New National Hydrogen Policy a good start for India
India has thrown its hat into the global production race for the cleanest, alternative fuel—green hydrogen. The new National Hydrogen Policy announced on Thursday hopes to reduce dependence on—if not displace—fossil fuels and lower oil imports. Willing producers of green hydrogen, made using renewable power sources like wind or solar, will get incentives including waiver of inter-state power transmission charges for 25 years on the trot, besides priority connectivity to electricity grids and storage facilities for up to 30 days. The policy hopes to channel India’s efforts in meeting its decarbonisation targets, deepening energy security and positioning itself as the global hub of green hydrogen and ammonia exports.
The policy is a first step to India’s commitment at the COP26 Summit, where 31 other nations vowed to make affordable renewable and low-carbon hydrogen available by 2030. While India plans to produce five million metric tonnes per annum capacity by this decade, the EU committed to produce twice our target during the same time frame. Japan intends to build 10,000 hydrogen refuelling stations by 2030, China hopes to produce a million fuel-cell vehicles, while nations like the Netherlands and Switzerland have already made a beginning with commercial production of hydrogen trucks.
For India, green hydrogen is still in its infancy and the key challenge is its affordability. Currently, one kg of green hydrogen costs $3–6.5 and the latest policy aims to bring it down to $1 per kg by 2030. For a nation that imports 85% of its oil and 53% of its gas, the new hydrogen policy could act as a critical enabler, if not a game-changer, but the government must continue to innovate, increase R&D, and importantly provide clarity on demand-side measures like hydrogen purchase obligations.
The industry was looking for specific interventions including the mandated use of green hydrogen in certain sectors, which will give impetus to producers and the technology as well. Such a move is also crucial in decarbonising the hard-to-abate and heavily polluting sectors like oil-run power plants, iron and steel, and where solar and wind cannot effectively chip in.