INTERVIEW: India's IOC to set up green hydrogen plant by Dec, but fossil fuels to dominate

Indian Oil Corp., India's biggest state-run refiner, has floated several tenders to set up renewable hydrogen plants by the end 2021, but fossil fuels will continue to dominate its products long term due to the country's growing energy requirement, a top executive in the company said June 30.

"The Ministry of Petroleum and Natural Gas advised all the oil marketing companies under its control to set up at least five demonstration units of green hydrogen and use it for various applications including refining," Dr. SSV Ramakumar, IOC's director of research and development and board member, said in an interview.

Renewable hydrogen, popularly termed as 'green' hydrogen, is generated by electrolysis that splits water into hydrogen and oxygen using power from a renewable source such as wind or solar. Termed the 'fuel of the future,' renewable hydrogen can replace fossil fuels in transport, industrial and retail sectors.

IOC has floated tenders for electrolysis plants based on three different technologies and the renewable hydrogen generated in these would be used to fuel 15 fuel cell busses, Ramakumar said. This would add up to 10 kg/hour capacity of hydrogen and will be commissioned by the end of this year backed by a micro grid powered by solar electricity.

Hydrogen production pilot plants based on bio-methane to hydrogen and biomass gasification will also be installed at IOC's R&D center.

While renewable hydrogen is costly, conventional hydrogen -- also called 'grey' hydrogen -- is currently produced using fossil fuels via steam methane reforming, which releases carbon dioxide into the air. This is used by refineries and chemical companies.

If carbon dioxide is contained with carbon capture and storage (CSS) technology, the hydrogen produced is termed 'blue' hydrogen.

Betting on Biomass

IOC will grow its energy basket in line with demand and by 2030 more than half its total fuel production will come from conventional sources. The group's refining throughput was 62.351 million mt in 2020-21.

Crude oil contributed 76% to its revenue, as stated in its 2019-20 annual report.

"Indian oil has the onus for providing energy security to the nation so definitely our fossil fuel percentage will not be drastically reduced...50-70% of our product mix will still be fossil fuels but they will meet the highest quality standards of the day," Ramakumar said.

The company's gas percentage will be substantially increased and by the time hydrogen catches up, the company will be "front runners in hydrogen" with a production base of blue hydrogen in addition to renewable hydrogen.

Ramakumar said the economically feasible price of $2/kg of renewable hydrogen could be achieved in 10 years. But the best feedstock to achieve that number is biomass.

"Electrolysis is water intensive," he said adding 170 million mt of surplus biomass is available in India. Many fronts are working to utilize this biomass to convert it into methane and second generation ethanol, and hydrogen is also one such outlet.

"For a country like India which has a very high energy appetite and a very high growth trajectory, we don't want to discard any energy from the diversified energy mix," Ramakumar said. Some of the brownfield expansions will maintain IOC's "pre-eminent position in refining."

Contributor to hydrogen policy

Ramakumar has made suggestions for the formulation of national hydrogen policy and leads a sub-group on hydrogen sourcing. He has recommended nil tax on renewable hydrogen as opposed to the 18% Goods and Services Tax now, and also wants other hydrogen categories to have reduced tax.

The director said the country should utilize the "low hanging fruit" which is conventional hydrogen and gradually move to renewable hydrogen.

"We should be pursuing all the pathways on our journey to green hydrogen," he said.

The Indian government recently invited suggestions for its hydrogen policy as part of its 450 GW renewable capacity target by 2030 and is expected to seek to boost both demand and supply of the fuel.

ONGC link-up

At its Gujarat refinery, Indian Oil has a couple of hydrogen generation units of large capacity. In the run-up to producing fuels for the new emission standard for automobiles 'BS-VI,' the hydrogen generation infrastructure was augmented.

This could be commoditized and for this IOC has a collaborative project with state-run oil and gas firm ONGC for CCS that seeks to deposit the carbon dioxide in ONGC's Gandhar fields in Gujarat state.

"We are actually looking for good carbon capture technologies. Our own R&D center is working on CCS technology so there is a great chance that we might test some of our indigenous carbon capture technologies," Ramakumar said.