• The government unveiled the first part of the Green Hydrogen / Green Ammonia Policy.

• Power and New and Renewable Energy Minister Raj Kumar Singh said the government is targeting production of 5 million tonnes of green hydrogen by 2030.

• The implementation of this policy will provide clean fuel to the common people of the country. This will reduce dependence on fossil fuels and also reduce crude oil imports. The objective is to make the country emerge as an export hub for green hydrogen and green ammonia.

• The fuels can be a game-changer for the energy security of India, which imports 85 per cent of its oil and 53 per cent of gas requirements.

Transition to green hydrogen and green ammonia

• There is an increased consensus around the world that concerted steps need to be taken to reduce global warming to levels less than 2°C and if possible to cap it at 1.5°C higher than pre-industrial levels. Various countries have pledged their Nationally Determined Contributions in order to ensure energy transition and reduce emissions. 

• Most large economies including India have committed to net zero targets. 

• Hydrogen as an energy carrier has a vital role in diversification of renewable energy across key economic sectors, by increasing the share of renewable energy in the electricity mix, enabling clean transportation and decarbonising industries like fertilisers, chemicals, petrochemicals, iron and steel.

• Oil refineries to steel plants require hydrogen to produce finished products. This hydrogen is currently generated using fossil fuels such as natural gas or naphtha. While hydrogen per se is carbon-free, the use of fossil fuels results in carbon emissions.

• India’s total hydrogen demand is expected to touch 11.7 million tonnes by 2029-30.

• Green hydrogen — also referred to as ‘clean hydrogen’ — is produced by using electricity from renewable energy sources, such as solar or wind power, to split water into two hydrogen atoms and one oxygen atom through a process called electrolysis. The hydrogen thus produced is used in the manufacturing process and oxygen is released into the atmosphere or bottled and sold to hospitals and industries that need it.

• A similar process also helps produce green ammonia.

• Green hydrogen has no carbon footprint. 

• Green hydrogen has innumerable applications. Green chemicals like ammonia and methanol can directly be utilised in existing applications like fertilizers, mobility, power, chemicals, shipping, etc. 

• Transition to green hydrogen and green ammonia is one of the major requirements for reduction of emissions, especially in the hard to abate sectors. The government of India has under consideration a number of policy measures in order to facilitate the transition from fossil fuel / fossil fuel-based feed stocks to green hydrogen / green ammonia, both as energy carriers and as chemical feedstock for different sectors.

• The National Hydrogen Mission was first announced in the Union Budget for 2021-22 in February for making a hydrogen roadmap for the country.

• Prime Minister Narendra Modi formally announced the launch of a National Hydrogen Mission on August 15, 2021 to accelerate plans to generate carbon-free fuel from renewables as he set a target of 2047 for India to achieve self-reliance in energy.

Highlights of the policy

• Companies will have the liberty to set up the capacity to generate electricity from renewable sources anywhere in the country by themselves or through a developer. They could also buy such power from the exchange. This electricity will be allowed to be wheeled, free of cost through open access of the transmission grid, to the plant where hydrogen is to be produced.

• The government will allow the green hydrogen/ammonia manufacturer to bank unconsumed renewable power, for up to 30 days, with the distribution company and take it back when required.

• The policy provides for a waiver of inter-state transmission charges for a period of 25 years for manufacturers of green hydrogen and green ammonia for the projects commissioned before June 30, 2025.

• The manufacturers of green hydrogen/ammonia and the renewable energy plant shall be given connectivity to the grid on a priority basis to avoid any procedural delays. To ensure ease of doing business, a single portal for carrying out all the activities, including statutory clearances in a time-bound manner, will be set.

• Manufacturers of green hydrogen/green ammonia would also be allowed to set up bunkers near ports for storage of green ammonia for export or use by shipping.

• To ensure ease of doing business a single portal for carrying out all the activities including statutory clearances in a time bound manner will be set up by the ministry of new and renewable energy (MNRE).

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