INTERVIEW: IPR, regulatory barriers limit access to affordable energy transition technology

Intellectual property rights and regulatory barriers are restricting access to cost-effective technology that is necessary for energy transition, particularly for producing low-carbon fuels, Vineet Mittal, chairman of renewables firm Avaada, told S&P Global Energy Jan. 16.

Avaada, in which Brookfield and PTT are invested, is implementing a 500,000 mt/year renewable ammonia project in Gopalpur, Odisha. Additionally, the company has plans for other projects involving renewable hydrogen and its derivatives, including renewable methanol, in Maharashtra.

"Intellectual property rights and regulatory barriers continue to be significant challenges in the energy transition journey, especially in accessing cost-effective technologies for ... zero or low-carbon energy transition pathways involving the production of various green molecules," Mittal said.

"It is evident that countries achieving large-scale deployment of renewable technologies have been investing heavily in domestic R&D (research and development) and fostering collaborative ecosystems amongst governments, universities, industry associations and private players," Mittal said, citing China's approach toward a domestic-driven development of the clean fuels industry.

Mittal stated that forming technology partnerships and incentivizing the sharing of intellectual property for clean energy solutions are crucial for advancing the energy transition to ensure that low-cost, environmentally friendly fuels are available on a large scale for all nations.

The hydrogen developer echoed the Indian government's statement to the UN Framework Convention on Climate Change on Jan. 2, which highlighted that the lack of technology transfer, high costs and regulatory barriers are among the multiple challenges in the fight against climate change.

India's National Green Hydrogen Mission, which has an outlay of Rupees 197.44 billion ($2.28 billion), aims to produce 5 million mt/year of renewable hydrogen by 2030 with a 10% market share of the global trade.

India's renewable hydrogen target "is ambitious yet achievable with continued policy and fiscal support, private sector investment, and infrastructure development," Mittal said.

Avaada is among the bidders under the mission, seeking incentives for the production of renewable hydrogen, the tenderer Solar Energy Corp of India said in December.

Eyeing opportunities

Avaada is actively exploring opportunities in global markets and keeping an eye on significant tenders for low-carbon or renewable hydrogen to secure buyers for its renewable ammonia, Mittal said.

"Each tender represents a unique market dynamic, whether it is Japan's CFD, Germany's H2Global program or Singapore's RFP ... Avaada is well-positioned to participate, provided the terms are conducive to long-term project viability, transparency, fair bidding and equitable risk-sharing," he said.

Indian renewable ammonia suppliers participated in South Korea's recent hydrogen-to-power tender, which offered a total capacity of 6,500 GWh in 2024, according to market sources. However, only Korea Southern Power Company secured a 750 GWh capacity. There has been widespread speculation in the market that a retendering is likely to occur this year.

"The [South] Korean tender taught us the importance of clarity in terms and conditions, particularly around pricing, offtake commitments and support mechanisms like carbon credits or subsidies," Mittal said.

If this tender is issued again, "transparency in demand aggregation, acceptability of international currency, a stable revenue model and alignment with global best practices will be critical."

Mittal expressed hope that South Korea will become receptive to purchasing renewable hydrogen/ammonia, which India plans to primarily produce using the electrolytic route. This contrasts with low-carbon (blue) hydrogen, which is expected to be mainly supplied by other regions like the Middle East and the US.

Competitive pricing

Mittal said that despite the challenges in acquiring technology, India is poised to become one of the lowest-cost producers of renewable hydrogen due to its cheap power and project establishment costs, positioning it as a competitive player on the global stage.

"Our current projections suggest a production cost of renewable hydrogen at around $2-$2.5/kg by 2030, depending on policy frameworks and electrolyzer cost reductions," he said. "For green ammonia, economies of scale and access to green energy will ensure competitive pricing in the global market."

Platts, part of S&P Global Energy, assessed Western Australian hydrogen produced via alkaline electrolysis (including capital expenditure) at $4.83/kg on Jan. 16, rising 22% month over month. Platts assessed Japanese hydrogen produced via alkaline electrolysis (including capex) at $6.21/kg on Jan. 16, increasing 19% from a month earlier.

"Buyers are increasingly focused on competitive pricing and waiting for their country policy, long-term offtake contracts and verifiable green certification," he said. "They are also seeking flexibility in terms of contract duration and volumes, alongside assurances of supply chain reliability."

Project updates

Avaada is exploring partnerships to co-develop projects for renewable hydrogen and its derivatives, Mittal said. Additionally, the company's new focus on renewable methanol production introduces another dimension to its renewable hydrogen business.

The company's green ammonia unit in Gopalpur, Odisha, will leverage nearby port facilities to facilitate exports. Odisha's interstate electricity transmission line is expected to become operational in alignment with the project's timeline. Avaada declined to disclose the timeline for the Odisha project.

In Rajasthan, Avaada is integrating renewable energy assets with hydrogen/ammonia production facilities to enhance efficiency. The company did not specify the capacity or the timeline for the Rajasthan project as it is in a nascent stage.

Mittal emphasized that India's approach to carbon pricing should aim to "balance developmental priorities with environmental goals."

"A carbon price of $20-$30/mt by 2026 could provide a meaningful signal to accelerate decarbonization while ensuring industries remain competitive in global markets," he said.