India may put a previously shelved mandate for industries to switch their current consumption of fossil fuel-derived hydrogen to green alternatives back on the table, according to a senior government official.
In December last year,
India passed a law that made provisions for the government to mandate “a minimum share of consumption” of non-fossil energy or feedstock for certain “designated consumers”.
But weeks later, RK Singh, the minister for power, new and renewable energy, said there would be
no green hydrogen mandates on industry because the price of renewable H
2 was cheaper than grey hydrogen due to high gas prices, so it was “common sense” for users to buy the green variety.
Now, Bhupinder Singh Bhalla, the secretary of the Ministry of New and Renewable Energy (a senior civil servant), told the International Conference on Green Hydrogen in New Delhi today that a mandate was now likely — presumably due to a fall in the price of natural gas — adding: “We haven’t decided yet”.
Bhalla added that 70% of India’s annual production capacity by 2030 will be used for exports, implying that domestic industrial users — which consume around five million tonnes of grey hydrogen — may still be reluctant to switch to green H2 this decade.
India targets at least five million tonnes of annual green H2 production capacity by 2030, although its National Green Hydrogen Mission strategy document notes that this could rise to ten million tonnes a year to supply export markets. Hydrogen Insight has reached out to Bhalla’s office for clarification on which target he was referring to.
India’s national strategy aims to bring the cost of green hydrogen for use in refining and fertilisers into parity with fossil fuel-based H2 from 2026 onwards.
And while the government has ramped up policies to fill in this gap — such as
an upcoming double-sided subsidy auction and a
waiver of electricity transmission fees — these may each only shave off a fraction of a dollar from the per-kg cost of green H
2.
The proposed green hydrogen production subsidies only amount to an average of 40 rupees ($0.48/kg) over three years — a drop in the ocean compared to the maximum US clean hydrogen production tax credit of $3/kg over ten years.
India is also reportedly in talks to supply ten million tonnes of green hydrogen a year to the EU, which would be another reason why exports currently seem more appealing than local consumption.
The country has
recently secured a $1.5bn loan from the World Bank to ramp up green hydrogen support and launch its national carbon market, which would cap emissions from carbon-intensive industries and drive a shift away from fossil fuel feedstocks for hydrogen.
