Green Hydrogen Production In India: Regulatory Framework

Green hydrogen has emerged as a powerful catalyst in the global quest for carbon neutrality and the fight against climate change. The manufacture of which is undertaken through electrolysis, which is a sustainable method of production, it uses electricity generated from renewable sources to split water into hydrogen and oxygen molecules.

After comprehending the great potential of green hydrogen and its environmental benefits, India has made significant efforts to decarbonize its economy and live up to its pledge to achieve Net Zero emissions by 2070. India has also taken several steps to decarbonize its economic growth path. To help attain these targets, the Indian government created the National Green Hydrogen Mission in January 2023. This objective is to promote the production, use, and export of green hydrogen while encouraging technological advancements and establishing a solid regulatory framework.

Initiatives by the Central Government

The Indian government has proactively addressed the challenges of the green hydrogen sector by implementing regulatory and policy measures, including:

1. Green Hydrogen Policy: In February 2022, the Ministry of Power announced the Green Hydrogen Policy. For projects completed before December 31^st, 2030, this programme provides incentives such as waiving Inter-State Transmission System (“ISTS”) tariffs for up to 25 years. It also speeds up the process of allowing open access to renewable energy sources and provides for the banking of unused renewable energy for 30 days.
2. RE Open Access Rules: The Ministry of Power notified the Electricity (Promoting Renewable Energy through Green Energy Open Access) Rules, 2022, per the Green Hydrogen Policy. Green hydrogen and green ammonia are included in these rules for meeting Renewable Purchase Obligations by entities such as licensees, captive users, and open-access consumers.
3. Green Hydrogen Mission: The Draft roadmap for implementing the Green Hydrogen Mission was released by the Ministry of New and Renewable Energy (“MNRE”) in July, 2023.[1] The mission seeks to create a production capacity of 5 million metric tonnes of green hydrogen per year by 2030, promote the use of green hydrogen in diverse industries, and devote money for R&D, infrastructure development, and safety standards.
4. SIGHT Phase I Guidelines: The MNRE released guidelines for the Strategic Interventions for Green Hydrogen Transition (“SIGHT”) initiative in June 2023, which provides financial incentives for green hydrogen production and the development of electrolyzers. The availability of these incentives is determined by production capacity.
5. Green Hydrogen Production Standards: The MNRE has introduced standards for green hydrogen production within India. The MNRE stated that Green Hydrogen originates from renewable energy sources, including electrolysis, biomass conversion, and green energy stored in energy storage systems. Thus, it has been mandated that carbon emissions should not exceed two kilograms of CO2 equivalent to each kilogram of hydrogen produced. Furthermore, the non-biogenic greenhouse gas emissions from the electrolysis-based production technique should not exceed 2 kg CO2 eq/kg hydrogen on an annual basis.

Potential Challenges

Several obstacles and issues have the potential to impede India’s efforts towards green hydrogen. If the ambitious aim of creating 5 million tonnes of green hydrogen per year by 2030 is to be met, the availability of a consistent and abundant water supply would have to be ensured, which is currently a significant hurdle on this path, particularly in locations with limited water resources. Although wastewater can be used as a feedstock, the need for water treatment adds to production complexity and cost.

Another hurdle to the economic sustainability of large-scale green hydrogen production is the need for significant expenditures, particularly to lower the high capital costs involved with the production of electrolyzers. The sector also faces a demand and supply imbalance, with incentives mostly focused on the supply side, creating ambiguity about the requirements for green hydrogen consumption in critical sectors. Last but not least, energy losses at various stages of manufacturing highlight the significance of rapidly expanding renewable energy sources to aid in the manufacture of efficient and sustainable green hydrogen.

Way Forward

India’s road toward green hydrogen offers numerous options. As the world seeks long-term solutions to climate change, India has the potential to become a global leader in green hydrogen production and export. The goal of the National Hydrogen Mission of increasing 125 GW of renewable energy generation, lowering fossil fuel imports, and reducing greenhouse gas emissions opens the way to enormous economic growth.

R&D investments, combined with collaboration with global companies, can stimulate innovation, reduce production costs, and provide a competitive advantage in the burgeoning green hydrogen market. Furthermore, the mission’s emphasis on locally producing electrolysers has the potential to strengthen the renewable energy sector by creating jobs and stimulating innovation. With the appropriate plans and investments, India can not only meet its energy demands but also contribute to a more sustainable and environmentally friendly global future.

Conclusion

India’s development of a green hydrogen economy is an important step in achieving its long-term ambitions. The Green Hydrogen Policy and National Hydrogen Mission are admirable projects, but they must address issues like as water availability, economic feasibility, demand stimulation, and energy efficiency. Effective planning, incentives, domestic demand development, and a strong legislative framework are critical to the mission’s success. India is taking substantial steps to construct a solid foundation for its green hydrogen ecosystem, with research, innovation, and international engagement all playing important roles in moulding the country’s future of green hydrogen.

FAQs

[1] https://mnre.gov.in/img/documents/uploads/file_f-1688557917362.pdf.

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