Pioneering initiative

The Union cabinet’s decision to approve an outlay of Rs 19,744 crore for the National Green Hydrogen Mission is a pioneering step in the right direction but there are obvious challenges that need to be taken care of in order to ensure the achievement of mission’s objectives. A large chunk of the overall outlay — Rs 17,490 crore to be precise — has been earmarked for the Strategic Intervention for Green Hydrogen Transition (SIGHT) programme which is aimed at production of green hydrogen and manufacture of electrolysers. Basically, electrolysers are the apparatus where hydrogen is separated from oxygen in water. Of the remaining share of the outlay, Rs 1,466 crore has been earmarked for pilot projects, Rs 400 crore for Research and Development (R&D), and Rs 388 crore for other mission components. The decision to invest in R&D is particularly significant. With time, the budget for R&D should only increase if India aims at assuming a global leadership in green hydrogen production, and ensuring that it doesn’t come out as a dependent nation in terms of this future fuel. The core objective of the mission is to ensure production of at least five million metric tonnes of green hydrogen annually by 2030, in addition to electrolyser capacity of 60-100 gigawatt and renewable energy capacity of 125-gigawatt for green hydrogen. Also, the mission is expected to attract an investment of more than Rs 8 lakh crore and create around six lakh jobs. Apart from these stated objectives, one must also not forget that the success of the mission will automatically reduce India’s import-dependency for fossil fuels and curb greenhouse gas emissions. The abundance and efficiency of hydrogen, if combined with an element of sustainability, will work wonders for the world that is grappling with an energy crunch. The concept of green hydrogen seeks to achieve the same by deploying green fuels, instead of fossil fuels, to split oxygen and hydrogen of water via a process called electrolysis. The industry is still in a nascent stage. Currently, less than one per cent of global hydrogen production is made through the green route. Its novelty, however, is not a barrier to its acceptability. Green hydrogen finds mention in most of the prominent plans aimed at making a shift towards renewable energy. Major players including the European Union and the United States are already announcing massive budgets for this sector. India, too, is not lagging behind this time around. Topmost companies — both private and public — have taken the responsibility in their hands. The prospects, therefore, look promising. But we need to do a lot more in this direction. While the involvement of big companies is an encouraging sign, the government should consider rolling out appropriate production-linked schemes to ensure active participation of smaller units to make the mission a true success. Innovation will be the key in this regard and this can come through R&D and from grassroots-level units. The most prominent stumbling block for the mission will be to bring down the cost of production. Reports suggest that currently around Rs 300-400 is required to produce a kilogram of green hydrogen. For making India-produced green hydrogen competitive at a global level, this cost needs to be cut to one-third. To achieve this cost-cutting, it will be important to push the new market to greater competitiveness by creating an ecosystem that will be suitable for both big and small players. This is also the best way to promote innovation. The other major hurdle is more generic and deep-rooted — the structural flaws in India’s manufacturing sector. It is difficult to imagine the mission succeeding if the inherent flaws of the manufacturing sector are not dealt with appropriately. Rather than solely rooting on big companies, there is a need to fix the loopholes of the manufacturing sector in general. In sum total, learning lessons from the past, India has taken a bold step to play the leading role in the emerging green hydrogen market. While this decision is worth appreciating, no room should be left for loopholes. Much will depend on how the industry comes up with innovative ideas and to what extent the government is willing to loosen its purse strings for research and development in green hydrogen.