India proposes its oil refineries and fertilizer plants to use green hydrogen

India is eyeing to make it necessary for fertilizer plants and oil refineries to utilize green hydrogen as it plans to minimize the country’s dependence on fossil fuels.

According to ‘Mint‘, the Union cabinet formulated a draft note that stated fertilizer plants and oil refineries might have to utilize green hydrogen to satisfy 0.15 per cent of their total hydrogen requirement from the year 2023-24. It further added that the industries will have to maximize it up to a tenth of their total requirement within the next six years.

Indian companies, namely Reliance Industries Limited have been preparing to leverage the opportunities presented by the transition to cleaner energy. Earlier, RIL have also disclosed that as a part of its pivot towards clean energy, its plans to build an electrolyser giga factory and a fuel cell giga factory.

The government look forward to implement the Green Hydrogen Consumption Obligation (GHCO) in fertilizer production and petroleum refining, as it was done with renewable purchase obligation. Renewable Purchase obligation’s needs electricity distribution companies to purchase a fixed amount of renewable energy to reduce the dependence on fossil fuels. In accordance to the proposal, India’s total hydrogen demand is assumed to reach 11.7 million metric tonnes by 2029-2030 from 6.7 million metric tonne.

India’s plan will be to leverage scale for its ambitious green hydrogen plan in the favour of its renewable energy programme, facilitating the country to run the world’s largest clean energy programme.

As per the draft cabinet note, GHCO is expected to be increased from 0.15 per cent in 2023-24 to 0.25 per cent and 0.5 per cent in 2024-25 and 2025-26 respectively. Following, it might be increased to 1.5 per cent, 3.5 per cent and 6.5 per cent in the next successive years. According to reports, the draft cabinet note have been circulated by the ministry of new and renewable energy (MNRE) to the departments of fertilizers, heavy industries, science and technology, economic affairs, promotion of industry and internal trade, revenue, NITI Aayog along with minister of petroleum and natural gas, power, road transport and highway.

An MRNE official stated, “The proposal for mandating green hydrogen consumption by fertilizer producer and petroleum refineries is under consultation. Details of quantum of mandate share, required renewable energy capacity etc are yet to be firmed up.” As far as the data are concerned around 54 per cent or 3.6 mmt of country’s annual  hydrogen consumption of 6.7 mmt is used in petroleum refining and the remaining in fertilizer production.

The green hydrogen produced by electrolysis costs around Rs 350 per kg at present, and the plan is to reduce it to Rs 160 per kg by 2029-30. The government further aims to stretch the production linked incentives scheme for manufacturing electrolysers to produce green hydrogen.

Green hydrogen is produced by splitting water into hydrogen and oxygen with the use of an electrolyser that may b e powered up electricity from the renewable energy source like wind and solar.

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