India to Impose Green Hydrogen Consumption Mandates on Refineries and Fertiliser Firms

The Ministry of New & Renewable Energy (MNRE) in India is preparing to introduce consumption mandates for green hydrogen in a push to decarbonise sectors like steel, fertilisers, chemicals, cement, and refineries. Power and New & Renewable Energy Minister, R K Singh, announced during the BloombergNEF summit that the proposal to set these mandates is currently being formulated.

Key insights:

1. Capacity: India boasts 5.8 million tonnes (MT) of green hydrogen production capacity. This can be translated to approximately 37 MT of green ammonia manufacturing capacity in different installation stages.
2. Cost Advantage: The costs associated with Renewable Energy (RE) in India are among the lowest worldwide. Singh mentioned that India’s low costs in setting up solar projects would ensure that its green hydrogen would also be the world’s most affordable.
3. Mandate Details: An amendment to the Energy Conservation Act empowers the government to establish mandates transitioning from fossil-based to non-fossil feedstock. Singh hinted at the possibility of requiring industries using grey hydrogen or grey ammonia to switch a portion to green alternatives, gradually increasing until it is entirely green.
4. National Green Hydrogen Mission: Earlier in January 2023, the National Green Hydrogen Mission was approved by the Union Cabinet. The mission, with a budget of ₹19,744 crore for FY24-FY30, aims to position India as a leading global hub for green hydrogen production, use, and export.
5. Future Projections: According to BloombergNEF’s New Energy Outlook report, by 2050, India’s domestic hydrogen demand could surge tenfold, reaching 53 MT H2. The major driver behind this increase would be the adoption of hydrogen-based furnaces in the steel industry, anticipated to demand 33 MtH2 by 2050. The report also notes that while currently, most hydrogen in India is produced from fossil fuels, by 2050, hydrogen generated by renewables will likely dominate.

This initiative signals India’s aggressive move towards a sustainable and green future, targeting not just energy production but also consumption patterns across industries.