The current cost of production of green hydrogen is $5 to $7 per kg and this needs to be brought down to $1 per kg
Published Date – 11:45 PM, Sun – 24 September 23
The current cost of production of green hydrogen is $5 to $7 per kg and this needs to be brought down to $1 per kg
For a country that aspires to drive the narrative on decarbonisation and become a global hub for green hydrogen, manufactured by splitting water molecules using renewable energy, the recent announcement setting the standards for green hydrogen production in the country is a welcome move. However, there are challenges ahead including high cost of production and competition from heavily subsidised markets like China and the United States. India aims for annual production of 5 million tonnes of green hydrogen by 2030, which would cut about 50 million tonnes of carbon emissions and save more than $12 billion on fossil fuel imports. The recent notification issued by the Ministry of New and Renewable Energy has stipulated that carbon emissions should not exceed two kilograms of carbon dioxide equivalent for every kilogram of hydrogen produced. With this notification, India becomes one of the first few countries in the world to announce what constitutes the definition of green hydrogen. At present, the hydrogen consumed in the country is produced mostly with fossil fuels. The real issue is how much energy is required to produce hydrogen through electrolysis and the level of carbon emissions involved in the process. Although first production is expected only in 2026, India has been negotiating bilateral agreements with the European Union, Japan and other countries to start exporting the fuel. The current cost of production of green hydrogen is $5 to $7 per kg and this needs to be brought down to $1 per kg.
It would be difficult to produce, use or export green hydrogen at a large scale without a high level of international collaboration. It would require access to the supply chain of critical minerals, research in enhancing the efficiency of electrolysers and fuel cells, technology development for end use for blending of the gas for the heavy duty trucks and for developing infrastructure for storage and transport. Active international collaboration holds the key to upscale the use of green hydrogen in India which is a very important intervention for combating climate change and also for taking advantage of its strength of green hydrogen production. Another big issue is that renewable energy is not available round-the-clock and battery storage is still not economical. India expects a requirement of 125 gigawatts of renewable energy by 2030 for production linked only to the incentive programme. Europe, Korea and Japan, being renewable resource-deficient, are likely to be the key markets for green hydrogen but trade barriers are a major worry. In January, the Centre approved incentive schemes to support the manufacturing of electrolysers and production of green hydrogen. The government also extended a waiver of transmission fees for renewable power to hydrogen manufacturing plants commissioned before January 2031. A multi-pronged approach is needed to make the shift to a hydrogen-based economy and becoming a global hub for production and export.
