A Bain & Company report says that green hydrogen can help India reconcile its two critical objectives of fueling fast growth and hitting the net-zero target by 2070
Green hydrogen in India can provide energy for sectors such as fertilisers, chemicals, refining, and iron and also save carbon emissions compared to fossil fuels, Bain & Company, in collaboration with the World Economic Forum, said.
In a detailed analysis of what it will take to make green hydrogen a credible energy pathway in India, the report said, "Green hydrogen can enable energy transition as India takes its net-zero journey towards 2070 while supporting its growing energy needs."
Hydrogen produced through water electrolysis and powered by renewable energy, known as green hydrogen, is considered a clean, flexible, and versatile energy carrier that can also help address the tension between energy supply and climate change, the report said.
India is currently the third-largest economy in the world in terms of energy needs, and the country's demand for energy is set to surge. The market is estimated to grow by 35 percent by 2030.
In 2022, India's energy import bill was pegged at $185 billion, which will rise if the country continues to supply its growing energy demand through traditional methods.
At the same time, India committed to achieving net zero by 2070 at the United Nations Climate Change Conference in Glasgow (COP26), held in 2021.
At the Glasgow summit, Prime Minister Narendra Modi said, "Today, the world believes that India is the only big economy that has delivered' on the Paris commitment. We are making every effort with determination." The Bain & Company report said green hydrogen is critical to helping meet India's energy security needs while reducing emissions in hard-to-abate sectors on the path to net zero.
The National Green Hydrogen Mission was launched by the government in early 2022 to spur green hydrogen production and consumption through incentive funding of roughly USD 2.3 billion between 2022 and 2030.
Currently, India produces 6.5 million metric tonnes per annum (MMTPA) of hydrogen, predominantly for use in crude oil refineries and fertiliser production.
Most of the country's current hydrogen supply is grey hydrogen, produced using fossil fuels, creating CO2 gas emissions.
The National Green Hydrogen Mission has set a target for producing 5 MMTPA of green hydrogen by 2030, equivalent to roughly half of India's projected overall hydrogen demand of 11 MMTPA. Green hydrogen production requires an ample supply of renewable energy for electrolysis.
According to the report, India's renewable energy potential can support its goals for green hydrogen growth but needs rapid capacity addition.
Also, there is limited on-the-ground traction for green hydrogen in the country, and key players have indicated that most are in a "wait-and-watch" phase.
According to the report, many expect sizeable production of green hydrogen to take effect beginning in 2027 and after.