sectors such as steel and transportation will be gradually included in the policy as the market develops.
Within two years, the policy is likely to encompass the steel industry, since they need to undergo major changes to their equipment. The aim will be to reduce their carbon footprints and avoid carbon taxes on exports to developed markets.
A policy to promote green hydrogen will create a market for its production, which will in turn encourage future investment in it, Singh explained. Currently, refineries and other industries generate grey hydrogen from natural gas that emits CO2.
Green hydrogen can be produced from renewable energy in any country today. The cost impact of this will be negligible as wheeling of renewables attracts no cost. According to our estimates, India could be the world’s largest producer of green hydrogen, Singh added
As a clean mobility solution, hydrogen has wide application in the manufacturing industry. As green hydrogen is produced through electrolysis using renewable energy, it is the cleanest fuel. Currently in India, green hydrogen facilities are being planned by IndianOil, RIL, JSW, and NTPC.
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