Currently the third largest emitter of carbon dioxide in the world today, following China and the US, India needs to start moving now – and IH2A aims to greatly support this. An industry-led coalition of global and Indian companies, IH2A works with private sector partners, the government, and the public to ensure that costs of hydrogen production are brought down, and a local supply chain for hydrogen and industrial, power and transport sector demand is created.

IH2A hit the ground running this year (2022), having asked the Government of India for a $1bn hydrogen economy development fund, a public-private hydrogen taskforce and the creation of 10 national BharatH2 clusters as it looks to support a decarbonised future.

Here, in this exclusive interview, H2 View speaks to IH2A’s Secretariat about the formation of the alliance, India’s withstanding hydrogen economy, hopes for the future and the newly requested support from government.

H2 View (H2V): Firstly, for readers who may not be familiar with IH2A, can you tell us more about why and how the association was formed?

IH2A: IH2A was formed with the purpose of developing a green hydrogen economy and ecosystem in India. We as an industry body are committed to the creation of a national hydrogen roadmap and implementation plan, and aligning it to India’s energy transition and net-zero carbon pathway.

Its formation is significant because it brings together players from across the hydrogen value chain to develop the hydrogen economy and domestic supply chain to be created through partnerships with policy makers.

H2V: Can you give us a brief overview of India’s current hydrogen market and how IH2A hopes to support this?

IH2A: According to a report by TERI, in 2020, India’s hydrogen demand stood at six million tonnes per year. However, studies have shown a tremendous opportunity for growth in this area. It is estimated that by 2030, the hydrogen costs will be down by 50%. The demand for hydrogen is expected to see a five-fold jump to 28 million tonnes by 2050 where 80% of the demand is expected to be green in nature.

Many Indian companies (including IH2A members – Reliance, JSW) have already started announcing their plans to dip their toes in the green energy sub-sector. Although India has made significant strides in the green hydrogen space, the industry faces hurdles because of high cost of production. We at IH2A are committed to working closely with the government to carry out feasibility studies for GW-scale hydrogen projects in India. This is the natural step forward for India.

H2V: What developments would you like to see in India to highlight hydrogen’s full potential?

IH2A: To realise the full potential of hydrogen, and achieve GW scale necessary for commercialisation, the government and private sector have to collaborative closely and extensively.

IH2A conducted a series of multi-stakeholder consultations in 2021 to help create consensus on the challenges and required collaboration between industry, government, and investors, to develop a domestic hydrogen supply chain.

To summarise, India will need combined investments of about $25bn, from public and private sectors to create a domestic hydrogen supply chain with national installed electrolyser capacity of 25GW producing five million tonnes of green hydrogen by 2030 on the supply-side, and lowered cost of green hydrogen to decarbonise hard-to-abate industries such as steel, refineries, and fertiliser on the demand side. Coordinated public private actions will be required to develop the first generation of large-scale commercial hydrogen projects over the next decade.

H2V: What are IH2A’s key areas of focus?

IH2A: IH2A has identified six major workgroups:

Hydrogen production and electrolyser/fuel cell manufacturing,
Hydrogen storage and transport,
Hydrogen valleys, funding, and policy design,
Green steel and cement,
Green ammonia: refineries and fertilisers,
Heavy duty transport: ships, trucks, and railways.

While the first three focus on creating a sustainable hydrogen supply chain, the other three are focused on applications of hydrogen.

Taking this sort of value chain approach to building the hydrogen economy is the right way, we need multi-disciplinary think and open innovation to build the hydrogen economy in India. Through these workgroups IH2A members and partner organisations delve into industry discussions and co-create knowledge that would help government in accelerating the hydrogen ecosystem in India.

H2V: IH2A recently submitted a support request to the Government of India for a $1bn hydrogen economy development fund, a public-private hydrogen taskforce and the creation of 10 national BharatH2 clusters. Can you tell us more about this request?

IH2A: High costs of green hydrogen is a significant hurdle to faster adoption of hydrogen systems. Standalone incentives that encourage only supply side interventions for electrolyser manufacturing alone will be ineffective, unless matched with offtake commitments by government agencies and/or enterprises on the demand side.

IH2A suggests the creation of a Hydrogen Economy Development Fund (HEDF), with investments from the Government of India, multilateral agencies, global institutional investors, climate finance funds and the private sector, with the target to raise and deploy at least $1bn in hydrogen commercial scale projects in India by 2025.

Public-private hydrogen taskforce: Development of a national hydrogen economy and supply chain require close collaboration between industry and the government. IH2A suggests that the government and industry together constitute a public private Bharat H2 Taskforce that will act as the combined expert advisory group, bringing together national and global hydrogen expertise in hydrogen technology, project development, safety standards and funding, to all Indian stakeholders, working closely with the proposed hydrogen nodal office within MNRE. The creation of the public private Bharat H2 Taskforce is critical for meeting the national ambitions for hydrogen commercialisation and developing a domestic supply chain in India.

Creation of ten national BharatH2 clusters – Building on the global hydrogen development experience (from Japan, US, and Europe), India should prioritise few large-scale national Bharat hydrogen commercial-scale projects and clusters, that co-locate green hydrogen production with use-cases. This is important for scale economies, falling capital costs of GW-scale electrolysers, and avoid high cost of building out expensive hydrogen transport, storage, and refuelling infrastructure too early in the commercialisation cycle. Without GW-scale hydrogen projects, India will be unable to develop a domestic hydrogen supply chain and economy.

H2V: Why are the above requests so important? Can you please explain the benefits of each factor IH2A is asking support for?

IH2A: All requests to the government of India are inter-connected for developing a sustainable hydrogen ecosystem in India. The funding would serve as the fuel for developing large scale hydrogen projects. The creation of the taskforce would allow for a coordinated action between the public and private players and finally, the development of clusters would allow in scoping GW-scale national hydrogen projects that bring together consortia of renewable energy producers, hydrogen production plants and industrial use cases in specific clusters, as first-generation national hydrogen projects or Clusters. IH2A would like to suggest that the Government of India identify at least ten national hydrogen projects by end 2022, provide incentives to encourage feasibility studies for such projects within the Union Budget 2022-23, and invite industry consortia to bid for such national Bharat hydrogen projects.

H2V: IH2A estimates that India will need investments of approximately $25bn, from public and private sectors, to create a domestic hydrogen supply chain with national installed electrolyser capacity of 25GW. Do you think this will be achieved? 

IH2A: Availability of adequate public and private funding is the key factor to developing the domestic supply chain. India can achieve these milestones if global climate finance is available to develop the hydrogen economy in India. It will come down to how much of the committed $100bn climate finance funds committed annually from developed to developing markets, and whether India will be able to attract these funds to create a national hydrogen fund.

H2V: Why does India need the Government’s support to develop a hydrogen economy?

IH2A: Policy support and design is important for any new technology commercialisation. Policy certainty and stability are critical factors for investors and companies, when deciding commercialisation of hydrogen.

Additionally, creation of safety standards and codes are a critical first step. Without a uniform set of hydrogen-economy creating standards, it is difficult to see how the hydrogen value chain can be built in India.