CHENNAI: Singapore-based Sembcorp is close to finalising an offtake agreement with Japan’s Kyushu Electric Power for its Rs 36,238-crore green hydrogen facility planned inside the VOC Port complex in Thoothukudi. The project, spread over 160 acres, is designed to produce two lakh tonnes of green ammonia annually, with first output targeted for 2029. “The execution of the project will commence once the agreement is signed,” VOC port chairman Susanta Kumar Purohit said.
The venture is positioned as a trilateral clean energy partnership between India, Singapore, and Japan. Sembcorp will convert its green hydrogen into ammonia, with Kyushu Electric Power committing to buy the fuel for use as a partial substitute for coal in its thermal plants. Sojitz Corporation will act as intermediary, while NYK Line will handle maritime transport. A preliminary Heads of Terms agreement has already been signed among the four companies.
Despite the high-profile launch by Chief Minister MK Stalin nearly a year ago, progress on the ground has been limited. Apart from a small pilot project at the port, Thoothukudi’s green hydrogen ecosystem has yet to take shape. Other mega projects in the sector in Tamil Nadu have also seen little progress. ACME Green Hydrogen and Chemicals’ proposed Rs 52,474-crore plant, announced in 2022, has made no headway. A Rs 34,000-crore investment pledged by Malaysia’s state-owned Petronas has likewise not materialised.
Analysts cite cost as the biggest hurdle. Green hydrogen remains far more expensive than fossil fuels or even “grey hydrogen” derived from natural gas, with India’s levelised cost currently estimated at Rs 400 per kg.
Production requires significant clean power, large volumes of water and precious metals such as platinum, while storage and transport add further expense.
Still, the state continues to court investment. Hyundai Motor India, in partnership with IIT Madras and the state government, has announced a Rs 180-crore HTWO Innovation Centre at IIT-M’s Discovery Campus near Chennai. Due to open within two years, the R&D hub will focus on indigenous hydrogen technologies. “This is a crucial step towards building domestic hydrogen capability,” Industries Minister TRB Rajaa said.