India Hydrogen Alliance Urges Government for Hydrogen Purchase Obligations to Meet Green Hydrogen Targets
Key Ideas
- India Hydrogen Alliance warns that current green hydrogen projects are far below the 2030 targets, posing a risk to the $80 billion hydrogen investments in India.
- The alliance recommends implementing Hydrogen Purchase Obligations (HPOs) to drive demand and ensure the achievement of National Green Hydrogen Mission's (NGHM) goals.
- By proposing HPOs with varying percentages for existing and new plants, IH2A aims to shift industrial offtake from grey to green hydrogen in the refinery and ammonia sectors, aligning with carbon reduction objectives.
- IH2A suggests a Japan Contract-for-Difference (CfD) framework to subsidize the green hydrogen transition, estimating a $2 billion budget allocation to facilitate the shift in hydrogen demand in the specified sectors by 2030.
The India Hydrogen Alliance, a coalition of hydrogen industry players, has raised concerns over the slow progress in green hydrogen projects compared to the ambitious targets set by the National Green Hydrogen Mission (NGHM) for 2030. With less than 1% progress towards the 5 million metric tonnes target, the $80 billion hydrogen investments in India face uncertainties without adequate demand-side support.
The alliance has proposed the introduction of Hydrogen Purchase Obligations (HPOs) to stimulate demand and ensure the realization of NGHM's objectives. They recommend setting different HPO percentages for existing and new plants, aiming to transition industrial offtake from grey to green hydrogen within the refinery and ammonia sectors, which are crucial for carbon reduction efforts.
IH2A suggests that HPOs can mirror the success of Renewable Purchase Obligations (RPOs) in the renewable energy sector, emphasizing the need for a cohesive hydrogen use and demand roadmap for refineries and fertilizers to collectively procure green hydrogen volumes.
To facilitate this transition, IH2A proposes implementing a Japan Contract-for-Difference (CfD) framework, with an estimated $2 billion budget allocation, to financially assist existing and new plants in meeting the HPO targets by 2030 and reducing carbon emissions in these challenging sectors.
Topics
Investing
Energy Transition
Green Energy
Carbon Reduction
Economic Impact
Policy Advocacy
Investment Risk
Industry Coalition
Government Proposal
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