Green hydrogen: Crucial to achieving India’s net-zero targets by 2070

Given the right policies, India can emerge as the least cost producer and bring down the price of green hydrogen to US$ 1 per kg by 2030

   
Green hydrogen

According to a NITI Aayog report, green hydrogen can significantly boost industrial decarbonisation and economic growth in India in the coming decades. Harnessing Green Hydrogen: Opportunities for Deep Decarbonisation in India, a report released today, provides a pathway to accelerate the emergence of a green hydrogen economy, which is critical for India to achieve its net-zero ambitions by 2070.

The report, co-authored by NITI Aayog and RMI, emphasises that green hydrogen—produced by renewable energy through water electrolysis—will be critical for decarbonising harder-to-abate sectors such as fertilisers, refining, methanol, maritime shipping, iron & steel, and transportation.

It goes on to say that, with emerging global momentum on hydrogen, India sees this decarbonisation opportunity as an enabler of energy security and economic development for the country, not just in the context of a low-carbon economy. The report describes several pathways for reaping the benefits of green hydrogen:

• Near-term policy measures can bring down the current costs of GH to make it competitive with the existing grey hydrogen (hydrogen produced by natural gas) prices. Medium-term price targets should be set to guide the industry towards making GH the most competitive form of hydrogen.
• Government can encourage near-term market development by identifying industrial clusters and enacting associated viability gap funding, mandates and targets.
• Opportunities around research and development and manufacturing of components like electrolysers need to be identified and appropriately encouraged with adequate financial mechanisms such as production-linked incentive (PLI) schemes to enable 25 GW of manufacturing capacity of electrolysers by 2028.
• A globally competitive GH industry can lead to exports of GH and hydrogen-embedded low-carbon products like green ammonia and green steel that can unlock 95 GW of electrolysis capacity in the nation by 2030.

On this occasion, Amitabh Kant, CEO of NITI Aayog, emphasised the importance of green hydrogen in terms of energy security, as well as the need to achieve size and scale in order to reduce the costs of green hydrogen. He stated that, with the right policies, India can become the lowest-cost producer and reduce the price of green hydrogen to $1 per kg by 2030.

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Suman Bery, Vice Chairman, NITI Aayog said,” An important message of the report was that green hydrogen can potentially provide a replacement of fossil fuels in industrial processes.” He added, “ The next steps at the policy level could involve arriving at the correct mix between mandates/regulations and price instruments.”

Highlighting the opportunity, Clay Stranger, RMI Managing Director, said that there is significant global interest in green hydrogen and countries are in the first stages of formulating a strategy and this will ultimately decide the winners and losers of the hydrogen economy. The report can become a reference for policy making in India.

While hydrogen can be produced from a variety of sources, due to India’s distinct advantage in low-cost renewable electricity, green hydrogen will emerge as the most cost-effective form. According to the report, hydrogen demand in India could more than quadruple by 2050, accounting for nearly 10 per cent of global demand. Given that green hydrogen could meet the majority of this demand, in the long run, the cumulative value of the green hydrogen market in India could reach $8 billion by 2030.