By Vineet Mittal
With climate change and carbon emissions looming large over our planet, threatening to drive it to extinction, nations worldwide are redirecting their focus towards natural renewable energy. Just as our ancestors did during evolution, the world is looking at non-carbon sources such as sun, wind, water and biofuels to extract energy. Water, the key to the sustenance of all life forms, has come to the rescue as a source of green hydrogen and ammonia, which have become buzzwords across the globe.
Green hydrogen is produced via water electrolysis, which can be used as a clean fuel from manufacturing to powering vehicles. Similarly, green ammonia is generated by combining green hydrogen from water electrolysis and nitrogen from the air. While this seems graspable theoretically, at the practical level, for them to become mainstream energy source, it will take aggressive strategies, huge investments andobust infrastructure by nations endowed with nature’s bounty. Also ReadBikaji Foods acquires 49% stake in BhujialaljiAdani, Vi approach DoT for 5G rollout deadline extension‘Every engineer will need to have some artificial intelligence expertise’ITC’s intelligent demerger of its Hotel Business to benefit shareholders in the long-run
This is good news for India, which is the world’s seventh-largest country in terms of area and among the top 10 producers of hydro, wind and solar energy. With the government recently announcing a Rs 19,744-crore outlay to produce 5 MMT of clean hydrogen fuel by 2030 as part of the Green Hydrogen Mission, the country is eyeing a spot as a major exporter of the fuel. But is this enough?
International demand to drive exports
According to a Strategy, PwC estimate, global demand for green hydrogen could reach about 530 MT by 2050, displacing roughly 10.4 billion barrels of oil equivalent (around 37% of pre-pandemic global oil production).Te export market could be worth US$300 bn yearly by 2050, creating 400,000 jobs globally in renewable energy and hydrogen production.
Estimated import figures of leading economies such as Japan, South Korea, the US, and the EU testify to the exponential demand for green fuel in the coming years. The policy environment for green hydrogen and ammonia is also increasingly promising, with countries defining roadmaps to transition into clean energy regimes.
Aligned with its commitments at COP, Europe has been moving steadily on its decarbonisation agenda. It has recently notified its targets for 2030 to 20 million tons of green hydrogen through Green Hydrogen Partnerships and Global European Hydrogen Facility. In the US, ammonia imports have increased manifolds from $652 mn in 2020 to $1.35 bn in 2021, indicating where the winds are heading.
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South Korea and Japan aim to blend 30% hydrogen at al teir gas-fired power plants by 2035 and 20% ammonia at more than half of their coal power stations by 2030, respectively. However, since these countries have limited land for RE generation, they can reach net-zero emissions only by importing vast quantities of clean hydrogen.
MENA emerging as the supply hub
The Middle East and North African (MENA) region is already way ahead in the race as the leader of green hydrogen supply. Studies have shown the participation of MENA countries in blue and green hydrogen initiatives grew from 11% to 89% between 2020 and 2021. Morocco is the pack’s leader, with a 19.3% share of the region’s total blue and green hydrogen projects. The country also is in the fray to produce 183,000 tonnes of green ammonia from green hydrogen to secure the decarbonisation of its fertiliser industry.
The Gulf countries are blessed with solar power, and a Strategy& report states solar panels there produce double the electricity as those in Germany. t ads that the cost of producing solar, wind and green hydrogen in the Gulf is about one-third of the global average, driving home the point that the race to produce, supply, and power ahead has very much begun.
India has ground to cover
Australia, a leader with a huge advantage in this space, recently expressed concerns over the aggressive policy support that the US and the Middle East enjoy. The US has propelled its decarbonisation efforts through the Inflation Reduction Act (IRA). At the same time, the Middle East undoubtedly has the upper hand in the form of resources and land being made available to accelerate the sector. If a country like Australia, which already has a huge competitive advantage, is feeling the heat, countries like India, which has only begun its journey, need to consider this as a warning bell.
We have a long way to go in the natural renewable energy space. The interventions taken so far are merely baby steps.
A key area that needs immediate attention i lan availability to set up power and water infrastructure for Green Hydrogen projects and associated renewable energy targets. The industry will also need support in transmission connectivity and energy banking support, which can be done only if the centre and state government work in sync.
Also read: India to be green hydrogen hub by 2040: Hardeep Singh Puri
Parallelly, the Govt also needs to look for ways to tap the overseas market via various measures, such as developing certification programs like Guarantee of Origin (GO) for certifying the green attribute of green hydrogen and its derivatives to enable Indian developers to provide necessary certifications to importing agencies, especially after the Carbon Border Adjustment Mechanism (CBAM) is made effective for imports by the European Union.
Additionally, the Govt can pitch for a G2G arrangement with major economies globally to provide the allotment of certain quotas for India in their total imports.
Besides, there’s an rgent need to recognise green hydrogen and its derivatives under the harmonised list of infrastructure sub-sectors, which can help divert foreign investment via the FVCI route into the sector, enabling the sector to get the much-needed boost.
Last, policy formation regarding green hydrogen purchase obligations for the domestic market, as India is one of the largest consumers of hydrogen and ammonia generated from carbon-intensive sources, will help boost the natural renewable energy demand for consumption.
The clock to save our planet is ticking fast and loud. The only way India can make a difference is to act quickly and ensure effective implementation of the policies. A very start isn’t enough, as we need to be agile with our initiatives and aware of the global environment. The rat race will be tough as this is more than just meeting the net-zero goals. Our lives will depend on this.
(The author is chairman, Avaada Group. Views expressed are personal.)
