In Short : The India Hydrogen Alliance (IH2A) urges the government to mandate Hydrogen Purchase Obligations (HPOs) to meet the 2030 target of 1.5 million tonnes of green hydrogen. A 10% HPO for existing plants and 100% for new ones could achieve this goal. Without HPOs, investments worth \$80 billion risk becoming stranded, threatening India’s green hydrogen ambitions.
In Detail : Current green hydrogen project development is less than 1% of National Green Hydrogen Mission 5 million metric tonnes target by 2030 and $80 billion hydrogen investments is at risk without demand-side support, said India Hydrogen Alliance, an industry coalition of hydrogen players.
In a formal submission to the government proposing Hydrogen Purchase Obligations (HPOs) and demand side support for refineries and ammonia plants, the India Hydrogen Alliance (IH2A) has proposed 10% HPO for existing plants and 100% HPO for new plants by 2030, to achieve the NGHM 2030 target of 1.5 MT green hydrogen for domestic use in India.
India’s installed electrolyser base is currently less than 40 MW producing 10,600 million tonnes per annum of green hydrogen, which accounts for less than 1% of NGHM 2030 target of 1.5 MMT for domestic consumption.
The alliance stated that HPOs are critical for meeting NGHM 2030 targets and protecting the public announced hydrogen-related investments in excess of $80 billion in India. According to IH2A, without HPOs and demand support, planned hydrogen plants and supply projects risk becoming stranded assets.
IH2A has proposed HPOs to replace current grey hydrogen industrial offtake with green hydrogen, as feedstock in refinery and ammonia sectors, across 47 existing and proposed plants in India. The IH2A proposed HPOs are divided into the following:
Amrit Singh Deo, IH2A Secretariat lead said, “The government should consider mandatory purchase obligations to induce industrial domestic hydrogen offtake in refineries and ammonia sectors to meet NGHM 2030 targets. Mandated HPOs can replicate the success of RPOs from the renewable energy sector. Refineries and fertilisers should have a common hydrogen use and demand roadmap to aggregate demand and procure green hydrogen volumes of at least 10% till 2030.”
“Once HPOs are introduced, India can look at the Japan Contract-for-Difference (CfD) framework to part-fund the green hydrogen transition by refinery and ammonia sector by 2030, and reduce carbon emissions in these two hard-to-abate sectors,” he said.
IH2A estimates that an additional budget allocation for a $2 billion CfD framework, for refineries and fertilisers, can support the transition of all existing refinery and fertiliser plants to 10% HPO offtake and all new plants to 100% HPO offtake by 2030.
