Slow tenders, weak export demand hit India's green hydrogen plans | Current Affairs | Vision IAS

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Slow tenders, weak export demand hit India's green hydrogen plans

2 min read

India's Green Hydrogen Prospects

India's green hydrogen industry faces challenges with slower than expected demand in both domestic and export markets. Here are the key points surrounding India's green hydrogen plans and their current status:

Challenges and Current Scenario

  • Domestic and Export Market Dynamics:
    • Domestic tenders for green hydrogen are progressing slowly.
    • Export markets are affected by shifting geopolitical priorities.
  • Sector-Specific Developments:
    • Fertiliser companies and refineries were anticipated to drive demand but have not progressed significantly.
    • Only a few refineries, such as Indian Oil and Bharat Petroleum, have floated tenders after initial delays.
  • Cost and Demand Disparities:
    • There is a significant gap between the cost of production of renewable hydrogen/ammonia and what refineries and fertiliser manufacturers are willing to pay.
  • Policy and Incentives:
    • The India H2 Alliance (IH2A) is advocating for government mandates and incentives to bolster demand in sectors like refineries and fertilisers.

Export Market and Global Tendencies

  • The EU's H2Global tenders for green hydrogen imports are moving to the next phase.
  • India's focus on export-oriented projects has faced hurdles, with many not reaching final investment decisions.

Developments in Green Hydrogen Projects

  • Notable projects include: 
    • JSW’s imminent green hydrogen plant commissioning.
    • Hero Future Energies’ commissioned hydrogen plant for blending in PNG and LPG.
    • Larsen & Toubro’s shipment of an indigenous High-Pressure Alkaline Electrolyser for a project in Gujarat.
    • AM Green’s green hydrogen and ammonia plant FID closure in Andhra Pradesh.
  • The production linked incentive (PLI) scheme is dependent on sales milestones to be successful over five years.

Steel Industry and Green Initiatives

  • The steel sector remains committed to green initiatives, though overall capacity plans are impacted by global geopolitics.
  • JSW Energy’s green hydrogen project was set for commissioning, but JSW Steel’s readiness to utilize production is uncertain.

Upcoming Milestones

  • JSW Energy's green hydrogen unit was targeted for a March commissioning.
  • Reliance Industries plans to transition from grey to green hydrogen by 2025.
  • L&T shipped an electrolyser from Hazira for Kandla Port in March.
  • AM Green targets green ammonia production commencement in the latter half of 2026.
  • Adani Enterprises aims to start initial phase green hydrogen production by FY27.
  • Tags :
  • Green Hydrogen
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