Posted on 22 Dec 2021
Reluctance in sectors such as steel and transport suggest a tricky path for India to net zero using hydrogen, write Sathya Narayanan and Sumita Layek
India, the world's third-largest energy consumer, aims to reduce its carbon intensity by 45pc and carbon emissions by 1bn t by 2030 from 2005 levels, and is also targeting about 1mn t/yr of green hydrogen production.
The country has been taking some promising steps, with state-owned and private-sector firms announcing big investments in green hydrogen production.
But on the ground there is an air of reluctance, mostly evident in hard-to-decarbonise domestic industries such as steel. Most Indian steelmakers have yet to commit to a shift to green hydrogen-based technologies.
"Challenges to fully decarbonise the steel sector using green hydrogen are many and also complex," former industrial adviser to India's steel ministry, ACR Das, says. The major obstacle is limited availability of green hydrogen at a competitive cost to produce almost 0.5bn t/yr of steel by 2070 without using any fossil fuels, he says. Net zero steel production would likely require the industry to "switch over entirely to hydrogen-based iron making and/or scrap-based steel production, both of which seem unrealistic by 2070 or even thereafter", Das says. "Nevertheless, green hydrogen-based steel production is likely to have its significant share, say 20-25pc [by 2070]."
State-owned IOC is the only refiner that has started building a commercial green hydrogen plant in the country, perhaps as an indication that the government is serious about promoting the fuel to meet its 2070 net zero emissions goal.
And in India's transport sector, social acceptance could be a challenge. "Transport and consumer-linked green hydrogen usage may still be some time away given concerns over transportation safety," Mumbai-based Crisil Research director Hetal Gandhi says. Limited infrastructure, such as hydrogen refuelling stations, can also slow the momentum for green hydrogen uptake. India has two hydrogen refuelling stations, although Delhi is encouraging automakers to build hydrogen fuel-cell cars.
Despite these challenges, Hetal thinks India may be well placed in its ambition to build a domestic hydrogen economy "given competitive renewable energy prices [and a] push towards electrolyser capacities". India's state-run NTPC and BPCL, and private-sector Reliance Industries are all looking at green hydrogen production using electrolysers.
Meanwhile, the government is considering green hydrogen purchase obligations for refineries and fertiliser plants, starting with 10pc and increasing to 20-25pc, according to power minister RK Singh. It is unclear what impact such an obligation could have on refineries and fertiliser plants, although it could potentially affect utilisation at their grey hydrogen-producing units.
But Indian private-sector conglomerate Adani — which recently set up a subsidiary to invest in refineries, petrochemical complexes, specialty chemical units, and hydrogen and related chemical plants — is hopeful about hydrogen's potential in benefiting India in the long run. "It is not too difficult to imagine a scenario where green hydrogen at a price of less than $1/kg — coupled with the projected reduction in the cost of combined-cycle hydrogen turbines and fuel cells — will not only allow the country to make a transition from fossil fuels, but will also free India from the debilitating financial burden of energy imports," Adani says.
Source:Argus
