Govt decides not to impose green hydrogen consumption obligation

One of the first commercial green hydrogen projects is coming up at IOCL's Panipat refiner. (representational image)

The Indian government has decided not to impose any green hydrogen consumption obligation (GHCO) on the hard-to-abate industries, said SSV Ramakumar, Director (Research & Development) at Indian Oil Corporation Limited (IOCL).

The same was corroborated by Secretary, Ministry of New and Renewable Energy (MNRE), BS Bhalla, who told Moneycontrol that the government has decided against imposing GHCOs as of now as it expects these industries to proactively start green hydrogen production or utilisation.

After much speculation, this is the first official acknowledgment of the central government's decision to not impose GHCOs. In the early stages of the National Green Hydrogen Mission (NGHM), Union Minister for Power and Renewable Energy, RK Singh, had announced that refineries, fertiliser, and steel industries, would have to meet GHCOs fixed by the empowered group of the NGHM.

"When the NGHM was being discussed, it was a massive consultative process. At that time the government was of the view that GHCOs should be imposed on industries. The first industries that were identified for this were oil, fertilisers, and steel. All kinds of GHCO numbers — 5 percent and 10 percent — were being worked out," Ramakumar said at the ongoing International Green Hydrogen Conference in New Delhi.

Also read: Green Hydrogen R&D: Govt plans to cut costs, boost efficiency.

"Accordingly, we planned different scenarios. For example, if the government mandates that 5 percent of our grey hydrogen is to be converted to green hydrogen, what kind of electrolyser capacity would be needed, how much investment has to be pumped in, and how that would in turn impact the cost of the petrol and diesel we produce. But no minimum mandate will be imposed by the government," he said.

However, Ramakumar said their targets have now become much more ambitious. "As quickly as possible, every molecule of hydrogen that our industry is using has to be green. So that is what we are working towards now," he said.

One of the first commercial green hydrogen projects is coming up at IOCL's Panipat refinery, with a 7 kilo tonne per annum (KTPA) green hydrogen production unit. IOCL has announced that wherever compressed biogas is available in the vicinity of their refineries, it would look at generously using it for the production of green hydrogen.

IOCL's refineries have huge capacities of sustainable steam-methane reforming units. The Maharatna PSU is planning to use compressed biogas instead of naphtha or natural gas as feedstock in these steam-methane reforming units to produce green hydrogen.

The world's hydrogen demand stands at 90 million metric tons (MMT) as on date, and as per all the big five consulting firms, by 2030, it is going to touch 140 MMT. Barring a fraction of the 90 MMT, all the hydrogen being used in the world  is grey hydrogen (produced through steam-methane reforming of a fossilised feedstock). Grey hydrogen leaves a large carbon trail, resulting in higher greenhouse emissions. Green hydrogen is produced using renewable energy for electrolysis.

IOCL to run green hydrogen buses in Delhi-NCR

Continuing its experiments with green hydrogen in the mobility sector, Ramakumar said IOCL is going to start a pilot project in Delhi-NCR, under which 15 fuel cell buses will run with green hydrogen produced through three different pathways — electrolytic, oxy-steam biomass gasification, and compressed biogas reforming.

IOCL had previously run a pilot project which involved blending hydrogen in Delhi government's CNG buses used for public transport. Ramakumar said the results from that pilot project were favourable as it led to emission reduction compared to a CNG bus. He, however, did not divulge the numbers from the findings of the project.

As per the latest Nationally Determined Contribution (NDC) targets, by 2030, India has committed to reducing the emission intensity of its GDP (emissions relative to the GDP) by 45 percent (from the 2005 level), and fuelling about 50 percent of its installed power capacity by non-fossil fuel-based resources. It also aims to achieve net zero by 2070.

Accordingly, the Union Cabinet approved the NGHM on January 4 with an initial outlay of Rs 19,744 crore, including Rs 17,490 crore for incentives. The government aims to produce at least 5 MMT of green hydrogen annually by 2030 under the NGHM, which would require 60-100 GW of electrolyser capacity and 125 GW of renewable energy capacity. This initiative is expected to reduce carbon dioxide emissions by 50 MMT per year.