India may put green hydrogen consumption obligations on fertiliser industry and petroleum refiners

To kickstart a domestic hydrogen eco-system in the country, the Union ministry of new and renewable energy (MNRE) has circulated a draft Cabinet note for inter-ministerial consultation to put green hydrogen consumption obligations on fertiliser producers and petroleum refiners between FY24 and FY30.

Solar and wind plants can produce green hydrogen through electrolysis, a process wherein the electricity generated is put in water to create hydrogen and oxygen. The government is looking for ways to increase the penetration of domestic green hydrogen in industries which otherwise import natural gas and ammonia to produce hydrogen.

However, given the current high costs and lack of supporting infrastructure, experts have noted that the government has to overcome a number to challenges to pave the way for this new form of energy.

Imported ammonia now costs about $327 per tonne, while ammonia produced from green hydrogen may cost around $600 per tonne for fertiliser plants. It is not clear if MNRE has suggested any provision to reduce the impact of higher costs.

The country currently consumes about 5-6 million tonnes of hydrogen annually. MNRE had, on 31 May, 2021 circulated the draft ‘National Hydrogen Energy Mission’ document for inter-ministerial consultation, aiming to create a hydrogen value-chain in the country and bring down the costs of hydrogen production.

The government is also planning to use 2,000 mega-watt (MW) solar and wind power capacity for hydrogen production. Apart from industrial use, hydrogen technology can also be used to store electricity and potentially to run vehicles.

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