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Hydrogen is all set to play a significant role in decarbonising energy system. Green Hydrogen has no carbon footprint though several challenges remain in its usage at wider level. National Hydrogen Mission was announced by the centre govt in this year’s Budget to tackle all these challenges.

Prospects of Hydrogen Economy:

  • Hydrogen is the lightest and first element on the periodic table. Since the weight of hydrogen is less than air, it rises in the atmosphere and is therefore rarely found in its pure form, H2.
  • At standard temperature and pressure, hydrogen is a nontoxic, non-metallic, odourless, tasteless, colourless, and highly combustible diatomic gas.
  • Hydrogen fuel is a zero-emission fuel burned with oxygen. It can be used in fuel cells or internal combustion engines. It is also used as a fuel for spacecraft propulsion.
  • It can be produced from renewable sources of energy such as solar and wind. At present, there are a number of ways to produce hydrogen, but the most common method is natural gas reforming and electrolysis.
  • Its use can reduce CO2 related emissions significantly and decarbonise the entire value chain, enabling reduced emissions and climate change threats.
  • Hydrogen can also bridge the gap between supply and demand, in both a centralized or decentralized manner, thereby enhancing the overall energy system flexibility.
  • Hydrogen can be used to meet both seasonal and daily supply-demand mismatch in the case of renewables.
  • At present, the current global demand for hydrogen is 70 million metric tons, most of which is being produced from fossil fuels– 76% from natural gas and 23% from coal and remaining from the electrolysis of water– consumes 6% of the global natural gas and 2% of the global coal. This results in CO2 emissions of around 830Mt/year out of which only 130Mt/year is being captured and used in the fertilizer industry.
  • Much of the hydrogen produced is used for oil refining (33%), ammonia (27%), methanol production (11%), steel production via DRI (3%) and others.

Need of using hydrogen as an energy source:

  • India with a population of approx. 1.3 billion is the second most populous country and the third largest economy (measured by purchasing power parity) in the world.
  • With significant decrease in poverty level, increased energy access for citizens, availability of cleaner cooking fuel and growing penetration of renewables, the country is advancing on a faster growth path.
  • And while proposed end-use sectors include steel and chemicals, the major industry that hydrogen has the potential of transforming is transportation which contributes a third of all greenhouse gas emissions, and where hydrogen is being seen as a direct replacement of fossil fuels, with specific advantages over traditional EVs.
  • Despite its promise, hydrogen technology is yet to be scaled up.

India and hydrogen economy:

  • Currently, India consumes about 6 million metric tonnes of grey hydrogen per annum, which is about 8.5 per cent of the global hydrogen demand.
  • India has a huge edge in green hydrogen productionowing to its favourable geographic conditions and presence of abundant natural elements.
  • The government has given impetus in scaling up the gas pipeline infrastructure across the length and breadth of the country, and has introduced reforms for the power grid, including the introduction of smart grids. Such steps are being taken to effectively integrate renewable energy in the present energy mix.
  • Capacity addition to renewable power generation, storage and transmission, producing green hydrogen in India can become cost effective which will not only guarantee energy security, but also ensure self-sufficiency gradually.
  • In rural India, where there is no access to the grid, the use of hydrogen can provide energy services.
  • India’s goal of attaining 175 GW of renewable energy capacity by 2022 and to decarbonise by 2050 got an impetus in the Union Budget 2021-22.
  • In October 2020, Delhi became the first Indian city to operate Hydrogen-enrichedCNG (H-CNG) buses in a six-month pilot project.
  • The Government of India is planning to focus on five key areas: (a)Research and Development (b) Demand creation (c) how to use it in the industry (d) how to create an eco-system (e) how to bring it on board along with international partnerships.

Policy Challenges:

  • One of the biggest challenges faced by the industry for using hydrogen commercially is the economic sustainability of extracting green or blue hydrogen.
  • The technology used in production and use of hydrogen like Carbon Capture and Storage (CCS)and hydrogen fuel cell technology are at nascent stage and are expensive which in turn increases the cost of production of hydrogen.
  • Maintenance costsfor fuel cells post-completion of a plant can be costly.
  • The commercial usage of hydrogen as a fuel and in industries requires mammoth investment in R&D of such technology and infrastructurefor production, storage, transportation and demand creation for hydrogen.

Measures needed:

  • At this juncture, with a calibrated approach, India can uniquely position itself to take advantage with increasing investment in R&D, capacity building, compatible legislation, and the opportunity for creation of demandamong its vast population. Such initiatives can propel India to become the most favoured nation by exporting hydrogen to its neighbors and beyond.
  • Proactive industry collaboration with the government is key to creating a hydrogen economy in India.
  • This will help bring best-in-class hydrogen technology, equipment, and know-how to create a hydrogen supply chain in India — in many cases, these could be “Made in India”.
  • By prioritising national hydrogen demonstration projects, innovations to further reduce the cost of hydrogen will become prominent locally.
  • A robust policy framework akin to the one that guided the country’s solar revolution could lead to an increase in production and demand of this green fuel.
  • The Government of India should consider setting up a multi-agency mission to bring multiple ministries, private industry and academia together in a partnership to scale up the deployment of hydrogen across sectors and industries.
  • Having a clear mid-term and long-term target inspires confidence in the private sector to make their investments in a new energy source.
  • Tax benefits that solar and wind receive should be extended to all players in the green hydrogen ecosystem.
  • In the short term, the price of hydrogen generated through steam methane reformation should be capped.
  • Generating hydrogen from biomass should also be incentivised as it also has the potential to increase farmer incomes.
  • India should ramp up international collaborations for more effortless transfer of technology and resources related to hydrogen.
  • Low solar prices coupled with pragmatic policies can help India take a leadership position in driving the global hydrogen economy.


  • The immediate need here is to identify the key long-term goals and the step to achieve those goals.
  • The building up of policies, infrastructure and skills will help in wider acceptance, reducing perceived risks, enhancing confidence, increased investments, lowering costs.
  • Thus, the major challenges we need to finally meet is scaling up, cost reduction, increased adoption and sustainable growth of hydrogen-based technologies.
  • The role that Government can play is towards creating a long-term policy framework which could build up confidence in private investment, create market demand with policy interventions, develop standards and regulations which should not hurdle the growth, provide enhanced R & D support.
  • Green hydrogen is one of the most promising fuels in the efforts to reduce carbon emissions.
  • Green hydrogen energy is vital for India to meet its Nationally Determined Contributions and ensure regional and national energy security, access and availability. Hydrogen can act as an energy storage option, which would be essential to meet intermittencies (of renewable energy) in the future.