05 Dec 2022 | 12:44 UTC

India's draft renewable hydrogen policy accentuates export opportunity

Highlights

1.72 million/mt 2030 green H2 export

Roadmaps with France, Singapore

5 million mt/yr 2030 green H2 output goal

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India's upcoming renewable hydrogen policy is poised to encourage exports in anticipation of strong demand from countries with 2050 net zero targets, 20 years ahead of India's own net zero commitment.

A 2021 draft green hydrogen/ammonia policy seen by S&P Global Commodity Insights earmarks a figure of 1.72 million metric tonnes of renewable hydrogen for exports by 2029-2030.

"Earlier it was supposed to be about 50:50 [split between national use and exports], but now I think the major emphasis is on exports," said Vivek Singla, President, Green Hydrogen at ReNew Power, a renewable firm planning hydrogen/ammonia/methanol projects in coastal locations in India.

An interim policy was released in February projecting a 5 million mt production target by 2030 for renewable hydrogen with incentives for producers including accelerated project approvals, cheaper power and access to land at ports.

Singla said it was expected the channel for conventional ammonia imports would be used to export renewable ammonia.

"Exports are likely to be a priority for earning foreign exchange, especially as India has a huge oil import bill and here is an opportunity to reverse it," said Ankit Sachan, Hydrogen Analyst at S&P Global Commodity Insights.

Domestic deployment of hydrogen could also be delayed due to higher production costs and a 2070 net zero target, would give India additional time to transition, he said.

While India will target southeast Asian markets and Europe it is up against stiff competition from Australia and the Middle East, the latter already selling pilot cargoes of clean ammonia to Europe and Japan.

S&P Global Commodity Insights' Hydrogen Production Assets database shows India has 54 renewable or low carbon projects with a combined projected capacity of 1.99 million mt, versus 137 Australian projects with a projected capacity of 9.84 million mt.

Platts, a part of S&P Global Commodity Insights, assessed Queensland hydrogen produced via PEM Electrolysis (including capex) at $5.75/kg Dec. 2, down 2% month on month.

It assessed Japan hydrogen produced via alkaline electrolysis (including capex) at $8.86/kg Dec. 2, down 1.56% month on month.

Early moves

India's early export moves include Indian renewable firm Greenko and Singapore's Keppel Infrastructure Holdings' memorandum of understanding Oct. 25 to explore production and export opportunities, targeting a 250,000 mt/yr of renewable ammonia.

"The collaboration between Keppel Infrastructure and Greenko is set to support India's goal to manufacture 5 million tonnes of green hydrogen per annum by 2030 and become a production and export hub," the companies said.

Meanwhile on Oct. 18, an Indo-French Roadmap on the Development of Green Hydrogen was announced, aimed at establishing a "reliable and sustainable value chain for decarbonised hydrogen."

"There are talks going on everywhere," Prabhat Kumar, Additional Secretary in India's Ministry of External Affairs said on Nov. 10 at the Energy Security Conference organized by Confederation of Indian Industries in New Delhi.

The draft policy is focused on setting up two green hydrogen production, use and export hubs, with refineries and fertilizer production units in close vicinity.

Green refueling hubs meanwhile are planned at all major ports, according to the draft.

The government's proposed outlay in the Green Hydrogen Mission draft is Indian Rupees 301.55 billion ($3.69 billion) for 2022-23 to 2029-30.

A full-chain policy would also see India support domestic manufacturing of electrolyzers and other enabling technologies.

It seeks 24-GW/yr of electrolyzer manufacturing capacity and a 100 GW-130 GW installed electrolyzer capacity, both by 2030.

For feedstock, it seeks a 160 GW-200 GW installed renewable energy capacity for renewable hydrogen by 2030.

The draft says the government would offer Rupees 140.05 billion under Production-Linked Incentive Scheme to support indigenous electrolyzer manufacturing.

The base case scenario assumes an electrolyzer cost of $600/kW and a renewable energy price of Rupees 2.3/kWh.

The resultant renewable hydrogen cost would be Rupees 195/kg ($2.29/kg) in 2022-23, falling to Rupees 125/kg ($1.53/kg) by 2029/30.