INTERVIEW: India's hydrogen sector sees 'exciting' growth amid hurdles: exec

The hydrogen and ammonia sector in India is developing at an "exciting" pace, reflecting the government's efforts to promote green molecules as it advances its energy transition. However, some hurdles remain, Hydrogen Association of India Vice President Sachin Chugh told Platts, part of S&P Global Energy.

"The picture looks very fascinating, with a rider ... To sustain this momentum, we must continuously look out for the right kind of applications," Chugh said during the Asia Pacific Maritime conference, which ended March 27.

"We currently do not have adequate indigenous technology. However, progress is being made," Chugh said.

Some big companies have entered local manufacturing or are planning to, and have signed deals, Chugh said.

As an example, in March, Reliance secured a $3 billion ammonia offtake agreement with South Korea's Samsung C&T.

Platts assessed the Japan-Korea ammonia price -- the daily CFR assessment of the spot market for low-carbon ammonia in Japan and South Korea -- at $620/metric ton CFR on March 31, up $30/mt day over day.

The government has policies making a certain percentage of localization mandatory for projects awarded incentives under its schemes. It is also facilitating offtakes, especially in the domestic green ammonia market, Chugh said.

Equally important is the role of public-private partnerships in scaling manufacturing capabilities and promoting in-house research and development. "So, those are works in progress as far as India is concerned," he said.

"We have observed across the world that while projects are being conceived based on certain assumptions, those assumptions may not stand the test of time, particularly in the energy transition phase of new energy molecules," said Chugh, who is also an associate director and lead for Energy & Hydrogen at a UK-headquartered global consultancy firm. "Therefore, it is imperative to have the right kind of due diligence, project monitoring and expertise to develop that level of technical understanding before we start applying those economies of scale and the factors used in the conventional energy space."

Production costs are also an important consideration, with the cost difference between green, blue and gray hydrogen being a core constraint, Chugh said. However, as production ramps up, the price of green hydrogen will fall, he added.

Becoming competitive

"I see that the molecules from India and China are going to compete. However, the world needs many collaborators, partners and suppliers," Chugh said.

China may have an advantage in electrolyzer production and other requisite technologies. However, for green hydrogen production, renewable energy availability plays a "massive" role, giving India a clear advantage, Chugh said.

"Ultimately, the one who integrates and plans better will emerge as the frontrunner," he said.

Meanwhile, Chugh said India is accelerating measures in a timely manner to achieve its target of 5 million mt of renewable hydrogen by 2030. "One should not set up overly ambitious goals of 100% replacement of primary energy sources overnight," he said.

For example, he said India initially set a low ethanol blending target and achieved E20 five years ahead of its original 2030 schedule. Had it been too ambitious to say that 100% ethanol must replace gasoline from the very start, the program might not have succeeded, Chugh said.

Similarly, from the hydrogen perspective, this change needs to happen gradually, and blending e-fuels with conventional fuels might be a very good starting point, he said.

Shipping's decarbonization pathway

"As far as LNG is concerned, the global ecosystem is quite mature, and we have seen an immense traction around LNG trade and its ability to aid international shipping's decarbonization pathway," Chugh said.

For hydrogen bunkering, local policy alignment is already taking place, Chugh said.

India's Ministry of Petroleum and Natural Gas has launched the SATAT program for the transport sector. "I don't see any constraint in extending that program towards the shipping industry, which is looking for alternative fuels to cut greenhouse gas emissions," Chugh said.

"We started with the Maritime India Vision, then we reinforced it with the Sagarmala vision," he said, adding that the vision around hydrogen's acceptance in India's maritime industry is embedded within these broader programs.

The country is also progressing several pilots within ports that have been identified for conducting them, he said. Ultimately, the widespread adoption of hydrogen bunkering will depend on costs. The ratification of the IMO's net-zero framework will also boost its adoption, Chugh added.

S&P Global Energy's Hydrogen Production Assets database shows that India has over 100 renewable/low-carbon hydrogen projects -- including multiple phases of the same projects -- with a combined projected capacity of over 10 million mt/year.