India sets green hydrogen targets for shipping, oil & gas, fertilizer sectors

Priya Jestin

16-Jan-2023

MUMBAI (ICIS)–As part of its aim to achieve its net zero carbon emission goal by 2070, the Indian government has released a blueprint for its National Green Hydrogen Mission which has set consumption targets for various industries, including the oil and gas and fertilizer industries.

“The overarching objective of the mission is to make India the global hub for production, usage and export of green hydrogen and its derivatives,” according to a mission statement issued by the Ministry of New and Renewable Energy (MNRE) on 13 January.

The green hydrogen mission was approved by the government on 4 January which aims to provide incentives worth over rupee (Rs) 197.44bn ($2.4bn) for the development of 5m tonnes/year green hydrogen production capacity and an associated renewable energy capacity addition of about 125 gigawatts (GW) by 2030.

The south Asian nation is expected to have the capacity to produce 5m tonnes/year of green hydrogen by 2030, with the potential to reach 10m tonnes/year with growth of export markets, the MNRE said.

India consumes around 5m tonnes/year of grey hydrogen, of which around 99% is used in the petroleum refining industry and for the production of ammonia for fertilizers.

The government expects to develop its green hydrogen capacity in two phases beginning the fiscal year ending March 2023 (2022-23).

In the first phase, the government plans to notify mandatory green hydrogen consumption targets for big hydrogen consumers such as the oil and gas, fertilizer, and shipping sectors.

The government released its draft Green Hydrogen Mission statement in 2022 which stated that oil refineries would be required to replace 30% of their grey hydrogen use with green hydrogen by 2035, beginning with 3% in 2025.

Fertilizer production should run on 70% green hydrogen by 2035, beginning with 15% in 2025 and urban gas distribution networks must replace 15% of their fuel volume by 2035, starting with 5% in 2025.

The latest mission statement released on 13 January proposes to substitute all ammonia-based fertilizer imports with domestic green ammonia-based fertilizers by 2034-35.

For this, the government plans to initially set up two plants each of green hydrogen-based urea and diammonium phosphate (DAP).

Shipping and port operations are key sectors that are expected to drive the future green hydrogen demand and trade.

State-owned Shipping Corp of India (SCI) has been asked to retrofit at least two ships to run on green hydrogen derived fuels by 2027 as part of the country’s aim to build hydrogen-powered shipping lines.

SCI is India’s largest shipping line and owns and operates around one-third of the Indian tonnage, and services both national and international trades, as per the company website.

State-owned oil and gas companies like Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL), Bharat Petroleum Corp Ltd (BPCL), Oil and Natural Gas Corp (ONGC), among others, will be required to charter at least one ship each to be powered by green hydrogen or derived fuels by 2027.

Currently, these companies charter about forty vessels for transport of petroleum products.

The companies will be required to add at least one ship powered by green hydrogen or its derivatives for each year of the green hydrogen mission.

Additionally, there are plans to develop green hydrogen-fueled vessels, and also to set up refueling hubs at Indian ports.

The government expects to set up green ammonia bunkers and refueling facilities at least at one port by 2025 and plans to extend the facility to all major ports by 2035.

It also plans to develop supply chains and capabilities to support future exports of green hydrogen/ammonia from India.

In the initial phase, India expects to set up at least two green hydrogen hubs in the vicinity of oil and gas refineries and fertilizer plants.

Other plans include retrofitting older city gas distribution networks to use green hydrogen blended gas while new gas networks will be built to be compatible with high blend ratios of hydrogen, the government document stated.

The government also plans to explore the possibility of blending green hydrogen-based methanol/ethanol in auto fuels. It aims to set up necessary infrastructure and refueling stations along highways to ensure easy availability.

“This will enable hydrogen-fueled buses and commercial vehicles to ply on such routes,” the MNRE statement said.

The government also aims to increase the use of green hydrogen in steel production.

“Upcoming steel plants should be capable of operating with green hydrogen. Greenfield projects aiming at 100% green steel will also be considered,” it said.

Focus article by Priya Jestin

($1 = Rs81.24)

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