Context:
A joint report by FICCI and EY emphasizes that India could capture 10% of the global green hydrogen market by overcoming cost and infrastructure barriers, aligning with its net-zero ambitions.
What is Green Hydrogen?
- Produced through electrolysis of water using renewable energy.
- Zero-emission fuel with applications in steel, fertilisers, mobility, and shipping.
- Key to achieving decarbonisation and net-zero targets.
India’s Current Initiatives:
- National Green Hydrogen Mission (2023) with an outlay of ₹19,744 crore.
- Target: 5 MMT annual production by 2030, requiring 125 GW renewable capacity.
- Pilot Projects: ₹208 crore allocated; 37 hydrogen-powered vehicles deployed; 9 refuelling stations to be operational in 18–24 months.
- Cost Trends:
- Current: $4–4.5/kg
- Projected (2030): $3–3.75/kg
Key Challenges:
- High Costs: Nearly 2x grey hydrogen due to high capex and transmission losses.
- Fossil Fuel Subsidies: Incentivise carbon-intensive fuels, limiting hydrogen competitiveness.
- Infrastructure Gaps: Lack of pipelines, storage, and renewable integration.
- Demand Uncertainty: No assured industrial offtake discourages investment.
- Global Competition: EU, Japan, South Korea aggressively building import hubs.
Recommendations from Report:
- Subsidy Reforms: Redirect fossil fuel subsidies to hydrogen projects.
- Industry Use Mandate: Enforce mandatory green hydrogen use in key sectors.
- Carbon Pricing: Introduce carbon tax to improve competitiveness.
- Demand Aggregation: Ensure long-term contracts and price stability.
