Export Opportunities for Green Hydrogen: India’s Competitive Edge and Challenges
The growing demand for clean energy has created opportunities for green hydrogen as a tradeable energy commodity. Countries like Japan and South Korea are pursuing the possibility of importing hydrogen through ocean shipping, and European countries are welcoming the prospects for intra-regional and international hydrogen trade. Traditional energy exporting regions like Australia and the Middle East are positioning themselves for hydrogen exports.
India also has a competitive edge in the production and export of green hydrogen. India’s abundant renewable energy resources and favorable policy environment create a conducive ecosystem for green hydrogen production. India is also the world’s largest producer of ammonia, which is a key carrier for hydrogen.
Green hydrogen, which is produced through electrolysis using renewable energy, is emerging as a promising alternative to fossil fuels. Disparity in sources and consumption of green hydrogen is bound to create markets for green hydrogen as a tradeable energy commodity in the long term. Japan and South Korea, traditional energy importers, are already pursuing the possibility of importing hydrogen through ocean shipping, either through LH2, LOCHs, and NH3. European countries are also welcoming the prospects for both intra-regional and international hydrogen trade. Traditional energy exporting regions like Australia and the Middle East are increasingly positioning themselves for hydrogen exports.
India has a competitive edge in green hydrogen production, with abundant land and solar energy resources. The country’s ambitious target of achieving 450 GW of renewable energy by 2030 will provide a conducive environment for the growth of green hydrogen. Additionally, India has a large and growing demand for hydrogen, primarily in the fertilizer and refining sectors, which can potentially create a robust domestic market for green hydrogen.
However, several challenges persist in international hydrogen trade, including:
- Techno-commercial challenges: The additional energy cost of conversion makes cost considerations necessary, and pipelines remain underdeveloped, even nationally.
- Safety concerns: The issue of hydrogen embrittlement of steel can result in safety concerns and potential cost considerations.
Despite these challenges, the Indian government has taken several steps to overcome them and promote the growth of green hydrogen. Some of the key strategies are summarized in the table below:
| Strategy | Description |
|---|---|
| National Hydrogen Energy Mission | The Indian government has launched the National Hydrogen Energy Mission, which aims to promote R&D, pilot projects, and commercial deployment of hydrogen and fuel cell technologies. |
| Green Hydrogen Production and Promotion Incentives | The government has announced a slew of incentives to promote green hydrogen production and use, including exemptions from basic customs duty and IGST on certain inputs used for manufacturing electrolyzers, as well as a production-linked incentive scheme. |
| Strategic Partnerships | The government has entered into strategic partnerships with several countries, including Japan, UAE, and Israel, to facilitate the development of green hydrogen. |
| Hydrogen Clusters | The government plans to set up hydrogen clusters across the country to promote the development of a hydrogen economy. These clusters will facilitate the co-location of hydrogen production, storage, distribution, and dispensing infrastructure. |
| Research and Development | The government is funding several R&D projects to develop new technologies for green hydrogen production, storage, and use. |
India has a significant opportunity to become a major player in the global green hydrogen market. The government’s proactive approach to promoting the growth of green hydrogen, coupled with the country’s competitive edge in green hydrogen production, bodes well for the future of the sector in India. However, the challenges posed by international hydrogen trade must be addressed, and the government’s strategies must be implemented effectively to realize the full potential of green hydrogen in India.