India Hydrogen Alliance Proposes Hydrogen Purchase Obligations to Drive Green Hydrogen Transition
Key Ideas
  • The India Hydrogen Alliance emphasizes the importance of Hydrogen Purchase Obligations (HPOs) in unlocking over USD 80 billion in hydrogen-related public investment commitments.
  • A proposed framework by IH2A aims to shift from grey hydrogen to green hydrogen, focusing on India's refinery and ammonia sectors to boost demand and reduce carbon emissions.
  • The suggested Contract-for-Difference (CfD) model, inspired by Japan, could financially support the transition to green hydrogen, with a budget of USD two billion aiding existing and new plants in meeting green hydrogen targets by 2030.
  • Implementing HPOs and the CfD framework could significantly accelerate India's decarbonisation efforts within hard-to-abate sectors like refineries and fertiliser plants.
The India Hydrogen Alliance (IH2A) has highlighted the critical role of Hydrogen Purchase Obligations (HPOs) in leveraging over USD 80 billion in hydrogen-related public investments. To align with national decarbonisation objectives, IH2A has proposed a strategic framework centered around HPOs to transition from grey to green hydrogen, particularly targeting India's refinery and ammonia sectors. By introducing HPOs, IH2A aims to stimulate demand within 47 existing and planned plants in these sectors, fostering a shift towards green hydrogen. The envisioned Contract-for-Difference (CfD) framework, mirroring Japan's successful model, is poised to provide financial backing for the transition. IH2A's Secretariat, Amrit Singh Deo, envisions leveraging the CfD approach to facilitate the green hydrogen transition in refinery and ammonia plants by 2030, ultimately reducing carbon emissions in these challenging sectors. IH2A estimates that a USD two billion allocation for the CfD mechanism could empower current plants to achieve a 10 percent green hydrogen off-take target, while new facilities could strive for 100% green hydrogen adoption by the end of the decade. By proposing HPOs and a CfD framework, IH2A aims to expedite India's decarbonisation journey, particularly within industries like refineries and fertiliser plants, contributing significantly to the country's sustainability goals.
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