Green Hydrogen Demand Assessment

Net ZGelorobaRl oCaodrpmoraaptefoRreCneowrpaobrlae tes
RREPORT
EPORT
IIND
ND
2024
Green Hydrogen Demand

Assessment For C&I
Consumers in India
11 |
CREDITS
© WWF-India 2024
Published by WWF-India
Reproduction is authorized, provided the source is acknowledged, save where otherwise stated.
Authors:
WWF-India: Apoorva Santhosh, Kalyan Verma, Vishal Dev
ICF India: Sushmita Ajwani, Vineet Kumar, Karuna Pandey
Special thanks:
WWF-India: Ravi Singh, Sejal Worah, Suresh Babu
Thanks for Review to:

Rajesh Kumar Mediratta, MD & CEO, Indian Gas Exchange (IGX)
Rohit Bajaj, Executive Director - Business Development, Strategy and Regulatory Affairs, Indian Energy Exchange (IEX)
Pramod Singh, President - Regulatory & Commercial, India Power
Edited by:
Preeti Lourdes John, independent editor and editorial consultant
Report Designed by:

Simijaison Designs
Image:
Cover Image: Copyright Credit © Getty Images / pidjoe / WWF-US
Disclaimer
This report has been prepared by WWF-India with research and inputs from ICF India, based on publicly available in-
formation and data gathered from different sources. WWF-India and ICF India disclaim any and all liability for the use
that may be made of the information contained in this report. While the experts and organizations listed in the acknowl-
edgements and appendix have provided inputs for the development of this report, their participation does not necessarily
imply endorsement of the report’s contents or conclusions. The tables and charts in the report are based on the available
data accessed from various reliable sources. The sources have been duly recognized in the report. Further, the views in the
document do not necessarily reflect those of WWF-India or ICF India.
Green Hydrogen Demand Assessment For C&I Consumers in India
Contents
List of Figures 4
List of Tables 5
Abbreviations 6
Executive Summary 9
1. Introduction 15
2. Hydrogen Demand in India 17
2.1 Sectors driving hydrogen demand 17
2.2 Regional concentration of demand centres 19
2.3 Key Consumers and Suppliers 20
3. Hydrogen Demand Projection 23
3.1 Natural gas market in India: Historical and forecasted growth 23
3.2 Industries dependent on hydrogen 24
3.3 Future demand for hydrogen and key growth drivers (C&I) 26
3.4 Identifying green hydrogen ‘early adopter’ sectors 50
3.5 Ongoing developments, tie-ups, and pilot projects 52
4. Hydrogen production technologies and pricing 56
4.1 Hydrogen production methods 56
4.2 Cost of producing hydrogen through SMR method 57
4.3 Cost of producing hydrogen in Chloralkali plants 58
4.4 Cost of producing green hydrogen 59
4.5 Cost viability of green hydrogen for C&I players in India 61
5. Infrastructure requirements for hydrogen supply 63
5.1 Central Plant and Storage 63
5.2 Transportation 66
5.3 Modes of hydrogen supply 70
6. India’s policy ecosystem and the impact on green hydrogen adoption 72
6.1 Green Hydrogen Policy, 2022 72
6.2 National Green Hydrogen Mission 73
6.3 Review of current regulations for supply of hydrogen (PESO rules) 74
7. Policy recommendations 77
7.1 Key issues/gaps 77
7.2 Stakeholder Consultations 78
7.3 Policy Recommendations 81
3
List of Figures
Figure 1: Hydrogen Consumption in India 17
Figure 2: Hydrogen Demand Concentration Across India 19
Figure 3: Types of Hydrogen Users 20
Figure 4: Natural Gas Market Growth In India 23
Figure 5: Overall Hydrogen Demand: Realistic Scenario 27
Figure 6: Overall Hydrogen Demand- Optimistic and Conservative Scenario 27
Figure 7: Projected Ammonia Demand for Domestic Usage Including Imports (MMTPA) 29
Figure 8: Ammonia Production Requirement – Realistic Scenario (MMTPA) 30
Figure 9: Ammonia Production Requirement – Conservative Scenario (MMTPA) 31
Figure 10: Ammonia Production Requirement – Optimistic Scenario (MMTPA) 31
Figure 11: Hydrogen Demand from Ammonia (MMTPA) 32
Figure 12: Refinery Capacity Forecast (MMTPA) 34
Figure 13: Total Hydrogen Demand in Refineries (MMTPA) 36
Figure 14: Hydrogen Demand Projection in Steel and Iron Sectors (MMTPA) 38
Figure 16: Status of Hydrogen Peroxide usage in India (MMTPA) 39
Figure 15: Status of Methanol Usage in India (MMTPA) 39
Figure 17: Total Hydrogen Demand from Chemicals (MTPA) 41
Figure 18: Hydrogen Demand Scenarios 42
Figure 19: Total cost of ownership projection till 2050 43
Figure 20: Total Road Transport Hydrogen Demand (MTPA) 44
Figure 21: Total Natural Gas Demand in Large Industries (MMSCMD) 45
Figure 22: Hydrogen Demand in Large Industries (MMTPA) And Blending % 46
Figure 23: CGD Network in India (MoPNG and PPAC stats) 47
Figure 24: Expected Natural Gas Demand Without H2 Blending (SCMD) 48
Figure 25: Consolidated Hydrogen demand in CGD (MTPA) 48
Figure 26: Forecasted Sectoral Hydrogen Demand Till 2030 49
Figure 27: Volume Replacement in Fertiliser 51
Figure 28: NG Volume Replacement in Refinery 52
Figure 29: Ng Volume Replacement in CGD 52
Figure 30: Grey Hydrogen Production Cost Breakdown 58
Figure 31: Chlor-alkali manufacturing process 58
Figure 32: Green Hydrogen Cost Projection at Factory Gate in India 61
Figure 33: The Hydrogen Value Chain 63
Figure 34: Hydrogen Storage Technologies 64
Figure 35: Hydrogen Transportation Technologies 66
Figure 36: SPERA LOHC technology from Chiyoda Corporation 69
Figure 37: LOHC Technology of Hydrogenious 69
Figure 38: Modes of Hydrogen Supply73F73F 71
4
List of Tables
Table 1: Industry-Wise Hydrogen Consumption (MMT) 18
Table 2: Hydrogen Usage in Different Industries 18
Table 3: List of Key Consumers 21
Table 4: Key Merchant Suppliers in India 22
Table 5: Use of Hydrogen in Industries 24
Table 6:Forecasted Hydrogen Demand by Scenario (until 2030) 26
Table 7: Incentives provided to fertiliser industry by GoI 28
Table 8: Scenarios for Ammonia Production Requirement till 2030 30
Table 9: Scenarios for Forecasting Hydrogen Demand from Refineries 33
Table 10: Calculated Values for Refining Capacities (MMT) 33
Table 11: Calculated Values for Hydrogen Demand in Refinery (MMTPA) 35
Table 12:Assumptions for Hydrogen Demand in Iron and Steel Sector for Different Scenario 37
Table 13: Assumptions for Hydrogen Demand in Chemicals Sector for Different Scenarios 40
Table 14: Hydrogen Demand for Each Chemical (MTPA) 40
Table 15: Scenarios for Assessing HCNG Demand 42
Table 16: Number of Industries 44
Table 17: Assumptions on Hydrogen Demand in Large Industries 45
Table 18: Key Assumptions 47
Table 19: Proposed Trajectory for replacement of Natural Gas to Green Hydrogen 50
Table 20:Green Hydrogen Projects Under Development 53
Table 21: Announcement on Segment-Wise Major Collaborations 54
Table 22: Production Processes of Hydrogen 56
Table 23: Characterisation of Electrolyser Technologies 59
Table 24: Key Assumptions for Green Hydrogen Cost Projection 60
Table 25: Type of Storage Vessels 65
Table 26: Hydrogen Storage Infrastructure 65
Table 27 : Key Gaps Within Hydrogen Regulatory Framework 77
Table 28: Policy Recommendations 81
Table 29: Recent Initiatives of Government of India 84
5
Abbreviations
Acronym Definition
AEM Anion exchange membrane
BF-BOF Blast furnace-Basic oxygen furnace
CAGR Compound Annual Growth Rate
CAPEX Capital Expenditure
CCOE Chief Controller of Explosives
CCOE Chief Controller of Explosives
CCUS Carbon Capture, Utilisation and Storage
CCUS Carbon capture, utilisation and storage
CGD City Gas Distribution
CII Confederation of Indian Industry
CNG Compressed Natural Gas
DAP Di-ammonium Phosphate
DRI Direct Iron Reduction
EV Electric Vehicle
FCEV Fuel Cell Electric Vehicle
FCEV Fuel cell electric vehicle
FG Float Glass
GCR Gas Cylinder Rules
GDP Gros Domestic Product
GH Green Hydrogen
GoI Government of India
H 2O 2 Hydrogen Peroxide
HCNG Hydrogen Compressed Natural Gas
HCNG Hydrogen compressed natural gas
HCV Heavy Commercial Vehicle
HDV Heavy Duty Vehicles
HFCV Hydrogen Fuel Cell Vehicle
HGU Hydrogen Generation Unit
HGU hydrogen generation units
IEA International Energy Agency
ISTS Inter State Transmission System
KTA Kilo Tonne per Annum
LCOS Levelised Cost of Storage
LCV Light Commercial Vehicle
LNG Liquified Natural Gas
LOHC Liquid Organic Hydrogen Carriers
LPG Liquified Petroleum Gas
MCH methylcyclohexane
MMSCMD Million Metric standard Cubic Meter Per Day
MMT Million Metric Tonne
MTPA Million Tonne Per Annum
OPEX Operating Expenditure
PEM Proton Exchange Membrane
6
PESO Petroleum and Explosives Safety Organisation

PNGRB Petroleum and Natural Gas Regulatory Body
PPAC Petroleum Planning & Analysis Cell
R&D Research & Development
REC Renewable Energy Certificate
REDE Renewable Energy Demand Enhancement
RLNG Regassified Liquefied Natural Gas
RPO Renewable Purchase Obligation
SMR Steam Methane Reforming
TCO Total Cost of Ownership
VGF Viability gap funding
VKT Vehicular Kilometres Travelled
7
© Getty Images/iStockphoto / onurdongel / WWF-US
8
Executive summary
Executive Summary
WWF India and the Confederation of Indian Indus- Key objective of the study
try (CII) initiated the Renewable Energy Demand En-
hancement (REDE) initiative in India in 2018. REDE The key objective of the study was to formulate policy
represents a collaboration among corporate purchas- recommendations to promote the greater adoption of
ers with the aim of enhancing their acquisition of re- green hydrogen. Key tasks of the study included:
newable energy and propelling efforts to overcome
obstacles that are greatly impeding the growth of de- • Researching India’s current hydrogen market
mand in this sector. It also focuses on expanding the
scope of corporate renewable energy procurement, • Identifying key and/or priority industries where
building capacity, influencing policy, networking and hydrogen can replace natural gas
and peer-to-peer learning among members.
• Assessing the current pricing of hydrogen and
As the third largest carbon dioxide emitter world- future pricing of green hydrogen, and its viability
wide, India has a major role to play in curbing the
impact of carbon emissions on the environment. • Understanding the policy ecosystem and its im-
The government of India (GoI) has been proactive pact on green hydrogen adoption
and has committed to achieve net zero by 2070. The
government has also recognised the potential role of • Forecasting future demand for hydrogen and key
green hydrogen in achieving this net zero target, es- growth drivers (till 2030), based on an analysis
pecially in decarbonising the ‘hard to abate’ sectors. of current growth patterns
The National Green Hydrogen Mission document re-
leased by the GoI in January 2023 comprehensively • Estimating the cost of green hydrogen that would
discusses tapping this potential. be considered viable by C&I players for different
applications
Commercial and industrial (C&I) consumers account
for approximately 50 percent1 of the overall electric- • Understanding the green hydrogen market from
ity consumption in India, and, as such, have the po- the production and manufacturing perspective
tential to play a vital role in achieving India’s green
hydrogen objectives and net zero targets. Therefore, Hydrogen demand in India
it is crucial for policymakers to consider the chal-
lenges faced by the C&I segment while drafting im- Hydrogen consumption in India has increased grad-
plementation guidelines for green hydrogen policies ually at a compound annual growth rate (CAGR) of
over the next decade. In this regard, WWF India in 2.9 percent, from 5.59 million metric tonne (MMT)
partnership with ICF commissioned a study to un- in 2015 to 6.55 MMT in 2021.2 Historically, refineries
derstand the trends for hydrogen procurement in and fertilisers (ammonia) have been the major driv-
India and to forecast when green hydrogen is likely ers of hydrogen demand. In 2021, the sectors con-
to be commercially viable for C&I use in the country. tributed over 80 percent of India’s overall hydrogen
1 https://www.mospi.gov.in/sites/default/files/publication_re- 2 ICF primary research

ports/Energy_Statistics_2023/EnergyStatisticsIndia2023.pdf
9
consumption, with the remaining driven by chemical tors, such as chemicals, steel and iron, CGD blending,
(methanol and hydrogen peroxide), steel, optic fiber optic fibre, float glass, and hydrogen fuel cell vehicle
and float glass industries. (HFCV) will also contribute to the demand for hydro-
gen, accounting for the remaining demand in 2030.
In terms of the regional concentration of demand, Further transition from hydrogen to green hydrogen
India’s western region accounts for approximate- is expected to be driven by cost effectiveness and the
ly 52 percent of the country’s total hydrogen con-
3
availability of green hydrogen.
sumption. This is attributable to the concentration
of large refineries and fertiliser plants in the region. In a step towards sustainability and to promote the
The states of Maharashtra and Gujarat are the ma- adoption of green hydrogen, the GoI approved the
jor drivers of hydrogen demand. Further, in FY2021, National Green Hydrogen Mission in January 2023
approximately 90 percent of the hydrogen consump- to replace hydrogen produced from fossil fuels with
tion in India was through the captive route, and only green hydrogen in ammonia production and petro-
10 percent of the hydrogen consumption was through leum refining, blending green hydrogen in CGD sys-
merchant market. 4
tems, using green hydrogen to produce steel, and re-
placing fossil fuels with green hydrogen-derived syn-
To assess future hydrogen demand in India, it is cru- thetic fuels, such as green ammonia and green metha-
cial to determine whether it is being used as a direct nol in various sectors, such as mobility, shipping, and
feedstock or as a heating fuel, and further evaluate aviation. Further, the mission aims to build capabili-
the viability of retrofitting existing infrastructure ties to produce at least 5 MMT of green hydrogen per
or creating new infrastructure to fulfil the viable annum by 2030, with the potential to reach 10 MMT
demand. Hydrogen serves as a feedstock in indus- per annum as the export market grows. Considering
tries such as refineries, ammonia production, and this, the sectors with the potential to substitute fossil
the manufacturing of chemicals like methanol and fuel-based hydrogen with green hydrogen (such as
hydrogen peroxide, as well as in the iron and steel ammonia, refinery, and CGD) can be viewed as the
sectors. It has lesser applications in float glass pro- early adopters of green hydrogen.
duction and oil hydrogenation. On the other hand,
hydrogen is employed as a fuel in the transportation, Further, the use of green hydrogen will likely have a
city gas distribution (CGD), and significant indus- direct impact on the demand for natural gas, as it can
tries, particularly in power generation.(-minor). In act as a substitute for the latter. By 2030, the demand
the past, the primary source of hydrogen demand for green hydrogen in non-urea fertiliser production
were sectors utilising hydrogen as a feedstock, and it will be equivalent to 1.55 MMSCMD of natural gas,
is anticipated this trend is expected to persist in the while the demand for green hydrogen in refineries
near future. will be equivalent to the natural gas demand of 16.62
MMSCMD. The demand for green hydrogen in CGD
The overall demand for hydrogen in India is expected will be equivalent to the natural gas demand of 5.04
to be in the range of 10 MTPA and 14 MTPA by 2030, MMSCMD.
with the ammonia and refinery industries projected
to account for approximately 78 percent to 81 per- Hydrogen supply in India
cent of the hydrogen demand until 2030. Other sec-
Given the captive nature of consumption, fertiliser,
petroleum refining, and chemical industries are the
3 ICF research major producers of hydrogen. It is produced primar-
4 ICF research
ily through steam methane reforming (SMR) of nat-
10
Executive summary
ural gas, making it a ‘grey hydrogen’. Additionally, ing area, leading many consumers to install their
hydrogen is also produced as a by-product in the in- own hydrogen generating units. Some of the most
dustries that meet the merchant requirements. used transportation modes are:
Hydrogen sold under the merchant route is either • Cryogenic liquid tanker trucks or gaseous tube
through direct supply contract by the producer, trailers serve as the means for conveying hy-
through traders using bilateral agreements, or spot drogen from its production site to the intended
booking. The direct supply radius is usually within destination, whereas pipelines are the preferred
120 km, and transportation is mainly through trucks choice for areas characterised by significant and
equipped with cylinder banks, while some suppli- consistent demand.
ers use pipelines for smaller distances. Major play-
ers in this segment include Grasim Chemicals, DCM • Gaseous hydrogen must be compressed to the
Shriram, Gujarat Alkalies and Chemicals Limited, required pressure level prior to transportation
Tata Chemicals Limited, and GHCL Ltd. Indirect through pipelines or tube trailers.
suppliers have a supply radius of around 500 km,
and they use similar transportation methods as di- • Liquid hydrogen is typically transported through
rect suppliers. Some traders have also established liquefaction plants, and it is useful for high-vol-
onsite production units for large captive consumers. ume transport when pipelines are unavailable.
Key players in this segment include Linde India, Inox
Air Products, and Bhuruka gases. In India, hydrogen is transported to very short dis-
tances through gaseous tube trailers. A few compa-
Infrastructure requirements to ensure hydrogen nies have their own dedicated hydrogen pipelines,
supply but the length is below 2 km. A significant amount
of research and development (R&D) is required to
The ecosystem of hydrogen demand is governed by evolve the transportation network of hydrogen com-
efficient infrastructure at the level of production and pared to natural gas.
distribution. The hydrogen value chain consists of
three key components: hydrogen production, hydro- It is also important to note that while hydrogen pro-
gen storage and distribution, and hydrogen utilisa- duction and utilisation stages are currently driven by
tion. the willingness of stakeholders to shift to hydrogen,
cost-effectiveness, safety, and sustainability are crit-
Hydrogen distribution infrastructure can be further ical for the distribution and storage stages. Further,
classified into two categories: central plant and stor- each step of the hydrogen value chain is currently in
age, and transportation. the developmental stage. However, of the three stag-
es, hydrogen distribution and storage are the most
The storage of hydrogen is significantly challenging nascent.
compared to other fossil fuels due to its low density
and high volatility. At present, it is stored mainly as Hydrogen production technologies and pricing
a compressed gas or liquid. In some countries, pilot
studies have been conducted to evaluate storing hy- Hydrogen can be produced through various process-
drogen in salt caverns. In India, hydrogen is stored es. These include thermochemical processes such
mainly as a compressed gas. as SMR, biomass gasification, biomass-derived liq-
uid reforming, and solar thermochemical hydrogen;
The transportation of hydrogen is another challeng- electrolytic processes; photoelectrochemical pro-
11
cesses such as direct solar-water splitting methods; ton exchange membrane electrolysis process is cal-
and biological processes, such as microbial biomass culated at US$3.9/kg, whereas for the alkaline elec-
conversion and photobiological methods. trolysis process, it is US$3.6/kg. By 2030, the cost
of production is expected to reduce to US$2.7/kg for
Among all production processes, SMR stands out as proton exchange membrane electrolysis and US$2.5/
the most well-established method. In this process, kg for the alkaline electrolysis process.
an external heat source supplies high-temperature
steam for the reforming reaction that converts a gas Cost viability of green hydrogen in India for C&I
source, like methane, into hydrogen and carbon di- players
oxide. In this process, capital expenditure (capex)
accounts for about 50 percent of the total production The high production cost of green hydrogen poses a
cost. Assuming natural gas costs US$9/MMBTU, the significant challenge to its widespread adoption in
production cost of hydrogen through the SMR pro- the C&I sector. To overcome this obstacle and facil-
cess is around US$2/kg (US$17.58/MMBTU). itate a smooth transition towards green hydrogen,
significant investments from corporate groups and
In the context of India, hydrogen production is most- additional incentives from the government and reg-
ly for captive consumption, and the by-product of ulators are necessary. Ultimately, to achieve global
the chloralkali plant is sold in the merchant market. viability and competitiveness, the cost of green hy-
Therefore, thus far, the price of regassified liquefied drogen must be reduced to US$2/kg or lower, nearly
natural gas (RLNG) has not shown a significant cor- half of its current price.
relation with the cost of hydrogen. At present, hydro-
gen from chloralkali plants is being sold at a price of Key issues and gaps for development of the hydrogen
₹220/kg (US$2.7/kg) in the merchant market. market in India
Green hydrogen production and pricing The GoI’s recognition of green hydrogen as a
next-generation fuel and its initiative in drafting pol-
The production of green hydrogen involves the icies and missions is a proactive approach to estab-
process of electrolysis, where water is split using lishing green hydrogen as a key energy source. This is
electricity from renewable sources. Although the basic a significant step towards achieving a sustainable and
principle of water electrolysis is the same across all carbon-neutral future. The GoI’s efforts to promote
technologies, there are different physiochemical and green hydrogen as a viable alternative to traditional
electrochemical aspects involved in the construction fuels are commendable, and stakeholders in the in-
of each electrolyser. As a result, there are four types dustry are optimistic about the potential impact of
of electrolysis technologies currently in use: alkaline these policies on the growth and adoption of green
electrolysis, proton exchange membrane electrolysis, hydrogen. However, there are still some gaps that
anion exchange membrane electrolysis, and solid need to be plugged for the sustainable growth of the
oxide electrolysis. sector.
The alkaline electrolysis process is considered to be Some of the key gaps in the regulatory and policy
the most established technology, while the proton framework are:
exchange membrane electrolysis process is rapidly
developing and is expected to be widely used in the • A lack of clarity in the institutional structure re-
future. In terms of the cost of production, the current garding ministries/departments for matters re-
cost of green hydrogen production through the pro- lating to green hydrogen.
12
Executive summary
• Lack of concrete measures towards creating de- Following the individual stakeholder consultations,
mand for green hydrogen. a roundtable discussion was organised with
policymakers, developers, suppliers, and consumers.
• Absence of roadmap for the reduction in cost of The roundtable was centred on the critical
production of green hydrogen. challenges that could hinder the transition to green
hydrogen. The discussions and deliberations in the
• Insufficient infrastructure development for the roundtable highlighted the major gaps and policy
storage and transportation of hydrogen. recommendations for the desired development of
the green hydrogen ecosystem in India. These gaps
• The need to promote funding for the develop- and recommendations revolved around the current
ment of the hydrogen ecosystem. state of policy development in India, the cost of green
hydrogen production, infrastructure development
• Lack of critical guidelines on safety in hydrogen for storage and transportation, and the creation of an
storage, transport, distribution, and fuel cells. ecosystem to promote investments and funding for
green hydrogen.
Stakeholder consultations
Policy recommendations
Stakeholders were consulted to understand the mar-
ket sentiment towards the adoption of green hydro- After conducting a comprehensive study of the hy-
gen. The key requirements highlighted during the drogen ecosystem in India and obtaining feedback
consultations were: from stakeholders, a series of policy recommenda-
tions were formulated. These are aimed at address-
• The introduction of a carbon tax and the creation ing specific areas, such as R&D, institutional struc-
of a green hydrogen certification market. ture, demand creation, the cost of green hydrogen
production, transportation and storage, and the spot
• Incentives to reduce price of renewable energy. market for hydrogen.
• Updated guidelines from the Petroleum and Ex- The key recommendations are:
plosives Safety Organisation (PESO) for the stor-
age, transportation, and usage of hydrogen. • Clearly defining a nodal ministry, inter-ministe-
rial governance, and regulatory structure.
• Advocacy for hydrogen produced from brine to
be defined as green hydrogen. • Introducing a green hydrogen obligation for con-
sumers (similar to that of renewable purchase
• Redesigning boilers to accept blended hydrogen obligation (RPO) to increase the uptake of solar
gas and defining an allowable blending percent- and wind power).
age.
• Developing regulations for safety norms, stand-
• Green hydrogen mandates for industries. ards and labelling, dedicated hydrogen pipeline
construction norms, retrofitting pipelines, and
• Innovative funding from financial institutes to creating storage.
support growth.
• Introducing green hydrogen standards and label-
ling programme.
13
• Creating hydrogen and/or green hydrogen hubs. The increasing global focus on decarbonisation has
led to a renewed interest in green hydrogen as a clean
• Conducting research on mainstream and other energy source. While the technology is still in its ear-
emerging production technologies such as Pro- ly stages of development, the potential benefits of
ton Exchange Membrane (PEM), Solid Oxide green hydrogen are immense. However, the current
Electrolysis Cells, AEM, and biomass gasifiers. high cost of production is a major hurdle in its wide-
spread adoption, particularly in the C&I sectors. It is
• Exploring the adoption of hydrogen with mini- imperative for the government to assume a pivotal
mal retrofitting. role in designing a sustainable environment for hy-
drogen by covering the gaps in the entire hydrogen
• Encouraging the establishment of state-level pol- value chain. In addition, the government needs to es-
icies, including green hydrogen obligation and tablish industry-wide standards and benchmarks for
blending norms. the quality, safety, and performance of hydrogen, and
support R&D initiatives that aim to lower the costs of
• Optimising the cost of production of green hy- hydrogen production, storage, and transportation.
drogen through a reduction in power cost, car-
bon taxation, and carbon pricing, among others. It is also crucial for the government to collaborate
with industry stakeholders to create a conducive
• Introducing financial and fiscal incentives environment for investment and innovation in the
through existing and new mechanisms, including hydrogen sector. By adopting a proactive approach
viability gap funding (VGF), production-linked and partnering with industry players, the govern-
incentive scheme (PLI), etc. ment can provide the necessary impetus to the hy-
drogen ecosystem and drive the transition towards
• Developing dedicated hydrogen pipelines and as- a low-carbon economy. With a concerted effort, the
sociated infrastructure. cost of green hydrogen can be reduced to a commer-
cially viable level, making it a key player in the future
• Retrofitting existing pipelines. of clean energy.
• Developing a spot market for hydrogen.
• Introducing appropriate subsidies and schemes

at different levels of the value chain.
14
1
Introduction
In 2021, India, registered an overall annual hydrogen nificant boost to the exploration of clean hydrogen.
consumption of 6.55 MT, with the refinery, ammonia
5
In 2020, global hydrogen demand was 90 Mt, with
production, and chemical industries accounting for approximately 70 Mt used as pure hydrogen and the
the bulk of hydrogen consumption. As part of a more remaining used as a mixture of gases, such as synthe-
comprehensive climate action plan, India has com- sis gas, for fuel or feedstock.9 Indeed, according to
mitted to achieve net-zero emissions by 2070 and the Global Hydrogen Review Report 2021 by IEA,10
meet 50 percent6 of energy requirements through re- the world’s largest economies have already laid out
newable sources by 2030. India’s ambition includes plans to move towards a hydrogen economy, with a
positioning itself as a global hub for green hydrogen focus on green hydrogen.
production., and, therefore, needs to accelerate its
path to a green hydrogen economy. In terms of availability, it is important to note
that hydrogen is abundant in the universe but
In a significant step towards achieving the country’s only present in traces in the Earth’s atmosphere.
net-zero targets, the Ministry of Power approved However, it can be found in significant quantities
the National Green Hydrogen Mission on 4 January in compounds such as water when combined with
2023. The document specifies the aim of developing other elements, as well as in various other carbon-
the capacity to produce at least 5 MMT of green hy-
7
based compounds. Most of the global hydrogen is
drogen per annum and creating export opportunities derived from fossil fuels (natural gas and coal) and
for green hydrogen and its derivatives. The docu- biomass, or from water through electrolysis. Natural
ment also talks about facilitating the de-carbonisa- gas is the primary source for hydrogen production,
tion of the industrial, mobility, and energy sectors, accounting for approximately 76 percent of the global
reducing the dependence on imported fossil fuels dedicated hydrogen production. Coal is the second-
and feedstock, and developing indigenous manufac- largest source, contributing an estimated 22 percent
turing capabilities. The document also suggests that of the total production. The remaining 2 percent is
India will support pilot projects in emerging end-use produced through the electrolysis of water.11
sectors and production pathways.
In recent years, various production techniques have
According to a United Nations report, over 70 coun- been used to produce hydrogen. To differentiate
tries, including major economies such as China, the between the hydrogen produced from different
US, and the EU, have set net-zero targets, covering sources, a colour-based categorisation system has
around 76 percent of global emissions. To achieve
8
been adopted:
this goal, countries are exploring strategies to move
towards a sustainable clean energy mix, with green • Black, grey, or brown hydrogen refers to the ex-
hydrogen as a crucial component. The urgency to re- traction of hydrogen from fossil fuels, such as
duce greenhouse gas emissions has provided a sig- coal or natural gas, using the SMR process.
9 https://iea.blob.core.windows.net/assets/5bd46d7b-906a-
5 ICF Primary Research
4429-abda-e9c507a62341/GlobalHydrogenReview2021.
6 https://pib.gov.in/PressReleasePage.aspx?PRID= 1768 pdf
712
10 https://iea.blob.core.windows.net/assets/5bd46d7b-906a-
7 https://mnre.gov.in/img/documents/uploads/file_f-167358 4429-abda-e9c507a62341/GlobalHydrogenReview2021.pdf
1748609.pdf
11 https://www.energypolicy.columbia.edu/sites/default/files/
8 https://www.un.org/en/climatechange/net-zero-coalition pictures/HydrogenProduction_CGEP_FactSheet_052621.
pdf
15
• Blue hydrogen is produced from fossil fuels Give the growing push for clean fuel and the
with carbon dioxide emissions reduced using increasing global attention on green hydrogen, this
carbon capture, utilisation, and storage (CCUS) report seeks to analyse the developments in hydrogen
technology. procurement in India and determine the viability of
green hydrogen for the country’s C&I sector. As such,
• Green hydrogen refers to the production of hy- this report presents an in-depth analysis of:
drogen through the electrolysis of water, using
electricity from renewable sources. As a result, • Research on the current hydrogen market in
this is the cleanest form of hydrogen. India.
• Turquoise hydrogen is produced by the thermal • Key/priority industries where hydrogen can
splitting of methane (methane pyrolysis), with replace natural gas.
solid carbon being produced instead of CO2.
• Current pricing of hydrogen and future pricing of
• Pink hydrogen is produced by the electrolysis of green hydrogen and its viability.
water using nuclear power.
• The policy ecosystem and its impact on green
• Yellow hydrogen is generated through the elec- hydrogen adoption.
trolysis of water using electricity sourced from
the grid. • Future demand for hydrogen and key growth
drivers (till 2030) based on current growth
• White hydrogen is produced as a by-product of patterns.
industrial processes.
• Estimated green hydrogen cost that would be
To accelerate the pace of hydrogen production and considered viable in India by commercial and
the achievement of hydrogen targets in India, there is industrial players for different applications.
a pressing need for a greater adoption of clean energy
by commercial and industrial (C&I) consumers. Many • Exploring the green hydrogen market from the
organisations have already undertaken measures production and manufacturer view.
to increase their renewable energy consumption
and reduce their carbon emissions by joining the Based on the finding of the study and views gathered
Renewable Energy Demand Enhancement (REDE) from stakeholders (including C&I consumers,
initiative. The REDE initiative, started by WWF producers, and manufacturers), This report suggests
India and the Confederation of Indian Industries certain high level policy interventions to increase
(CII) in 2018, is an alliance of corporate buyers that the uptake of green hydrogen in the commercial and
aims to increase renewable energy procurement, industrial segment.
catalyse solutions to address the challenges that are
significantly restricting renewable energy demand,
expand the scope of corporate renewable energy
procurement, build capacity, influence policy, and
increase member networking and peer-to-peer
learning among members.
16
2
Hydrogen Demand in India
At the 2021 United Nations Climate Change Confer- ammonia and methanol. Historically, the majority
ence, commonly known as the COP26, India com- of the demand comes from refineries, followed by
mitted to achieving net zero emissions by 2070. 12
the fertiliser sector in ammonia production, with a
Thirty-three countries, including India, and the EU small share of consumption coming from methanol
signed the five-point ‘Glasgow Breakthroughs’ to production.
enhance clean technologies, with the fourth point
aiming at making renewable, affordable, low-carbon The steel industry has consistently been a significant
hydrogen widely available by 2030. In 2021, the to-
13
contributor, with a cumulative demand of around
tal consumption of hydrogen in India stood at 6.55 0.1216 MMT since 2015. A very small share is also be-
MMT14 of hydrogen per annum, approximately 9 per- ing consumed by the glass and optic fibre industries.
cent of the global hydrogen demand. There is also emerging potential demand for hydro-
gen in the heavy duty and long-haul freight transpor-
2.1 Sectors driving hydrogen demand tation and power sectors. Our assessment excludes
niche applications, such as in industrial forklifts,
Hydrogen consumption in India has gradually cell phone towers, and city gas distribution. It also
increased in recent years, from 5.59 MMT in 2015 excludes demand potential from aviation, shipping,
to 6.55 MMT in 2021, at a CAGR of 2.9 percent. 15
and cooking industries, which are currently more
The major driver of hydrogen consumption in India speculative and technically in the very early stages. A
is largely concentrated around industrial usage, detailed industry-wise consumption trend of hydro-
primarily in refining and as a feedstock to produce gen in India is presented in Table 1.
Figure 1: Hydrogen Consumption in India
India Hydrogen Demand (MMT), FY 2015-2021
2.7%
6.11 6.30 6.49 6.55

5.59 5.73 5.85
2015 2016 2017 2018 2019 2020 2021
Source- Primary survey by ICF India
12 https://www.bbc.com/news/world-asia-india-59125143 16 ICF primary research

13 https://energy.economictimes.indiatimes.com/news/
renewable/indias-green-hydrogen-policy-unprecedent-
ed-growth-needed-to-achieve-2030- targets/90154361#:~:-
text=India%2C%20along%20with%2032%20other,hydro-
gen%20widely%20available%20by%202030
14 ICF primary research
15 ICF primary research
17
Table 1: Industry-Wise Hydrogen Consumption (MMT)
Industry 2015 2016 2017 2018 2019 2020 2021

Fertiliser 1.83 1.88 1.91 2.04 2.06 2.13 2.14
Petroleum Refinery 2.56 2.63 2.81 2.94 3.06 3.05 3.12
Methanol 0.52 0.42 0.42 0.35 0.34 0.48 0.53
Hydrogen Peroxide 0.21 0.21 0.22 0.24 0.24 0.24 0.29
Steel 0.12 0.12 0.12 0.12 0.12 0.12 0.12
Optic Fiber 0.02 0.02 0.03 0.03 0.04 0.05 0.05
Float Glass 0.07 0.07 0.07 0.08 0.08 0.09 0.09
Sintered Glass 0.08 0.08 0.08 0.08 0.08 0.08 0.08
Others 0.18 0.29 0.19 0.23 0.27 0.26 0.13
Total Hydrogen
5.59 5.73 5.85 6.11 6.30 6.49 6.55
Consumption
Table 1 shows how hydrogen demand has evolved percent since 2015.18 This increase can be attributed
since 2015. Hydrogen has increasingly been used in to the development of the domestic manufacturing
the refinery and fertiliser sectors, with CAGRs of 3.4 sector, the introduction of new technologies support-
percent and 2.6 percent,17 respectively. Similar trends ing hydrogen as a feedstock for these industries, and
are also visible in the optic fibre and float glass in- the establishment of new hydrogen peroxide plants
dustries, which have recorded a growth rate of over 6 across the country.
Table 2: Hydrogen Usage in Different Industries
Refinery Hydrogen is used for desulphurisation of products such as diesel and petrol.
Hydrogen is used for manufacturing ammonia, which in turn is used as a

Fertiliser feedstock for ammonia-derived fertilisers such as urea and di-ammonium
phosphate.
Hydrogen is used as a main feedstock to produce methanol, which is currently
Methanol
produced from natural gas.
Hydrogen is used in the first step, i.e. hydrogenation of working solution of
Hydrogen peroxide
four-step hydrogen peroxide manufacturing process.
Hydrogen is used as a reducing agent in steel manufacturing by direct reduced
Steel
iron process
Hydrogen is used as a getter gas to prevent oxidation over the tin baths used
Float glass in float glass manufacturing process, the glass formed on the baths is made
without defects.
Hydrogen is used for refractive index increment; optical fibre is immersed in
Optic fibre a hydrogen environment to absorb hydrogen up to several mol% in advance of
UV irradiation to reduce defect formation in cables.
17 ICF primary research 18 ICF primary research
18
Hydrogen demand in India
Table 2 showcases a list of major processes with The southern region has the next most significant
primary hydrogen usage and the processes in which share in hydrogen consumption in India, accounting
hydrogen is used. for 21.4 percent.20 The industries driving the demand
in this region are fertilisers, refinery, and steel.
2.2 Regional concentration of demand centres
The remaining demand of hydrogen is split equally
The demand for hydrogen is scattered across between the eastern and northern region, each
India’s north, south, east, and west. However, at accounting for 13.1 percent21 of the total hydrogen
52.1 percent19 of India’s total hydrogen demand, demand across India. While the demand in the
the west consumes a significantly higher share than northern region is driven by the fertiliser sector, the
the other three regions. This is because most of the steel industry is the major consumer in the eastern
industries using hydrogen as a fuel, such as the region.
fertiliser, refinery, and chemical sectors, are in the
western region. However, not all states in the west A split of the demand share of each region is provided
have similar share—Maharashtra and Gujarat drive in Figure 2.
the overall hydrogen demand in the region.
Figure 2: Hydrogen Demand Concentration Across India
Source- ICF primary research
19 ICF Primary Research 20 ICF Primary Research

21 ICF Primary Research
19
The demand for hydrogen in these regions is expect- 2.3.1 Consumers

ed to grow during the forecast period (until 2030),
primarily due to the easy availability of natural gas. Hydrogen consumers can be segregated under two
Approximately 45 percent of the overall consump-
22
categories based on the mode of hydrogen supply.
tion of natural gas in India is from imports. The pres- The first category of consumers is those who set up
ence of ports in India’s western and southern regions their own HGU to meet their captive demand. Con-
makes natural gas procurement and, in turn, hydro- sumers place these captive units as part of their over-
gen generation/procurement easy and cost-efficient all infrastructure plans or through third-party ven-
in these regions. Moreover, the secondary clusters of dors, wherein the investment and the operation and
iron and steel production units and float glass plants maintenance expenses are borne by the consumers.
in the west and south regions intensify the demand Another reason for the high dependence on captive
for hydrogen in these regions. generating units is due to the non-availability of hy-
drogen-linked infrastructure to facilitate merchant
2.3 Key Consumers and Suppliers supply. The refinery, fertiliser, and steel industries,
and some chemical plants instal such hydrogen gen-
In India, hydrogen is mainly produced through SMR eration units to meet their large captive demand for
process, meaning it falls under the ‘grey hydrogen’ hydrogen.
category. The major producers of such hydrogen
are the fertiliser, petroleum refining, and chemical The second category of consumers are those who
industries. In India, hydrogen is also produced as a have a smaller demand for hydrogen and meet their
by-product in the chloralkali industries. requirements through merchant supplies. These in-
clude the food processing, glass, and optic fibre in-
Most of the hydrogen produced in the country is dustries.
captive in nature, as a result of which a very small
amount is readily available for merchant sale and To understand the consumption pattern of hydrogen,
use. By-product hydrogen from chloro-alkali plants a list of 20 consumers from different sectors along
is mainly traded through the merchant route. with their current hydrogen demand has been collat-
ed and represented below in Table 3.
Figure 3: Types of Hydrogen Users

Figure 3: Types of Hydrogen Users
Produce their own

Captive Consumers
hydrogen
Hydrogen Consumers
Hydrogen Procurement
Merchant Consumers through
merchant markets
22 https://economictimes.indiatimes.com/industry/energy/
oil-gas/india-begins-importing-lng-from-russia/article-
show/64449583.cms?from=mdr
20
Hydrogen demand in India
Table 3: List of Key Consumers
Consumption Demand
Consumers Location Sector
type (MMT)
Reliance India Limited Jamnagar Captive Refinery 0.53
Krishak Bharati Cooperative Limited Hazira Captive Fertiliser 0.22
Grasim Industries Limited Jagdishpur Captive Fertiliser 0.11
Indian Oil Corporation Limited Mathura Captive Refinery 0.09
Kanpur Fertilizers and Chemical Limited Kanpur Captive Fertiliser 0.07
Hindustan Petroleum Corporation Limited Mumbai Captive Refinery 0.03
Vinati Organics Limited Raigad Merchant Chemical 0.0070
Indo Amines Limited Dombivali Merchant Chemical 0.0060
Bharuch, Navi
Saint Gobain Merchant Glass 0.0014
Mumbai
Tata Steel Limited Palghar Merchant Steel 0.0008
Jindal steel works Limited Raigad Merchant Steel 0.0007
Essar Steel Hazira, Kurla Merchant Steel 0.0006
Asahi India Glass Limited Raigad Merchant Glass 0.0006
Hari Orgochem Pvt. Limited Vadodara Merchant Chemical 0.0005
Tata Motors Limited Pune Merchant Automotive 0.0004
Suzuki Motor Gujarat Private Limited Ahmedabad Merchant Automotive 0.0004
Jigs Chemical Ahmedabad Merchant Chemical 0.0003
Finolex Cables Limited Pune Merchant Optic Fibre 0.0003
Indian Peroxide Limited Bharuch Merchant Chemical 0.0003
Taloja,
Deepak Nitrite Limited Merchant Chemical 0.0002
Vadodara
It was observed that more than 90 percent of the (not a planned product and is produced after carry-
overall consumption is through the captive route. ing out the process). This can be further understood
Further, there is high variability in the volume of de- from the usage of hydrogen. For captive consumers,
mand, ranging from 0.0002 MMT to 0.53 MMT per most of the hydrogen produced is self-consumed,
consumer. while the hydrogen produced as a by-product in pe-
troleum refineries and caustic soda plants is sold in
2.3.2 Suppliers the merchant market. The producers either sell the
by-product directly to the consumers or through a
To understand the hydrogen supply market, it is trader.
important to understand the availability of hydro-
gen through the different modes of production—i.e., The commercial sale of hydrogen in the Indian mar-
whether it is produced as a product, co-product (pro- ket is either through bilateral sale by the generating
duced along with the main product and carries equal entity (direct supply) or through traders (indirect
importance as the main product) or is a by-product supply).
21
Direct suppliers operate through annual contracts, the mode of transportation is trucks mounted with
typically for a one-to-three-year period. Such sellers cylinder banks. However, some traders have also set
supply hydrogen within 120 km 23
from the point of up onsite hydrogen production units for large captive
generation through trucks that are mounted with hy- consumers. The key indirect suppliers are Linde In-
drogen banks. Some suppliers even supply through dia, Inox Air Products, and Bhuruka Gases.
pipelines for smaller distances (such as in a radius
of 1.5 km). The key direct suppliers in the market in- The list of top merchant suppliers in India, account-
clude Grasim Chemicals, DCM Shriram, Gujarat Al- ing for 66 percent (or 0.443 MMT of the total mer-
kalies and Chemicals Limited, Tata Chemicals Limit- chant supply in 2021) are listed in Table 4.
ed, and GHCL Ltd.
In addition, local traders such as Verni Gastech,
Indirect suppliers include local traders or distribut- Shreeji Carbonic Gases, Shivam Gases, and Nishal
ers who operate either on spot booking or on an an- Enterprises, among others, act as an aggregator of
nual contract basis. Their area of supply is within a surplus generation from captive production units.
range of 500 km from the point of generation, and
Table 4: Key Merchant Suppliers in India
Merchant Supply MMT Sales Growth In last 5

Suppliers
Pan-India Years (%)
Linde India Limited 0.136 3.90
Grasim Industries Limited Including
0.105 3.70
Century Rayon
Inox Air Products 0.068 3.80
Gujarat Alkalies and Chemicals Limited 0.002 3.20
Air Liquide India 0.038 2.80
GHCL Limited 0.013 3.70
Tata Chemicals Limited 0.015 3.20
Bhuruka Gases 0.009 2.60
Ellenbarrie Industrial Gases 0.066 3.50
23 Stakeholder consultation
22
3
Hydrogen Demand
Projection This growth can be attributed to various factors, in-
cluding the GoI’s ‘Make in India’ initiative that has
The demand for hydrogen is best determined through enabled the growth of the manufacturing sector. A
two key parameters—first, establishing if it has been significant factor is also the steady growth of the In-
utilised as direct feedstock or as a fuel for heating, dian economy. Further, the growth of the CGD sec-
and next is assessing the viability of adoption in tor, improved pipeline connectivity, CGD firms’ in-
terms of retrofitting existing infrastructure or cre- frastructure development plans, the expansion of ex-
ating new infrastructure. Still, before assessing the isting plants, and policy incentives have also spurred
hydrogen demand in India, it is important to under- the increased use of natural gas in the transport and
stand the natural gas market and the possible impact the industrial sectors.
of hydrogen in its overall demand.

The estimated demand growth of natural gas, based
3.1 Natural gas market in India: Historical and on sector-wise analysis and requirements, is present-
forecasted growth ed in Figure 4.
Natural gas demand in India has grown at a steady

pace across various industrial segments since 2015.
Figure 4: Natural Gas Market Growth In India
Sector-wise Natural Gas demand (MMSCMD): Historical & Forcasted
300 272 18%

261
250 16%
239
250 230
221 14%
208
193
Natural Gas demand
12%
200
166
153 152 10%
141 144
130 137
150 128 8%
6%
100
4%
2%
50
0%
0 -2%
2015 2016 2017 2018 2019 2020 2021 2022E 2023F 2024F 2025F 2026F 2027F 2028F 2029F 2030F
Power Fertilizer Industry Refinery CGD Petrochemical Large Industry Misc CAGR
23
Since 2015, the CGD, refinery, and fertiliser indus- feedstock for fertilisers, refineries, metallurgy, food,
tries have seen rapid growth in natural gas consump- steel, and glass, among others.
tion, while the power sector has seen a steep decline.
This can primarily be attributed to the availability of The possible uses for hydrogen are expanding
gas and the steady transition of the power sector to across multiple sectors, such as in power generation
renewable sources of energy. Similar trends are ex- and electricity grid stabilisation, manufacturing
pected in the coming years, with the CGD, refinery, processes in industries (such as steelmaking and
and fertiliser industries continuing to dominate nat- cement production, fuel cells for electric vehicles, and
ural gas demand. Natural gas consumption in India green ammonia production for fertilisers), and heavy
is anticipated to increase by 6.6 percent from 2021 transport, such as shipping. Table 5 summarises the
to 2030. current and potential use of hydrogen across different
industries.
3.2 Industries dependent on hydrogen
Hydrogen is currently used either as fuel for the

transport and power sectors, as heating fuel for in-
dustries such as steel, cement, paper, and food, or as
Table 5: Use of Hydrogen in Industries
Industry Uses End-Use Products

• Hydrogen is used for crude oil processing and Gasoline
desulphurisation, with different products allowing LPG
different levels of sulphur, based on regulations and
industry requirements. Fuel Oil
Refinery
• For lower sulphur content, a higher volume of hydrogen
is required.
Diesel
• Also used in the hydrocracking process to produce
valuable products from heavier oil residues.
Ammonia
• Hydrogen is used to produce ammonia, which is further
Fertiliser Urea and
used to produce urea or other complex fertilisers.
other fertilisers
• Hydrogen is used as the main reduction agent in the
process of making sponge iron through direct iron
reduction in a shaft furnace. Steel
Metallurgy • The sponge iron obtained is subsequently utilised in the
manufacturing of steel within an electric arc furnace.
• Atomic hydrogen welding is a type of arc welding that
Welding
utilises a hydrogen environment.
• Sorbitol is produced through glucose hydrogenation. The
reaction mechanism involves the reduction of carbonyl
groups in saccharides under hydrogen pressure, with Sorbitol
the assistance of a solid metal catalyst composed of
Food Nickel, Palladium, Platinum, or Ruthenium.
• Hydrogen is used for turning unsaturated fats into
saturated oils and fats, including hydrogenated vegetable Vanaspati
oils, such as margarine and butter spreads.
24
Hydrogen demand projection
Industry Uses End-Use Products

• Hydrogen is used for methanol synthesis. Methanol
• In industrial hydrogen peroxide production, methane or
natural gas is employed as a source to supply hydrogen,
Hydrogen Peroxide
Chemical which is subsequently subjected to a catalytic process
involving high temperatures, where it reacts with oxygen.
• Principally, nitric acid is manufactured through the
Nitric Acid
catalytic oxidation of ammonia.
• A mixture of hydrogen and nitrogen is used to
Glass prevent oxidation, and, therefore, defects during the Float glass
manufacturing process.
• For the refractive index increment of fibre elements,
optical fibre is immersed in a hydrogen environment to
absorb hydrogen up to several mol% in advance of UV Optic Fibre
Communication irradiation to reduce defect formation in cables (in a
process known as ‘hydrogen loading’).
• Used as a fuel to provide power backup to telecom
Telecom Tower
towers.
• Hydrogen is used to produce hydrogen peroxide and
Pharma active pharmaceutical ingredient, which is used in Medicines
various medicine manufacturing.
• Hydrogen could be used as a fuel in the manufacturing
Cement Cement
process to reduce carbon dioxide emissions.
• Hydrogen is used as fuel for long-haul freight and
heavy-duty vehicles.
Transportation -
• Hydrogen can be used as a fuel in the shipping and
aviation sectors.
• Hydrogen is used to cool power plant generators to
transfer heat from the power generating winding
enclosure to the heat exchanges known as hydrogen
coolers.
• Hydrogen can also fuel power generation for the power

Power
grid. -
generation
• Hydrogen fuel cell generators are viable alternatives for
backup power generation, such as in hospitals, and for
power generation in remote locations where batteries and
renewables are unviable due to suboptimal conditions
for renewable power generation.
While most industries use hydrogen in direct or in- green hydrogen in the ammonia production, petro-
direct processes, there are certain end-use sectors, leum refining, steel production, and CGD sectors.
such as fertilisers, refining, steel, and methanol, that Additionally, the GoI also aims to promote the use
consume significant volumes of hydrogen and emit of green hydrogen-derived synthetic fuels, such as
carbon dioxide. The National Green Hydrogen Mis- green ammonia and green methanol, in sectors such
sion document mentions the possibility of replac- as mobility, shipping, and aviation as a replacement
ing hydrogen produced from fossil fuel sources with for fossil fuels.
25
3.3 Future demand for hydrogen and key growth and 14 MTPA,25 primarily driven by the hydrogen-de-
drivers (C&I) pendent industries, such as ammonia and refinery
(amounting to a combined 38-percent share of the
In 2021, hydrogen demand in India was 6.5 MTPA, total demand).26 Three different scenarios (realistic,
majorly driven by captive consumption by refin- conservative and optimistic) have been assessed to
eries (3.1 MTPA), and fertilisers and ammonia (2.1 estimate the demand in each sector is summarised
MTPA) sectors located in the western region.24 By in Table 6.
2030, demand is projected to be between 10 MTPA
Table 6:Forecasted Hydrogen Demand by Scenario (until 2030)
Sectors Realistic Conservative Optimistic

Consumption of petroleum Rapid growth of petroleum
Stricter emissions norms
products and new-age fuels products amid growing
across sectors due to
(electric vehicles, ethanol, economy and improved
Refineries climate change will lead
CNG, LNG) will continue living standards, clubbed
to reduced demand of
to grow in line with recent with limited adoption of
petroleum products
growth trends green fuels
Ammonia imports will reach Ammonia imports do not Ammonia imports become
Ammonia nil by 2028, with exports become nil by 2030 and nil by 2025 and exports
likely from 2030 onwards exports do not start start from 2025
Chemicals pick up utilisation
across key sectors. hydrogen
Significant expansion due
peroxide growth increases
Growth of chemicals as to specific utilisation of
as pulp and paper industry
per past trends with no chemicals (Eg: Methanol
Chemical grows, and methanol growth
additional expansion of blending is successful, or
increases with slight blending
industry chemical finds utilisation
and additional utilisation in
in more sectors)
downstream chemical and
petrochemical products
Road Transport
Road Transport Road Transport
· HCNG: Considering · HCNG: 6% blending to
· HCNG: Based on
current pilot studies be achieved by 2030,
stakeholder views and
being done by GAIL and assuming optimum
possible plans for higher
CNG blending limit, 2% blending can be
Transport blending; 6% by 2030 and
by 2030 achieved.
then to stay constant.
· FCEV: Scenario for · FCEV: Scenario for
· FCEV: Scenario for 0.26%
0.27% penetration of 0.91% penetration of
penetration of on-road
on-road vehicles by on-road vehicles by
vehicles by 2030
2030 2030
Assumed accelerated
Assuming nominal economic Assuming moderate
economic growth, a 2030
growth, balanced fuel mix economic growth, fuel mix
Large fuel mix in favour of
of renewable and traditional in favour of traditional
Industries renewable fuels and high
fuels, and moderate uptake of fuels, and low uptake of
uptake of
hydrogen blending hydrogen blending
hydrogen blending
24 ICF primary research 25 ICF analysis

26 ICF analysis
26
Sectors Realistic Conservative Optimistic

Hydrogen blending trajectory Hydrogen blending Hydrogen blending
CGD in CGD network from nil to trajectory in CGD network trajectory in CGD network
blending 2% from nil to 2% till 2026 from nil to 2%
(2026) and 6% in 2030. and 6% in 2030. (2026) and 6% in 2030.
Source: Assumptions considered by ICF India
Note: The assumptions considered for CGD blending in all the three scenarios are the same until 2030. The diversions are expected to occur
after 2030.
The outputs from the scenarios are presented Table 6 in and Figure 6.
Figure 5: Overall Hydrogen Demand: Realistic Scenario
12.00
10.00
8.00
6.00
4.00
2.00
0.00
2023 2024 2025 2026 2027 2028 2029 2030
Other industries 0.00 0.00 0.00 0.01 0.01 0.01 0.01 0.02
H2 Blending 0.00 0.04 0.08 0.20 0.30 0.40 0.60 0.70
Chemical 0.06 0.07 0.08 0.10 0.12 0.14 0.16 0.20
S&I 0.00 0.06 0.14 0.24 0.40 0.60 0.98 1.30
FCEV 0.00 0.00 0.00 0.00 0.00 0.00 0.03 0.10
Ammonia 3.30 3.40 3.50 3.60 3.70 3.80 3.90 4.00
Refinery 3.20 3.40 3.50 3.60 3.80 3.90 4.00 4.30
TOTAL 6.56 6.97 7.30 7.75 8.33 8.85 9.68 10.62
Source- ICF analysis
Figure 6: Overall Hydrogen Demand- Optimistic and Conservative Scenario
Optimistic Scenario
16.00
14.00
12.00
10.00
8.00
6.00
4.00
2.00
0.00
2023 2024 2025 2026 2027 2028 2029 2030
H2 Blending 0.00 0.04 0.09 0.20 0.30 0.40 0.50 0.70
Chemical 0.09 0.11 0.15 0.19 0.20 0.24 0.30 0.34
S&I 0.00 0.06 0.13 0.20 0.40 0.60 1.10 1.60
FCEV 0.00 0.00 0.00 0.00 0.00 0.00 0.30 0.40
Ammonia 3.30 3.40 3.50 3.60 3.80 4.00 4.40 4.90
Refinery 3.20 3.60 4.00 4.50 4.80 5.20 5.60 5.90
TOTAL 6.59 7.21 7.88 8.70 9.52 10.46 12.23 13.87
27
Conservative Scenario
12.00
10.00
8.00
6.00
4.00
2.00
0.00
2023 2024 2025 2026 2027 2028 2029 2030
H2 Blending 0.00 0.04 0.08 0.18 0.20 0.21 0.23 0.30
Chemical 0.05 0.06 0.06 0.07 0.08 0.09 0.10 0.12
S&I 0.00 0.06 0.13 0.20 0.40 0.60 1.00 1.30
FCEV 0.00 0.00 0.00 0.00 0.00 0.00 0.08 0.10
Ammonia 3.30 3.40 3.50 3.60 3.70 3.80 3.90 4.00
Refinery 3.20 3.30 3.40 3.50 3.60 3.70 3.80 3.90
TOTAL 6.55 6.86 7.17 7.55 7.98 8.41 9.12 9.73
The fastest growth will be observed in optic fibre, 3.3.1 Ammonia and fertiliser
float glass, and HFCV, and these sectors will account
for 6 percent of the total demand in 2030. India’s fertiliser industry has 39 ammonia synthesis
units, with production capacity of 19,108 KTPA27 (as
The growth impetus for hydrogen consumption in of April 1, 2020). In 2019-20, India imported about
these industries will be primarily driven by the in- 10,000 KTA of urea, 5,000 KTA of diammonium
herent growth that these sectors are witnessing. The phosphate, and 3,000 KTA of ammonia. The import
growth trajectory and demand analysis for each sec- of fertilisers is expected to fall by ramping up the
tor follows: domestic manufacturing capacity. The GoI has
incentivised the fertiliser sector to support domestic
production (see Table 7).
Table 7: Incentives provided to fertiliser industry by GoI
Year Subsidy (₹ Crore)

Urea P&K Fertiliser City Compost
2013-14 41, 853.00 29, 427.00 NA
2014-15 54, 400.00 20, 667.30 NA
2015-16 54, 600.00 21, 937.50 NA
2016-17 51, 256.50 18, 843.40 NA
2017-18 46, 980.00 22, 237.00 7.26
Source: Annual Report 2018-19, Department of Fertilisers, Ministry of Chemicals & Fertilisers
27 https://www.sciencedirect.com/science/article/abs/pii/
S0360319921035448?via%3Dihub
28
Hydrogen is used as a feedstock for ammonia been a noticeable increase in industrial demand for
synthesis. In 2021, the total hydrogen demand in ammonia over the same period.
this sector was 1,583 KTA. 28
Almost all ammonia
production units are currently producing hydrogen The demand of ammonia has been analysed with
through the SMR method. Ammonia primarily finds projections of base demand using historic CAGR of
application in two major segments: urea and NPK 2.8 percent for demand of domestically produced
(nitrogen, phosphorous, and potassium) fertilisers. ammonia, and 0.74 percent for ammonia imports.
In 2017, these segments collectively accounted for The domestic demand for ammonia (with imports) is
almost 94 percent 29
of India’s ammonia demand. projected to grow from 18 MMT per annum in 2022
Fertilisers, notably the largest end-use sector, to 23 MMT per annum in 2030.32
prominently drive ammonia consumption in India,
constituting roughly 87 percent30 of the country’s According to the three different scenarios explained
ammonia demand in 2020. However, in actual in Table 6, a reduction in imports and start of exports
figures, the demand 31
for ammonia in fertilisers from different years was assumed to arrive at future
remained stagnant, hovering between 36.640 MMT ammonia production requirements and hydrogen re-
in 2016 and 37.740 MMT in 2021 whereas there has quirements in India (as listed in the Table 8).
Figure 7: Projected Ammonia Demand for Domestic Usage Including Imports (MMTPA)
25
20 2.8 2.9
2.6 2.6 2.7
2.4 2.4 2.5
2.4 2.3
15 2.2
10 18.03 18.53 19.05 19.59
15.7 16.14 16.59 17.06 17.54
13.3 15.2
5
0
FY 16
FY 20
FY 22
FY 23
FY 24
FY 25
FY 26
FY 27
FY 28
FY 29
FY 30
Domestic Import
28 ICF primary research 32 ICF Analysis

29 https://www.globaldata.com/indias-ammonia-capacity-is-ex-
pected-to-witness-double-digit-growth-over-the-next-six-ye
ars-says-globaldata/#:~:text=In%20India%2C%20the%20
main%20segments%20that%20consume%20ammonia,-
from%20%24296.9%2Fton%20in%202017%20to%20
%24359.0%2Fton%20i n%202022.
30 https://www.expertmarketresearch.com/reports/indian-am-
monia-market#:~:text=The%20Indian%20ammonia%20
market%20size,of%20nearly%209.27%20million%20tons –
Figures for 2020 are approximate
31 Department of Fertlizers – Annual Report 2021-22
29
Table 8: Scenarios for Ammonia Production Requirement till 2030
Conservative Scenario Realistic Scenario Optimistic Scenario

Year Ammonia Ammonia Ammonia Ammonia Ammonia Ammonia
(FY) Import Export Import Export Import Export
(MMT) (MMT) (MMT) (MMT) (MMT) (MMT)
2023 2.40 0.00 2.40 0.00 2.40 0.00

2024 2.10 0.00 1.90 0.00 1.20 0.00
2025 1.80 0.00 1.40 0.00 0.00 0.20
2026 1.50 0.00 0.90 0.00 0.00 0.47
2027 1.20 0.00 0.40 0.00 0.00 0.88
2028 0.90 0.00 0.00 0.00 0.00 1.61
2029 0.60 0.00 0.00 0.00 0.00 2.79
2030 0.30 0.00 0.00 0.50 0.00 5.04
Source: ICF analysis
In the realistic scenario, the export of ammonia is In the conservative scenario, imports do not reach net
expected to start by 2030 and import dependency is zero and exports do not start until 2030, while in the
assumed to come down to nil linearly till 2028. optimistic scenario, hydrogen imports are assumed
Figure 8: Ammonia Production Requirement – Realistic Scenario (MMTPA)
25.00
20.00
15.00
10.00
5.00
0.00
FY 16 FY 20 FY 22 FY 23 FY 24 FY 25 FY 26 FY 27 FY 28 FY 29 FY 30
Export 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.50
Import 2.20 2.40 2.30 2.36 1.86 1.36 0.86 0.36 0.00 0.00 0.00
Domestic 13.30 15.20 15.70 16.14 17.16 18.19 19.24 20.30 21.25 21.84 22.46
Total 15.50 17.60 18.00 18.50 19.02 19.56 20.11 20.67 21.25 21.84 22.96
Domestic Import Export Total
Source – ICF Analysis
30
to reduce to nil in 2025 and the export of hydrogen used as the base to derive the share of ammonia in
or hydrogen derivatives will start from the same year. hydrogen exports.
The share of fertilisers in the demand of hydrogen is
Figure 9: Ammonia Production Requirement – Conservative Scenario (MMTPA)
25
20
15
10
0
Export 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Import 2.20 2.40 2.30 2.36 2.06 1.76 1.46 1.16 0.86 0.56 0.26
Domestic 13.30 15.20 15.70 16.14 16.96 17.79 18.64 19.50 20.38 21.28 22.19
Total 15.50 17.60 18.00 18.50 19.02 19.56 20.11 20.67 21.25 21.84 22.46
Figure 10: Ammonia Production Requirement – Optimistic Scenario (MMTPA)
30
25
20
15
10
0
Export 0.00 0.00 0.00 0.00 0.00 0.20 0.47 0.88 1.61 2.79 5.04
Import 2.20 2.40 2.30 2.36 1.16 0.00 0.00 0.00 0.00 0.00 0.00
Domestic 13.30 15.20 15.70 16.14 17.86 19.56 20.11 20.67 21.25 21.84 22.46
Total 15.50 17.60 18.00 18.50 19.02 19.76 20.57 21.55 22.86 24.63 27.49
The hydrogen requirement is calculated using stoi- from ammonia production and is expected to be be-
chiometric ratios and molar weight of components in tween 4 MMT and 4.9 MMT in 2030. The cumulative
ammonia synthesis reaction (i.e., 6 gm of hydrogen annual growth rate is 2.75 percent for conservative,
is required to produce 34 gm of ammonia). Thus, the 3.17 percent for realistic, and 6.28 percent for opti-
hydrogen demand as shown in Figure 11 is calculated mistic scenarios in 2024-30.
31
Figure 11: Hydrogen Demand from Ammonia (MMTPA)
4.9
5
4.8
4.6
4.4
MMTPA
4.2 4.1
4
3.8 4
3.6 3.4
3.4
3.2
3
FY 24 FY 25 FY 26 FY 27 FY 28 FY 29 FY 30
Realistic demand Conservative demand Optimistic demand
3.3.2 Refinery setting, stricter emissions norms will lead to reduced

demand, and in an optimistic case, the rapid growth
In 2020, India’s installed refining capacity was of petroleum products amid a growing economy with
25041 MTPA. 33
The sector is estimated to record the limited adoption of new age fuels drives refiner-
a 4.2-percent growth rate by 2030. In refineries, ies’ hydrogen demand.
hydrogen is primarily used as a hydrotreater to
remove impurities, such as sulphur from crude oil, In India, the average hydrogen consumption per unit
and as a hydrocracker to transform heavy gas oil into of refining capacity (MMTPA) is below 12,000 tons.
light distillates by breaking down long hydrocarbon
chains. Hydrogen might also find increased use as To assess hydrogen demand, it is assumed that more
fuel for heating in refineries, once it reaches price complex refineries will be added in the years to come
parity with other fuels, such as natural gas. due to the increased requirement of processing of
heavier fractions of crude oil. As such, the higher
In terms of hydrogen as feedstock, the demand is the refinery complexity, the greater the hydrogen
currently being met within refineries through the demand.
SMR of natural gas, which will have a green hydrogen
mandate of 50 percent (indicative demand percent- The hydrogen requirement inside a refinery is cur-
age considered for analysis) by 2030. rently close to 1.5 percent of the refinery capacity (up
from
The three different scenarios to forecast hydrogen
demand from petroleum refineries are shown in <1 percent till a few years ago) and it is expected
Table 9 (based on stakeholder consultations) to plateau at a
maximum value of 2 percent in the future. Further
In the realistic scenario, the demand driver is the hydrogen demand from refineries was calculated
growth of petroleum products. In the conservative using calorific values.
33 https://www.sciencedirect.com/science/article/abs/pii/
S0360319921035448?via%3Dihub
32
Table 9: Scenarios for Forecasting Hydrogen Demand from Refineries
Optimistic Realistic
Scenario Scenario
Based on historical
Growth of Economy and growth rate of petroleum
Industry production (lesser than
Based on Regression with
GDP growth rate) in
GDP
the past 5-6 years and
current expansion plans of
refineries.
CNG demand ~25 ~30
~40 MMSCMD
Transport (2030) MMSCMD MMSCMD
Demand
Demand for
(High demand
heavy duty 1.91 MMT, 1.91 MMT 3 MMT
for new- age
vehicles
fuels refers to
conservative Petrol + Diesel
scenario for demand 15 MMT 15 MMT 15.3 MMT
hydrogen replaced by EVs
demand) Ethanol
Blending in 13% 15% 23%
Petrol
Hydrogen
demand per 18,000
Feedstock MMTPA for 15,000 tons 12,000 tons
additional tons
refining capacity
Source: ICF Analysis
The assumptions on the growth rate of petroleum iii. Conservative scenario: A constant CAGR of 3.7
products are: percent has been assumed from 2022 to 2030.
i. Realistic scenario: CAGR of 3.7 percent for refin- The refining capacity calculated in each scenario has
ing capacity till 2025 and later 4 percent for the been further lowered due to transport demand of
2025-30 period. CNG, HDV, EV, and ethanol (as listed in Table 1010).
ii. Optimistic scenario: Growth rate of GDP at 8.6

percent till 2026 and 8 percent for 2025-30.
Table 10: Calculated Values for Refining Capacities (MMT)
Year 2023 2024 2025 2026 2027 2028 2029 2030

Refinery Capacity - GDP 276.67 300.59 326.57 354.81 383.19 413.84 446.95 482.71
Refinery Capacity – Based on
petroleum oils and lubricants 282.79 293.30 304.19 316.36 329.01 342.17 355.86 370.10
production
33
Year 2023 2024 2025 2026 2027 2028 2029 2030

Realistic Scenario
CNG 4.96 5.59 6.29 6.83 7.34 7.78 8.21 8.63
Transport HDV 0.20 0.33 0.47 0.61 0.76 1.13 1.51 1.91
Demand EV 2.93 4.31 5.82 7.45 9.21 11.11 13.16 15.38
Ethanol 3.53 3.83 4.44 4.77 5.17 5.59 6.26 6.97
Optimistic Scenario
CNG 4.96 5.59 5.83 6.11 6.39 6.53 6.67 6.94
Transport HDV 0.20 0.33 0.47 0.61 0.76 1.13 1.51 1.91
Demand EV 2.93 4.31 5.82 7.45 9.21 11.11 13.16 15.38
Ethanol 3.53 3.64 4.06 4.37 4.75 5.16 5.36 5.81
CNG 4.96 5.59 6.29 6.85 7.40 7.96 8.51 11.11
Transport HDV 0.20 0.33 0.47 0.61 0.76 1.00 2.00 3.00
Demand EV 2.93 4.31 5.82 7.45 9.21 11.11 13.16 15.38
Ethanol 4.24 5.47 7.73 8.21 8.82 9.45 10.13 10.84
Figure 12: Refinery Capacity Forecast (MMTPA)
450
400
350
300
250
200
150
100
50
0
2022 2023 2024 2025 2026 2027 2028 2029 2030
Realistic scenario 251 271 279 287 297 307 317 327 337
Optimistic scenario 251 265 287 310 336 355 375 396 418
Conservative scenario 251 271 278 284 292 301 310 318 325
Realistic scenario Optimistic scenario Conservative scenario
34
The new hydrogen demand for the 2023-30 period The total hydrogen demand as feedstock is the sum
has been calculated by using an assumed per unit of of this additional hydrogen demand and already in-
additional refining capacity, for example 15,000 in stalled hydrogen production capacity (2.93 MTPA in
the realistic scenario (see Table 11). The additional 2022). The fuel demand in a refinery is 8 percent of
refinery capacity is calculated by the difference in the forecasted refinery capacity. The total hydrogen
forecasted refinery capacity and installed capacity demand includes hydrogen as feedstock, fuel, and
(250.3 MTPA in 2022). heating source in a refinery.
Table 11: Calculated Values for Hydrogen Demand in Refinery (MMTPA)
Year 2022 2023 2024 2025 2026 2027 2028 2029 2030
Additional
Refinery 0.20 20.87 28.94 37.06 46.40 54.64 63.67 72.98 82.55
Capacity
Hydrogen
0.00 0.28 0.39 0.50 0.62 0.74 0.86 0.99 1.11
Demand (New)
Hydrogen
Demand
2.93 3.21 3.32 3.43 3.54 3.66 3.79 3.91 4.04
Realistic (Feedstock
Scenario Total)
Fuel Demand in
20.04 21.69 22.34 22.99 23.68 24.40 25.12 25.86 26.63
Refinery
Hydrogen
Demand (For 0.00 0.13 0.26 0.41 0.56 0.72 0.89 1.06 1.25
Heating)
Total Hydrogen
2.9 3.3 3.6 3.8 4.1 4.4 4.7 5.0 5.3
Demand
Additional
Refinery 0.20 6.43 21.62 36.47 49.25 62.58 76.47 91.23 89.67
Capacity
Hydrogen
0.00 0.10 0.32 0.55 0.74 0.94 1.15 1.37 1.35
Demand (New)
Hydrogen
Demand
2.93 3.02 3.25 3.47 3.67 3.87 4.07 4.30 4.27
Optimistic (Feedstock
Scenario Total)
Fuel Demand in
20.04 20.54 21.75 22.94 23.96 25.03 26.14 27.32 27.20
Refinery
Hydrogen
Demand (For 0.00 0.18 0.38 0.61 0.85 1.10 1.38 1.69 1.92
Heating)
Total Hydrogen
2.9 3.2 3.6 4.1 4.5 4.1 5.5 6.0 6.2
Demand
35
Year 2022 2023 2024 2025 2026 2027 2028 2029 2030
Additional
Refinery 0.20 20.87 28.94 37.06 45.71 54.57 63.62 72.81 78.98
Capacity
Hydrogen
0.00 0.25 0.35 0.44 0.55 0.65 0.76 0.87 0.95
Demand (New)
Hydrogen
Demand
2.93 3.18 3.27 3.37 3.48 3.58 3.69 3.79 3.88
Conservative (Feedstock
Scenario Total)
Fuel Demand in
20.04 21.69 22.34 22.99 23.68 24.39 25.11 25.80 26.34
Refinery
Hydrogen
Demand (For 0.00 0.06 0.13 0.20 0.28 0.36 0.44 0.53 0.62
Heating)
Total Hydrogen
2.9 3.2 3.4 3.6 3.8 3.9 4.1 4.3 4.5
Demand
The hydrogen demand in refineries will be between of 7.82 percent from 2022 to 2030 in the realistic
4.5 MMTPA and 6.2 MMTPA in 2030, with a CAGR scenario.
Figure 13: Total Hydrogen Demand in Refineries (MMTPA)
7
6.2
6
5.3
5 4.5
4.1
4 3.8
2.9 3.6
3
0
2022 2023 2024 2025 2026 2027 2028 2029 2030
Realistic scenario Optimistic scenario Conservative scenario
36
3.3.3 Iron and Steel The historic production of crude steel and finished
steel has been analysed through various processes.
From January to December 2019, India held the The future growth trajectory of GDP for different
position of the world’s second-largest producer of scenarios (as mentioned in Table 12) was used
crude steel, with a provisional production of 111.25 to calculate iron and steel production as per the
million tonnes, representing a growth rate of 1.8 regression, coupled with forecasted GDP as used to
percent compared to the corresponding period of the project the natural gas demand. The share of different
previous year . Further, From January to December
34
processes in forecasted iron and steel production,
2019, India maintained its position as the top global penetration of hydrogen in different processes, and
producer of direct reduced iron (DRI) or sponge hydrogen-based capacity installation was linearly
iron, with a production of 36.86 million tonnes. This varied to reach the mix listed in Table 12. The forecast
marked a growth rate of 7.7 percent compared to the for hydrogen demand from different production
same period in the preceding year 35
processes was calculated using calorific values, to
arrive at the trajectories for hydrogen demand under
Hydrogen can replace furnace oil, natural gas, and different scenarios.
LPG as the fuel in basic oxygen furnace- and electric
arc furnace-based sub processes in the steel sector.
It can also be used as a reducing agent in these
processes over natural gas and coal.
Table 12:Assumptions for Hydrogen Demand in Iron and Steel Sector for Different Scenario
Demand Driver BAU

Three scenarios of GDP growth rate have been considered
Realistic: GDP growth of 7% by 2030
GDP Growth Rates
Conservative: GDP growth of 6% by 2030
Optimistic: GDP growth of 8% by 2030
For 2030: BF-BOF: 60%,
Penetration Rate
Electric arc furnace: 32%; Induction furnace: 8%
Penetration in existing heating processes (as fuel) is expected to be around 40%
in 2030. Penetration in existing reducing processes of coal DRIs is expected to be
around 40% in 2030 (use as feedstock)
Penetration Rate: Penetration in reducing processes of additional coal DRIs is expected to be around
Process Wise 100% in 2035 (use as feedstock)
Penetration in existing reducing processes of gas DRIs is expected to be around
100% in
2028 (use as feedstock)
34 https://steel.gov.in/sites/default/files/MOSAR_2020.pdf
35 https://newsonair.com/2022/04/26/production-of-steel-indi-
as-sterling-performance/
37
Demand Driver BAU

Realistic: All BF-BOF capacity installation post 2030 will be hydrogen-based
Hydrogen-
Based Capacity Conservative: All BF-BOF capacity installation post 2035 will be hydrogen-based
Installation
Optimistic: All BF-BOF capacity installation post 2027 will be hydrogen-based
Hydrogen
Consumption Per
Tonne of Hot Metal 28 kg/tonne
(For Gas Steel Plant
Capacity)
Hydrogen demand in the iron and steel sector is sim- a competitive technology is only expected to become
ilar in the realistic and conservative scenarios since commercially viable after 2030.
the technology to use hydrogen in the production of
iron and steel is still in the development phase, and Therefore, the growth will be gradual. Demand will
grow at a CAGR of 62 percent in the realistic scenario.
Figure 14: Hydrogen Demand Projection in Steel and Iron Sectors (MMTPA)
2.5
Hydrogen demand (MTPA)
1.5
0.5
0
2023 2024 2025 2026 2027 2028 2029 2030
Realistic scenario 0.06 0.13 0.24 0.42 0.66 1 1.34 1.73
Conservative scenario 0.06 0.13 0.24 0.42 0.66 1 1.34 1.73
Optimistic scenario 0.06 0.13 0.24 0.42 0.66 1.14 1.62 2.17
Realistic scenario Conservative scenario Optimistic scenario
3.3.4 Chemicals: Methanol and Hydrogen imports remaining high. This is primarily a result of
Peroxide a large portion of methanol production coming from
natural gas, which is abundantly available in West
India’s methanol industry is relatively small, with Asia at extremely low prices. The sector is expected to
a demand of approximately 2 MT 36
from industrial witness a 6.6-percent growth rate by 2030.37 The GoI
users to produce chemicals. Nonetheless, the demand has ambitious plans to expand the domestic methanol
is expected to grow rapidly, with the share of methanol industry, using coal-to-methanol technologies. The
36 The potential role of hydrogen in India 2020 37 ICF primary research
38
goal is for methanol to displace oil products in major CAGR of 6 percent. As of 2020, India is a net
end–use sectors, such as transport (road, rail, and importer, with approximately 23 percent of its
shipping), industry (distributed generators, boilers, demand being met by imports. Hydrogen peroxide
heaters), and residential (heating and cooking). demand is expected to grow at 6.9 percent by 2030.
According to the plan prepared by NITI Aayog, The major factors driving this progression include
Indian high ash coal, stranded gas, and biomass can the growing worldwide demand for pulp and paper,
produce 20 MT of methanol annually by 2025. along with the increased production of propylene
oxide. The increased demand from the textile
The demand for hydrogen peroxide in India is industry and the paper and pulp sectors is in the form
approximately 165 KTPA, growing at a historical of bleaching agents, where it is used as a raw material
for manufacturing propylene oxide.
Figure 15: Status of Methanol Usage in India (MMTPA)
3 100%
90%
2.5
80%
70%
2
Import %
60%
MTPA
1.5 50%
40%
1 CAGR 6% 30%
20%
0.5
10%
0 0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Production Net import Consumption Import %
Figure 16: Status of Hydrogen Peroxide usage in India (MMTPA)
0.3 25%
0.25
20%
0.2
15%
Import %
MTPA
0.15
10%
0.1
5%
0.05 CAGR 6%
0 0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Production Net Import Consumption Import Share %
39
Three scenarios have been taken to estimate the CAGRs (see Table 13). To reduce import dependen-
growth in methanol demand, assuming methanol cies and reach the targets set by NITI Aayog, different
blending and hydrogen peroxide demand at fixed import reduction targets have been assumed in 2030.
Table 13: Assumptions for Hydrogen Demand in Chemicals Sector for Different Scenarios
Scenario Optimistic Conservative Realistic

~6.3% 7.5%
8.5%
Assuming past Assuming growth
Growth Assuming a
growth trend with starts to pick up and
Assumption significant uptake in
no additional slight blending is
Methanol methanol blending
growth achieved
Assuming methanol Assuming methanol Assuming methanol
Import
imports reduce to imports reduce to imports reduce to
Assumption
60% by 2030 85% by 2030 75% by 2030
7%
10%
Assuming the growth
Assuming hydrogen
5% is led by the growth
peroxide finds
Hydrogen Growth Assuming past of the pulp and
greater utilisation
Peroxide Assumption growth is replicated paper industry, as
across sectors with
in the future as well. it has prominent
considerable growth
demand for hydrogen
in its demand sectors.
peroxide
Hydrogen demand from methanol is calculated tak- Hydrogen demand in chemicals ranges between 0.1
ing from the standard factor considered by IEA in its MTPA in the conservative scenario to 0.34 MTPA in
estimations for hydrogen consumption per kilogram the optimistic scenario. Methanol is responsible for
of methanol produced. Using the chemical synthesis over 80 percent and then over 92 percent of the to-
reaction, hydrogen requirement per kilogram of hy- tal hydrogen demand from the chemicals sector in
drogen peroxide produced was computed, which was 2030, primarily because of the NITI Aayog’s focus on
then used to determine the demand. the methanol economy. Additionally, another factor
for its higher growth rate is that methanol is a much
larger sector than hydrogen peroxide.
Table 14: Hydrogen Demand for Each Chemical (MTPA)
Scenarios Chemicals 2022 2023 2024 2025 2026 2027 2028 2029 2030
Hydrogen Peroxide 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01
Conservative
Methanol 0.04 0.04 0.05 0.05 0.06 0.06 0.07 0.08 0.09
Hydrogen Peroxide 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01
Realistic
Methanol 0.04 0.05 0.06 0.06 0.08 0.10 0.12 0.14 0.16
HydrogenPeroxide 0.01 0.01 0.01 0.01 0.01 0.01 0.02 0.02 0.02
Optimistic
Methanol 0.06 0.08 0.10 0.12 0.15 0.19 0.23 0.27 0.32
40
Figure 17: Total Hydrogen Demand from Chemicals (MTPA)
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
2022 2023 2024 2025 2026 2027 2028 2029 2030
Conservative scenario 0.05 0.05 0.06 0.06 0.07 0.07 0.08 0.09 0.1
Realistic scenario 0.05 0.06 0.07 0.07 0.09 0.11 0.13 0.15 0.18
Optimistic scenario 0.07 0.09 0.11 0.13 0.16 0.2 0.24 0.29 0.34
3.3.5 Transport sector For this study, the historical growth rates of newly
registered vehicles were analysed to forecast the total
3.3.5 .1 Road transport: vehicle registered per district across all states up to
The adoption of hydrogen as a fuel for automobiles 2030. The calculation of vehicle lifespan and the
has gained traction in India in recent years, with the determination of total annual on-road vehicles per
sector expected to experience a growth rate of 17.3 district were derived from the 2020 national-level
percent by 2030. The Ministry of New and Renewable vehicle registration data (sourced from the Ministry
Energy is actively supporting hydrogen projects of Road Transport & Highways, Government of India
across academic institutions, research organisations, (VAHAN)) using the scrappage curves. The demand
and the industry. Notable initiatives involve the for liquid (petrol/diesel) fuels was estimated using
development of internal combustion engines fueled district-wise kilometres travelled and national
by hydrogen to power two- and three-wheelers and average mileage in each vehicle category. For district-
minibuses. Additionally, two hydrogen refueling wise vehicles using CNG, projected demand was
stations have been established at the Indian Oil R&D calculated for existing gas and new gas separately
Centre in Faridabad and the National Institute of with penetration based on a tier-wise classification of
Solar Energy in Gurugram. In 2020, the ministry districts. Assessing past trends and new technologies,
partnered with NTPC Limited to propose the launch appropriate penetration was applied for future
of a pilot fuel cell bus project. Few other initiatives
38
projection for EVs and FCEVs.
are also underway for instance, in 2019, Tata Motors
launched a hydrogen fuel cell bus in collaboration The blending of hydrogen with CNG and the use of
with Indian Oil Corporation Limited. 39
hydrogen in FCEVs are potential areas of demand.
38 https://energy.economictimes.indiatimes.com/news/renewa-
ble/mnre-and-ntpc-to-launch-hydrogen-fuel-cell-bus-project-
in-leh-mnre-secy/74242771
39 https://www.fchea.org/transitions/2020/6/9/fuel-cell-and-hy-
drogen-development-in-india
41
Using district-wise CNG demand, and based on scenario will be 0.027 MTPA by 2030. If the BIS
stakeholder consultations and global studies, the 15490 stipulation (a 2 percent hydrogen limit in CNG
optimistic, conservative and realistic scenarios for cylinders) is considered, that will result in hydrogen
hydrogen compressed natural gas adoption were es- demand of 0.017 MTPA by 2030. CNG cylinders are
tablished (see Table 15). the major limitation for blending, but if alleviated
through R&D, the realistic scenario of 0.51 MTPA hy-
Due to lower blending percentages of hydrogen, the drogen demand can be reached.
maximum demand for hydrogen in the optimistic
Table 15: Scenarios for Assessing HCNG Demand
Scenario Optimistic Conservative Realistic
Optimum blending of Considering current pilot Based on stakeholder views

Definition 6% to be achieved by studies being done by GAIL and possible plans for higher
2030 and CNG blending limit blending
Assuming optimum Assuming advanced

blend can be used in Assuming no infrastructure R&D takes place, and
Indian vehicles augmentation in the future infrastructure augmentation
Assumption
Blending to be done Blending at city gate is conducted.
at all CNG retail station Blending at city gate
outlets station
Blending 2%- 2026 2% reached by 2026, and 2% - 2026
Targets 6%- 2030 then it stays constant 6% - 2030
Figure 18: Hydrogen Demand Scenarios
60.00
50.00
Hydrogen (KTPA)
40.00
30.00
20.00
10.00
0.00
2022 2023 2024 2025 2026 2027 2028 2029 2030
Optimistic scenario 0.00 0.00 2.55 5.89 12.99 21.22 30.35 40.38 51.31
Pessimistic scenario 0.00 0.00 2.55 5.89 12.99 14.15 15.17 16.15 17.10
Realistic scenario 0.00 0.00 2.55 5.89 12.99 21.22 30.35 40.38 51.31
Optimistic scenario Pessimistic scenario Realistic scenario
42
Hydrogen demand from FCEVs was estimated with iv. Final Demand: Considering fuel consumption
following assumptions: from available global models, the final hydrogen
demand is calculated.
i. FCEV Vehicle Category: Cars, buses, LCV, and
HCV were chosen as the possible market for Based on the total cost of ownership (TCO) projec-
FCEVs considering its range of benefits and the tion until 2050, EVs will continue to undercut FCEVs
Indian market. due to the first mover advantage (see Figure 19). The
TCO projection follows a similar trajectory for EVs
ii. FCEV Growth Trajectory: As a new alternative and FCEVs and will be in close range to each other by
fuel vehicle, FCEV is will likely face challenges 2030. TCO comparison shows that to promote FCE-
initially, but will eventually witness exponential Vs over EVs, the focus needs to be on capitalising on
growth due to technology development. the technical benefits of FCEVs over EVs, such as
longer range and less refuel time. These benefits are
iii. Similar Driving Pattern: FCEVs are assumed to extremely important for long range transport.
have the same vehicle kilometres travelled (VKT)
as current diesel/petrol vehicles.
Figure 19: Total cost of ownership projection till 2050
Class 8 Sleeper cab tractor TCO Class 8 Day cab tractor TCO
4
3.5 4
3 3.5
2.5 3
2.5
$/km
2
$/km
2
1.5
1.5
1 1
0.5 0.5
0 0
2020 2025 2030 2035 2050 2020 2025 2030 2035 2050
FCEV BEV Diesel ICEV FCEV BEV Diesel ICEV
Hydrogen demand of 0.1 MTPA is possible with a hydrogen demand of 0.33 MTPA. According to ICF
around 0.26 percent FCEV penetration in cars, research, FCEVs are set to be on the road as early as
buses, LCVs, and HCVs in 2030. A 0.35 percent FCEV 2027.
penetration in on-road vehicles by 2030 will result in
43
Figure 20: Total Road Transport Hydrogen Demand (MTPA)
0.45
0.38
Total Hydrogen demand (MTPA)
0.40
0.35
0.30
0.25
0.20 0.15
0.12
0.15
0.10
0.05
0.00
2022 2023 2024 2025 2026 2027 2028 2029 2030
Optimistic Conservative Realistic
3.3.6 Large industries To assess hydrogen demand (for blending with

natural gas), this study first estimated natural gas
The industries covered under this section include equivalent demand using information from previous
steel, chemicals, automobile, engineering, interactions with selected industrial units and then
pharmaceutical, glass, and refineries, among others projecting the demand based on industry/state level
(see Table 16). manufacturing growth indicators. Assuming linear
progression of replacement level based on the year
Table 16: Number of Industries of pipeline connectivity and final future mix, the fu-
ture replacement of fuels by natural gas was project-
Number of
Sector ed in three scenarios. For refineries, where hydrogen
industries
Steel 43 might directly be used for heating, penetration rates
Chemicals 20 on fuel demand were taken, which is typically 8-10
Automobile 4 percent of the refinery capacity. The projected trajec-

Engineering 6 tory of natural gas demand across large industries in
Pharmaceutical 2 India is shown in Figure 21.
Glass 19
Refinery 23
Others (including
minerals, refractory,
6
paper, dairy, metals and
aluminium)
44
Figure 21: Total Natural Gas Demand in Large Industries (MMSCMD)
30
Natural gas demand (MMSCMD)
25
20
15
10
0
2023 2024 2025 2026 2027 2028 2029 2030
Realistic scenario 10.78 13.77 16.62 17.76 18.98 20.29 21.69 23.19
Opportunistic scenario 11.07 14.25 17.3 18.66 20.13 21.71 23.42 25.26
Pessimistic scenario 10.53 13.37 16.04 17 18.02 19.1 20.25 21.47
Although hydrogen is currently not a go-to fuel for Table 17: Assumptions on Hydrogen Demand
heating due to its high cost, it may witness high levels in Large Industries
of consumption directly and through blending with
Blending
gas in the future. To project this trajectory of hydro-
in Natural
gen demand across large industries in India, this Scenario
Gas (Till
study factored in the uptake of hydrogen blending for 2030)
different scenarios. Hydrogen Blending - Realistic
4.7%
Scenario
Hydrogen Blending -
~8.9%
Optimistic Scenario
Hydrogen Blending -
~2.4%
© shutterstock.com
45
Figure 22: Hydrogen Demand in Large Industries (MMTPA) And Blending %
2.5 10.00
9.00
Hydrogen demand (MMTPA)
2 8.00
7.00
1.5 6.00
5.00
1 4.00
3.00
0.5 2.00
1.00
0 0.00
2023 2024 2025 2026 2027 2028 2029 2030
H2 demand-
0.13 0.27 0.41 0.57 0.73 0.9 1.08 1.28
Realistic
H2 demand-
0.18 0.39 0.62 0.86 1.13 1.41 1.72 1.97
Optimistic
H2 demand-
0.06 0.13 0.21 0.28 0.36 0.45 0.54 0.63
Conservative
Blending %-
0.60 1.20 1.80 2.40 2.90 3.50 4.10 4.70
Realistic
Blending %-
1.10 2.20 3.30 4.40 5.60 6.70 7.80 8.90
Optimistic
Blending %-
0.30 0.60 0.90 1.20 1.50 1.80 2.10 2.40
Conservative
3.3.7 City Gas Distribution Blending and raising it to 5 percent by circumventing the CNG
refiling stations. Technical studies are also underway
The CGD network is scattered across India. Figure to determine the limitation of hydrogen blending
23 depicts the network up to the 10th CGD bidding in India’s city gas pipeline networks based on the
round (2021) of the PNGRB. 40
type of steel used. The result of these studies will
determine the future percentage of CGD blending.
To utilise hydrogen across CGD networks in India, The end-use limitations of hydrogen blending as per
the first step is to blend hydrogen with natural gas. secondary technical reports for industrial use is 10
Infrastructure connectivity across CGD networks is percent (without technological augmentation) and is
required for quick ramping up of hydrogen blending 30 percent for commercial and industrial use.
across CGD networks.
For CGD, the demand projections have been
Hydrogen blending in CGD networks is limited by the categorised into industrial, domestic, and commercial
pipeline material used, and limitations in the end- categories. The assumptions for each category are
use applications. GAIL (India) Limited’s pilot project listed in the Table 18.
in Madhya Pradesh is aiming for 2 percent blending
40 The 11th bidding round was held in 2021. So, the map is an
accurate depiction till 2021.
46
Figure 23: CGD Network in India (MoPNG and PPAC stats)
Table 18: Key Assumptions
Industrial demand Domestic demand Commercial demand
Analysing historic growth Analysing historic growth of

Analysing historic growth of fuel of domestic LPG demand
demand and projecting future commercial LPG demand and
based on population growth projecting future demand assuming:
demand based on it assuming: forecast assuming:
• Replacement of fuels by • Replacement of commercial

• Replacement of LPG demand by natural gas to
natural gas to start from the domestic LPG
year of pipeline connection. start from the year of pipeline
demand by natural connection to the district.
gas to start from
• Reach the following
the year of pipeline • Reach the following
penetration levels in next
connection to the penetration levels till 2030,
20 years:
district. following a linear trajectory:
• Up to 33% for furnace oil,
• Reach the penetration o ~31% in the realistic
62% for LPG, 7% for diesel,
levels of 5.5% (tier scenario,
and 41% for Light Diesel Oil
+ Low Sulphur Heavy Stock 7 districts) and 10% o ~41% in the optimistic
in the realistic scenario, (tier 1 districts) till scenario, and
following a linear trajectory 2030, following a
linear trajectory ~21% in the conservative scenario
The extent of hydrogen blending is assumed to start from nil to linearly reach:
• 2% under the conservative scenario (considering current pilot studies by Gail India and no infrastructure
augmentation)
• 5% under the realistic scenario (based on stakeholder views, possible plans and technical test reports)
• ~9% under the optimistic scenario (based on infrastructure augmentation) by 2030.
47
Figure 24: Expected Natural Gas Demand Without H2 Blending (SCMD)
25
20
Natural Gas (SCMD)
15
10
0
2022 2023 2024 2025 2026 2027 2028 2029 2030
Natural Gas Demand - Industrial 13.21 14.32 15.41 16.38 17.29 18.18 19.06 19.88 20.64
Natural Gas Demand - Domestic 3.74 4.64 5.59 6.68 7.81 9.05 10.33 11.67 13.07
Natural Gas Demand - Commercial 1.06 1.25 1.45 1.74 2.16 2.70 3.38 4.03 4.63
The hydrogen demand forecast from CGD blending in India, the conservative scenario leads to an ap-
is calculated using calorific values and volumes of proximate hydrogen demand of 0.23 MTPA by 2030.
hydrogen compared to natural gas. Considering in- In the realistic scenario, approximately 0.64 MTPA
puts from stakeholders that only 2 percent blending hydrogen demand could be achieved if technical fea-
of hydrogen in CGD network is currently being done sibility for 6 percent blending is achieved in India.
Figure 25: Consolidated Hydrogen demand in CGD (MTPA)
0.70 7%
0.60 6%
0.50 5%
Hydrogen (MTPA)
0.40 4%
0.30 3%
0.20 2%
0.10 1%
0.00 0%
2022 2023 2024 2025 2026 2027 2028 2029 2030
Realistic demand (%) 0% 0% 1% 1% 2% 3% 4% 5% 6%
Conservative demand (%) 0% 0% 1% 1% 2% 2% 2% 2% 2%
Optimistic demand (%) 0% 0% 1% 1% 2% 3% 4% 5% 6%
Realistic demand 0.00 0.00 0.03 0.08 0.17 0.27 0.38 0.51 0.64
Conservative demand 0.00 0.00 0.03 0.08 0.17 0.18 0.20 0.22 0.23
Optimistic demand 0.00 0.00 0.03 0.08 0.17 0.27 0.38 0.51 0.64
48
Figure 26: Forecasted Sectoral Hydrogen Demand Till 2030
Sector wise hydrogen demand (MMT), FY 2022-2030
14
12
10
8
6
4
2
0
2022 2023 2024 2025 2026 2027 2028 2029 2030 CAGR
Others 0.31 0.37 0.37 0.37 0.44 0.56 0.67 0.72 0.66 0.11
HFCV 0 0 0.02 0.11 0.13 0.16 0.19 0.22 0.27 58.06%
FG 0.1 0.11 0.12 0.13 0.14 0.15 0.16 0.18 0.2 9.07%
OF 0.08 0.11 0.13 0.16 0.19 0.22 0.24 0.26 0.32 18.83%
Steel 0.13 0.13 0.13 0.14 0.14 0.14 0.15 0.15 0.16 2.62%
H2O2 0.33 0.31 0.34 0.37 0.39 0.43 0.45 0.48 0.49 5.15%
Methanol 0.53 0.55 0.66 0.72 0.78 0.79 0.81 0.85 0.91 7.05%
Petroleum Refinery 3.35 3.57 3.76 3.97 4.21 4.47 4.75 5.06 5.68 6.81%
Fertlizers 0.6 0.64 0.68 0.7 0.75 0.77 0.84 0.88 0.97 6.15%
Ammonia 1.74 1.85 1.96 2.06 2.15 2.30 2.43 2.66 2.96 6.89%
3.3.8 Demand from other potential industries percent of the entire broad-gauge network span-
ning 65,141 RKMs.
• Cement: Hydrogen has limited use in the
production of cement. It cannot be used as • Shipping: The EU has introduced new rules for
an ingredient or reactant in the conventional the use of hydrogen as a fuel in shipping, which
method of cement production, but it can be used will require the development of a significant
as a substitute of some fossil fuels used in the number of hydrogen refuelling stations along the
sector. coast. The regulations, which came into effect
on 1 January 2023 set out a framework for the
• Aviation: Sustainable fuels are being consid- use of hydrogen in ships, including safety and
ered globally to decarbonise the aviation indus- technical requirements. The goal is to encourage
try. At present, technological constraints, infra- the shipping industry to transition away from
structure challenges, hydrogen availability, high fossil fuels and towards more sustainable
cost, and public perception remain among the energy sources. Similarly, for the integration of
leading challenges for adoption of hydrogen in green hydrogen into the shipping sector, India
aviation. would require updated regulations governing
the utilisation of hydrogen as a shipping fuel.
• Railways: The Indian Railways’ ‘100 percent Moreover, the establishment of dedicated
electrification’ mission can potentially create a bunkering infrastructure is crucial. This entails
demand for hydrogen. As of March 31, 2022, In- the creation of hydrogen refueling stations and
dian Railways has electrified 52,247 route kilom- the implementation of bunkering facilities at
eters (RKMs), encompassing approximately 80 ports.
49
3.4 Identifying green hydrogen ‘early adopter’ most commonly used fertiliser constituting around
sectors 60 percent41 of the total fertiliser demand. However,
there are other various grades of complex fertilisers
The industries that currently use natural gas as a as well with different nitrogen contents. Diammoni-
feedstock can be the ideal sectors to become the early um phosphate is the most used complex fertiliser in
adopters of green hydrogen. However, while assess- India, with approximately 18 percent42 nitrogen con-
ing the shift to green hydrogen in these industries, tent.
it is important to understand the drivers of demand
for green hydrogen in each. The two key factors that The production methodology of urea using natural
are expected to drive the shift to green hydrogen are gas as the input is described below:
cost effectiveness and a greater availability of green
hydrogen. CH4 + H2O + Heat -> CO2 + 3 H2 (Hydrogen
Production)
N2 + 3 H2 -> 2 NH3 (Ammonia production –
The National Green Hydrogen Mission was approved
Haber-Bosch Process)
in January 2023, and will be implemented in a
phased manner, with an initial focus on deploying CO2 + 2 NH3 -> CH4N2O + H2O (Urea Production)
green hydrogen in sectors already using hydrogen,
and evolving an ecosystem for R&D, regulations, and The production of urea requires 0.74 MT carbon di-
pilot projects. The idea is to increase the utilisation oxide per MT of urea produced. The carbon dioxide
of hydrogen in sectors such as refineries, fertilisers produced as the by-product in the process is further
and CGD, which will also create a sustained demand utilised internally for urea production. Further, the
to support new investments in green hydrogen GoI’s subsidy outgo compensates about 76 percent43
production. of the urea production cost.
The three sectors have been considered as the poten- It further appears that the production of urea
tial demand drivers for green hydrogen as a replace- through green hydrogen will require an additional
ment for natural gas (see Table 19) source of carbon dioxide along with some configura-
tional changes in the plant, which can have a high-
Table 19: Proposed Trajectory for replace- er cost impact on the overall production. This might
ment of Natural Gas to Green Hydrogen further lead to an increase in the subsidy burden on
the government. Given these concerns, urea has been
Sector 2025-26 2029-30
excluded from the purview of the proposed targets.
Refining 10% 50%
Fertiliser The trajectory proposed for non-urea fertilisers is
15% 50%
Production
shown in the Figure 27.
City Gas
5% 10%
Distribution
3.4.1 Fertiliser
The fertiliser industry utilises natural gas to produce

ammonia, which acts as the main intermediary in 41 https://www.teriin.org/sites/default/files/2021-07/Report_on_
The_Potential_Role_of_%20Hydrogen_in_India.pdf
providing nitrogen to all nitrogen-containing fertil- 42 https://www.teriin.org/sites/default/files/2021-07/Report_on_
isers. Among the nitrogenous fertilisers, urea is the The_Potential_Role_of_%20Hydrogen_in_India.pdf
43 Draft NHEM
50
Figure 27: Volume Replacement in Fertiliser44
Non-urea Fertiliser
- FY 26 –30(MMSCMD)
3.29
3.50
3.00
2.50
2.00
1.55
1.50 0.99
1.00
0.47
0.50 3.10 3.10
0.00
2025-26 2029-30
NG demand (Non-Urea) NG replaced (Non-Urea) Green H2
Source- ICF Analysis
As indicated in Figure 27, by 2030, green hydrogen Further, only the production of hydrogen from a hy-
demand in non-urea fertiliser will be equivalent to drogen generation unit (producing on-demand hy-
1.55 MMSCMD of the natural gas demand. This is ex- drogen) has been considered for the green hydrogen
pected to replace approximately 4 percent of the total trajectory. Accordingly, the proposed target for refin-
natural gas demand in the fertiliser sector. eries is provided in Figure 28.
3.34.2 Refinery By 2030, green hydrogen demand in refineries will

be 35.16 MMSCMD, which is equivalent to natural
In refineries, hydrogen is mainly used for processing gas demand of 16.62 MMSCMD. The share of natu-
crude oil into refined products and for desulphurisa- ral gas demand in hydrogen generation units have
tion. Historically, naphtha was used to produce hy- been considered at 50 percent (2026) and 55 percent
drogen through onsite catalytic reformation, which (2030). The increase in the share of hydrogen gen-
required hydrotreating and hydrocracking processes. eration units between 2026 and 2030 is because of
With the growing demand for naphtha in petrochem- a lower sulphur content and the shift from diesel to
ical refineries to maximise profits, natural gas refor- petrol. This will replace approximately 28 percent of
mation gradually supplanted the previous method the total natural gas demand in refining.
over time. Further, hydrogen is also produced as a
by-product during the refining process. However, the
volume of the by-product hydrogen is insufficient to
meet the total refinery hydrogen demand. All the re-
fineries have onsite hydrogen production units using
natural gas or naphtha reforming.
44 Natural Gas Consumption per Ton of H2 production is 4 Ton.

Natural Gas supply to non-urea fertiliser is considered as 5%
of total supply
51
Figure 28: NG Volume Replacement in Refinery
Refinery, FY 26 –30(MMSCMD)
70.00
60.00
50.00
35.16
40.00
30.00
20.00 16.62
6.15
10.00
58.14 2.91 60.41
0.00
2025-26 2029-30
NG demand NG replaced Green H2
3.4.3 City Gas Distribution By 2030, CGD will have 10 percent blending of green
hydrogen by volume, replacing 5.04 MMSCMD of
This sector is expected to uptake hydrogen in the natural gas.
form of blending. The proposed trajectory green hy-
drogen in CGD is shown in the Figure 29. 3.5 Ongoing developments, tie-ups, and pilot projects
With the green energy movement growing, many

companies have already forayed into the sector (see
Table 20 and Table 21)
Figure 29: Ng Volume Replacement in CGD
CGD, FY 26 –30 (MMSCMD)
60.00 12%
10%
50.00 10%
40.00 8%
30.00 5% 50.40 6%
20.00 34.56 4%
10.00 2%
1.73 5.04
- 0%
2025-26 2029-30
NG replaced NG demand Volume % to be replaced
52
Table 20:Green Hydrogen Projects Under Development
Company Segment Development/Plans Location Year

Grade: 99.999% pure 45
Jorhat
Green Production: 10 kg per day (plans to Apr 2022
Oil India Pump
Hydrogen increase to 30 kg per day in future) (Within 3
Limited Station,
Pilot Plant Technology: Anion exchange membrane Months)
Assam
electrolyser array
The goal is to establish a green hydrogen
capacity of 24,000 tonnes46 annually and
Green Andhra December
HPCL to achieve the commissioning of a green
Hydrogen Pradesh 2022
hydrogen plant with a capacity of 370
tonnes per year.
In 2021, the manufacturing capacity was
approximately 0.5 GW per year47, with
Ohmium Electrolyser Karnataka 2022
plans for swift expansion to reach 2 GW
per year.
Has floated a recent tender to procure
2-3
an electrolyser. They are looking at
locations,
GAIL Green locations to finalise a 10 MW48 plant with
including 2023
(India) Ltd Hydrogen the capability of generating 4.5 tonnes of
Madhya
green
Pradesh
hydrogen daily
Has floated tender to develop green
Indian Oil hydrogen generation facility with 7,000
Green Mathura,
Corporation MT49 annual capacity planned to build 2025
Hydrogen Panipat
Limited India’s first green hydrogen plant at its
Refinery
Has announced to float a tender for a 20
Madhya Not
BPCL Electrolyser MW electrolyser50 to build the
Pradesh Revealed
country's largest green hydrogen plant
Source- ICF secondary research
45 https://economictimes.indiatimes.com/industry/renewables/oil-india-limited-commissions-indias-first-99-999-pure-green-hydrogen-pilot-
plant/articleshow/90963593.cms
46 https://energy.economictimes.indiatimes.com/news/oil-and-gas/indian-refiner-hpcl-eyes-net-zero-carbon-emissions-by-2040/89260403
47 https://www.ohmium.com/news/ohmium-launches-indias-first-green-hydrogen-electrolyzer-gigafactory-
48 https://www.business-standard.com/article/companies/gail-seeks-to-procure-india-s-largest-hydrogen-electrolyser-121102101207_1.
html
49 https://mercomindia.com/indian-oil-floats-tender-green-hydrogen/
50 https://economictimes.indiatimes.com/industry/renewables/bpcl-green-hydrogen-unit-to-be-indias-largest/articleshow/87878954.cms?-
from=mdr
53
Table 21: Announcement on Segment-Wise Major Collaborations
Target
Company Segment Vision
Year
Explore joint development opportunities for fully
Green Hydrogen integrated renewable power generation and green
Statkraft and Not
and Ammonia hydrogen production in India, targeting domestic
Aker Horizons Revealed
Production hard-to-abate industries, such as the steel and
ammonia for domestic use and export
Greenko Group Set up 2 GW51 alkaline electrolyser factories in India
Electrolyser
and Belgium’s over the next 12-18 months to make hydrogen for 2023
Factory
John Cockerill industrial use in the country at the lowest cost
Plans to set up a manufacturing unit, R&D and a
SFC Energy Green Hydrogen
repair centre in Gurugram, Haryana. They have Not
and FC and Methanol Fuel
also revealed their introduction of the EFOY Revealed
TecNrgy Cells
Hydrogen Fuel Cell in the Indian market.
The large-scale production of alkaline water
L&T and Electrolyser Not
electrolysers utilising HydrogenPro technology for
Hydrogen Pro Factory Revealed
the Indian market in gigawatt capacity.
Recently signed a binding term sheet for the
IOCL, L&T Not
Green Hydrogen formation of a joint venture company to develop
and Renew Revealed
India’s nascent green hydrogen sector
Examine the prospects for green hydrogen project
Technip
development in various sectors within India, such
Energies and Not
Green Hydrogen as refining, petrochemicals, fertilisers, chemicals,
Greenko ZeroC Revealed
and power plants, with the aim of expediting the
Private Ltd
nation's energy transition.
JSW and
Announcement on green hydrogen for steelmaking
Fortescue
Green Hydrogen and hydrogen mobility. Plans to announce first 2030
Future
green hydrogen project soon
Industries
At the 2021 International Climate Summit,
outlined a 1-1-1 vision to trim the cost of hydrogen
to under US$1 per 1 kg in 10 years52.
The company is developing four giga factories,
which include an integrated solar PV module
Reliance Green Hydrogen/
factory, an advanced energy storage battery
Industries Electrolyser 2025
factory, an electrolyser factory for the production
Limited Factory
of green hydrogen, and a fuel cell factory.
In January 2022, announced plans to invest
US$75 billion53 in renewables infrastructure,
including generation plants, solar panels, and
electrolysers.
51 https://economictimes.indiatimes.com/industry/renewables/greenko-john-cockerill-to-set-up-2-electrolyser-giga-factories-for-green-hy-
drogen/articleshow/90784080.cms
52 https://www.business-standard.com/article/economy-policy/mukesh-ambani-sees-green-hydrogen-costs-coming-down-to-1-per-kg-in-
10-yrs-121090300540_1.html
53 https://economictimes.indiatimes.com/industry/renewables/mukesh-ambanis-75-billion-plan-aims-to-make-india-a-hydrogen-hub/article-
show/89215398.cms
54
Target
Company Segment Vision
Year
Aims to be a major producer with annual
capacities of about 10 million tonnes by 203054
Acme Green Hydrogen 2030
Plans to invest US$6.7 billion55 in green hydrogen
project in Karnataka
Develop a 5 MW hydrogen generation plant. It is
running a pilot project at its Vindhyanchal unit, Not
NTPC Electrolyser
where the cost of hydrogen is estimated to be Revealed
around US$2.8-3/kg56
Invited bids to select electrolyser technology
provider(s) for a period of two years for Proton
Not
NTPC Electrolyser Exchange Membrane and non-Proton Exchange
Revealed
Membrane technology of 400 MW and 600 MW,
respectively57
© shutterstock.com
54 https://www.eqmagpro.com/acme-eyes-10-million-tonnes-green-hydrogen-ammonia-capacity-by-2030-chairman-manoj-upadhyay-says/
55 https://www.livemint.com/industry/energy/acme-group-to-invest-6-7-billion-in-green-hydrogen-project-in-karnataka-11654512422437.
html
56 https://www.livemint.com/industry/energy/five-indian-companies-leading-the-green-hydrogen-revolution-11636369476063.html
57 https://mercomindia.com/ntpc-invites-bids-from-electrolyzer-technology-providers/
55
4
Hydrogen production
technologies and pricing solar, and wind. The most common methods used in
industries to produce hydrogen are SMR and elec-
4.1 Hydrogen production methods

trolysis. Some of the most common techniques cur-
rently being used or researched to produce hydrogen
are listed in the Table 22.
Hydrogen can be produced from different processes
using both conventional and alternative energy re-
sources, such as natural gas, coal, nuclear, biomass,
Table 22: Production Processes of Hydrogen
S. No. Processes Description
1 Thermochemical Processes
• Natural gas contains methane (CH4) that can be used to produce

hydrogen through thermal processes, such as SMR and partial
SMR (also called
oxidation.
1.1 Natural Gas
Reforming)
• About 95%58 of the hydrogen produced in the US is through natural
gas reforming in large central plants.
• Gasification is a process that converts organic or fossil- based

carbonaceous materials at high temperatures (>700°C).
1.2 Biomass Gasification • This is a regulated procedure that utilises heat, steam, and oxygen to
transform biomass into hydrogen and other substances, all without
involving combustion.
Biomass-Derived • Fluids sourced from biomass materials, such as ethanol and bio-oils,
1.3
Liquid Reforming can be reformed to generate hydrogen through a process akin to SMR.
• Thermochemical water splitting uses high temperatures (from

Solar
concentrated solar power or from the waste heat of nuclear power
1.4 Thermochemical
reactions) and chemical reactions to produce hydrogen and oxygen
Hydrogen
from water.
2 Electrolytic Processes
• Electrolysis presents a viable prospect for producing carbon-free

hydrogen using renewable and nuclear resources.
• It employs electricity to separate water into hydrogen and oxygen.

2.1 Electrolysis
• This technology is mature and accessible in the market, with ongoing
developments in systems that can effectively harness intermittent
renewable energy.
58 https://www.energy.gov/eere/fuelcells/hydrogen-production-natural-gas-reforming
56
Hydrogen Production Technologies and Pricing
S. No. Processes Description
3 Direct Solar Water Splitting Processes
· Hydrogen is derived from water by harnessing sunlight and specialised

semiconductors known as photoelectrochemical materials. These
3.1 Photoelectrochemical
materials utilise light energy to directly break down water molecules
into hydrogen and oxygen.
4 Biological Processes
· Microbial biomass conversion methods leverage the capacity of

Microbial Biomass
4.1 microorganisms to consume and break down biomass, liberating
Conversion
hydrogen in the process.
· This process utilises microorganisms and sunlight to convert water, and

4.2 Photobiological
occasionally organic material, into hydrogen.
4.2 Cost of producing hydrogen through SMR method works, electricity (where relevant), and gas grid
connection
SMR represents a well-established production meth-
od, where an external heat source supplies high-tem- • Operating expenditure, which includes water,
perature steam for the reforming reaction that gener- chemicals, and catalysts, direct labour, admin-
ates hydrogen and carbon dioxide from a gas source, istration/supervision, utilities, and maintenance
like methane. Any excess steam can be used to gener-
ate power, which is sufficient to meet the power de- The capital costs, operating and maintenance cost,
mand of the overall plant. and performance characteristic were accessed
through secondary research and stakeholder consul-
The overall cost of producing hydrogen through SMR tations. During our research and subsequent stake-
consists of three major components: holder consultations, it was found that capex ac-
counted for over 50 percent of the total cost. The cost
• Natural gas price breakdown is shown in Figure 30.
• Capex, which includes reformer unit, power is-

land (steam turbine), balance of plant, civil
57
Figure 30: Grey Hydrogen Production Cost Breakdown
Cost Breakdown of SMR Technology at Plant Capacity of 607 TPD Operating cost breakup
Labor Supervision
2% and
administration
1%
O&M
25%
Raw
Materials
40%
0 100 200 300 400 500
$M Utilities
32%
Operating Costs ($M/year) Capital Costs ($M)
Source- https://doi.org/10.1016/j.enconman.2022.115245
It was further found that the natural gas required for 4.3 Cost of producing hydrogen in Chloralkali plants
grey hydrogen production is 0.18 GJ/kg, which costs
around US$9/MMBTU. The average cost of produc- In India, natural gas-based hydrogen production is
ing grey hydrogen is around US$2/kg (about INR captive in nature, whereas the hydrogen produced
160/kg). 59
through electrolysis is generally produced in chloral-
kali plants in the form of a by-product, which is then
sold in the merchant market. Hence, the current hy-
drogen price in India for merchant sale has no corre-
lation with RLNG.
Figure 31: Chlor-alkali manufacturing process
Compression
Caustic Cooling
i/p - and
Power Filtration
i/p -
Sodium
Chloride
Hydrogen
Reforming
and
i/p - Purification
Water
Chlorine
59 Stakeholder interaction
58
During stakeholder consultation with one of the larg- 4.4 Cost of producing green hydrogen
est chloralkali manufacturers in India, it was found
that although hydrogen is produced as a by-product, Green hydrogen is produced through the process of
it is considered a ‘co-product’ (and not a ‘by-prod- electrolysis. The electrolyser used in the process of
uct’) when calculating the production cost because electrolysis is composed of two key components: the
the produced hydrogen is conditioned further to stack and the system. The stack is where the water is
make it storable and saleable. split, while the system comprises of the power sup-
ply, water supply, purification, and compression.
It was also found that in 2021, the average cost of
producing hydrogen was estimated to be INR 14-15/ While the core principle of water electrolysis remains
Nm3 (~INR 155-166/kg), including the cost of con- consistent among all technologies, the construction
ditioning hydrogen (cooling, filtration, and compres- process incorporates varying physiochemical and
sion costs). electrochemical factors. Consequently, four distinct
technology types are available for generating green
The selling price of hydrogen is currently at a pre- hydrogen: alkaline electrolysis, proton exchange
mium of 40-50 percent of the production cost. The membrane electrolysis, anion exchange membrane
current price of hydrogen in the merchant market electrolysis, and solid oxide electrolysis. See Table
is around INR 20/Nm3 (~INR 220/kg). This price 23 for the characterisation of the four types of water
is decided based on the overall cost of production, electrolysis.
which is further driven by certain market factors,
such as the market price of competitors in the catch-
ment area, demand, and supply.
Table 23: Characterisation of Electrolyser Technologies
Efficiency H2 Purity Operating Capital Cost ($/

Technologie
(%) (%) Hours kW)
Alkaline Electrolysers 70 99.5 60,000-90,000 430–900
Polymer Electrolyte
66 99.9999 30,000-90,000 667–1,450
Membrane
Solid Oxide
55 99.9 10,000-30,000 2,300–6,667
Electrolyser
Anion Exchange
69 99.99 - >931
Membrane
Source- ORF60
Electrolysis processes are technologically advanced; 60,000-90,000 operational hours. Its stack compo-
for instance, alkaline electrolysis and proton ex- sition makes it the cheapest available technology. The
change membrane electrolysis have a technology proton exchange membrane electrolysis process has
readiness level exceeding 7. The alkaline electrolys-
60
higher capital costs due to the requirement of more
er is a well-established technology with a stack life of expensive catalyst materials. The quick ramp-up and
60 https://www.orfonline.org/expert-speak/indias-leader-
ship-in-green-hydrogen/
59
ramp-down sequences makes proton exchange mem- tions mentioned in Table 24.
brane electrolysis the most suited for coupling with
proprietary renewable sources. The anion exchange i. Capacity utilisation rate = 98%
membrane electrolysis and solid oxide electrolysis
stack stability and durability are still unclear. ii. Water use = 15 kg/ kg H2
There are four key cost drivers of these systems: iii. Water cost= US$0.28 / kg H2
stack, power electronics, gas conditioning, and bal-
ance of plant. The stack involves about 50–6061 iv. Purchased electricity use = 50 kWh/kg H2
percent of the total cost. The projected cost of pro-
ducing green hydrogen through alkaline electrolysis v. Cost of electricity= US$ 0.056 /kWh
and proton exchange membrane electrolysis at large
capacities (1 GW) have been evaluated based on the
following common assumptions and the key assump-
Table 24: Key Assumptions for Green Hydrogen Cost Projection
Assumptions Units Large PEM Large Alkaline

Capacity MW 1,000 1,000
Life of Plant Years 20 20
Capex $/kW 670 437
Stack Cost (to be replaced after 10 years) $/kW 400 200
Operating expenditure % of capex 0.5 0.5
Annual Hydrogen Production KTPA 113.31 120.19
Electrolyser Efficiency % 66 70
Electricity Requirement (per kg of H2) kWh 50 50
Water Requirement (per kg of H2) Kg 15 15
Electrolyser Efficiency Escalation % 0.36 0.1
Yearly Escalation of Capital Cost % -2.5 -1.5
Yearly Escalation of Electricity Cost % -5
Yearly Escalation of Water Cost % 1
Electricity Requirement Escalation % -0.35
Based on the assumptions above, the green hydrogen cost has been projected till 2030 in Figure 32.
61 https://www.oxfordenergy.org/wpcms/wp-content/up-
loads/2022/01/Cost-competitive-green-hydrogen-how-to-low-
er-the-cost-of-electrolysers-EL47.pdf
60
Figure 32: Green Hydrogen Cost Projection at Factory Gate in India
Cost of Green Hydrogen Production ($/kg)
4.5 3.9
4.0
3.5
3.6 2.7
3.0
2.5
2.0 2.5
1.5
1.0
0.5
0.0
2022 2023 2024 2025 2026 2027 2028 2029 2030
PEM GH Alkaline GH
We estimate that, until 2030, hydrogen from alkaline consultations are presented in Chapter 6.
electrolysis will remain economical as compared to
the proton exchange membrane electrolysis process, The key highlights from the stakeholder consulta-
with the cost differential between the two decreasing, tions are:
from US$0.3/kg (2022) to US$0.2/kg (2030).
• Given the declining costs for solar PV and wind
4.5 Cost viability of green hydrogen for C&I players generation, building electrolysers alongside re-
in India newable energy sources could provide a low-cost
supply option for hydrogen.
Preliminary findings suggest that the widespread
adoption of green hydrogen in India’s C&I sector is • The prevailing elevated LNG prices will contrib-
challenging due to its high cost of production. It is es- ute to boosting the competitiveness of green hy-
sential to reduce the production cost of green hydro- drogen. Nevertheless, a substantial reduction in
gen to make it a commercially viable fuel source or prices primarily hinges on innovations in electro-
feedstock. For a smooth transition to green hydrogen lyser technology, which is unlikely to be achieved
and to overcome the primary obstacles, significant in the near future to the extent of halving the
investments from the corporate sector and addition- current green hydrogen costs. It was also em-
al incentives from the government and regulators are phasised that, for such viability in the immediate
required. For green hydrogen to become cost-com- future, the introduction of carbon taxes can exert
petitive and globally viable, the cost needs to be re- pressure on other industries, potentially making
duced to US$2/kg or lower, which is nearly half its green hydrogen prices more economically viable.
current price.
• An important renewable energy developer said
To better understand the current market sentiment that one of the biggest challenges in the devel-
towards green hydrogen in India’s C&I sector and opment of green hydrogen and its derivatives is
to identify the challenges and support required for the lack of adequate government policy support.
a smooth transition, meetings were conducted with Currently, there is lack of policy initiatives on the
stakeholders across the value chain. Details of the demand side. Clarity and/or a waiver is needed
61
to make tangible progress on reducing the price • There is a strong need for an incentive on the
of renewable energy power, such as a methodol- supply side to make green hydrogen a viable fuel
ogy for providing 24X7 banking provision in line source. It was further stressed that the reduction
with the GoI’s intention. Also, levies such as the in renewable power cost by one or two cents can
goods and services tax (at 18 percent), the basic facilitate a reduction in green hydrogen price to
customs duty of 25-40 percent, and the electric- US$1/kg or US$2/kg.
ity duty (varies from INR 0.2 to INR 1.5 per unit
across different states) are major hurdles to re-
ducing the price of renewable energy.
© shutterstock.com
62
5
Infrastructure requirements
for hydrogen supply drogen in the current scenario is comparatively eco-
nomical, while green hydrogen stands out from other
sources of hydrogen in terms of sustainability.
There are three major components in the hydrogen
value chain—production, storage and distribution,
Notably, India’s hydrogen infrastructure is still at
and utilisation (see Figure 33)
a nascent stage of development for large-scale dis-
tribution and consumption. In the current context,
Although each part of the hydrogen value chain is at
hydrogen production and consumption have sub-
a relatively early stage of development, the produc-
stantial geographic limitations. For instance, India’s
tion and utilisation parts are majorly driven by the
western region has better access to hydrogen due to
willingness of relevant stakeholders to adapt to hy-
its proximity to the production sources. Given these
drogen than the technical feasibility of the hydrogen
gaps in the hydrogen production and storage infra-
infrastructure. The government’s push for a net zero
structure, this section explores the supporting in-
economy and the idea of using a clean fuel with eco-
frastructure currently used by hydrogen producers
nomic benefits is expected to play a major role in the
and consumers globally and documents the evolving
production and usage of hydrogen in the country.
technologies that will make the large-scale distribu-
tion of hydrogen feasible in the future.
When it comes to the distribution and storage of hy-
drogen, stakeholders’ focus is on cost effectiveness,
The infrastructure required in hydrogen distribution
safety, and sustainability. While the different stages
can be divided into two broad categories: central
in the hydrogen value chain have different driving
plant and storage, and transportation.
factors, the economic feasibility and sustainability
of a hydrogen-based economy is heavily interlinked
to the production and distribution methodology of
5.1 Central Plant and Storage
hydrogen. For instance, the production of grey hy-
Hydrogen stands out as a fuel with the highest en-
ergy-to-mass ratio among all fuels. Nevertheless, its
relatively low ambient temperature density leads to
Figure 33: The Hydrogen Value Chain
Hydrogen Production Distribution and Storage Hydrogen Utilisation
63
a reduced energy per unit volume, necessitating the under the physical-based or material-based mode
advancement of storage methods with the potential (see Figure 34)
to achieve higher energy density. On a weight basis,
hydrogen has nearly three times the energy content For industrial purposes, hydrogen is generally stored
of natural gas (120 MJ/kg for hydrogen versus 44 in its physical form, which is considered to be the
MJ/kg 62
for natural gas). However, hydrogen has a most mature hydrogen storage technology. In the
lower volume than natural gas (8 MJ/litre for liquid physical form, hydrogen can be stored as either a
hydrogen versus 32 MJ/litre for natural gas).
62
gas or a liquid. Usually, the storage of hydrogen as a
gas necessitates the use of high-pressure tanks, with
Hydrogen’s low density makes it considerably hard- tank pressures typically ranging from 350 to 70065
er to store as compared to fossil fuels. If hydrogen bar. Storing hydrogen as a liquid requires cryogenic
were to substitute natural gas in the global economy temperatures, because the boiling point of hydrogen
at present, approximately three to four times more 63
at one atmosphere pressure (1 atm) is very low, i.e.,
storage infrastructure would have to be constructed. −252.8°C.66
This would come at a cost of around US$63764 billion
by 2050, to maintain an equivalent level of energy Further, onsite hydrogen storage is used at central
security. Thus, hydrogen storage in large quantities hydrogen production facilities, transport terminals,
is expected to pose a major challenge to a hydro- and end-use locations. Current storage options in-
gen-based economy. clude insulated liquid and gaseous storage tanks. See
Table 25 for the four types of common high pressure
According to the US Department of Energy, hydro- gaseous storage vessels67.
gen can be stored using different technologies either
Figure 34: Hydrogen Storage Technologies
Hydrogen
Storage
Physical Material
Based Based
Compressed Cold/Cyro Liquid Interstitial Complex Chemical

Gas Compressed Liquid H2 Adsorbent organic Hydride Hydride Hydrogen
62 https://www.energy.gov/eere/fuelcells/hydrogen-storage 65 https://www.energy.gov/eere/fuelcells/hydrogen-storage#:~:-
63 https://data.bloomberglp.com/professional/sites/24/ text=Hydrogen%20can%20be%20stored%20physically,pres-
BNEF-Hydrogen-Economy-Outlook-Key-Messag- sure%20is%20%E2%88%92252.8%C2%B0C.
es-30-Mar-2020.pdf 66 https://www.mdpi.com/2571-8797/3/4/51/htm#:~:text=In%20
64 https://about.bnef.com/blog/hydrogen-economy-offers-prom- comparison%2C%20hydrogen%20storage%20as,20.3%20
ising-path-to-decarbonization/ K)%20%5B11%5D.
67 https://www.energy.gov/eere/fuelcells/site-and-bulk-hydro-
gen-storage
64
Infrastructure requirements for hydrogen supply
Table 25: Type of Storage Vessels
Type I All-metal cylinder

Type II Load-bearing metal liner hoop wrapped with resin-impregnated continuous filament
Type III Non-load bearing metal liner axial and hoop wrapped with resin-impregnated continuous
filament
Type IV Non-load bearing, non-metal liner axial and hoop wrapped with resin-impregnated
continuous filament.
Although compressed hydrogen is typically stored In the present scenario, large-scale, cost-effective al-
at temperatures near ambient, there is ongoing ex- ternatives like salt caverns have limited geographic
ploration of ‘cold’ (sub-ambient, but above 150 K) availability, and the expense associated with using
and ‘cryogenic’ (below 150 K) compressed hydrogen alternative liquid storage technologies often exceeds
storage options. These approaches are being consid- the cost of hydrogen production. Table 26 details the
ered due to the higher hydrogen densities that can be various storage options available globally and the as-
achieved at lower temperatures. sociated costs.
Table 26: Hydrogen Storage Infrastructure
Gaseous State Liquid State

Salt Depleted Rock Pressurised Liquid
Ammonia
Caverns Gas Fields Caverns Containers Hydrogen
Medium Small-
Large Large
Main Usage Large Volumes Small Medium
Volumes Volumes -
(Volume and Volumes – - Volumes – Volumes -
- Months, Months,
Cycling) Seasonal Months, Daily Days,
Weeks Weeks
Weeks Weeks
Benchmark
levelised cost
of storage 0.23 1.90 0.71 0.19 4.57 2.83
(LCOS) ($/
kg)68
Possible
Future
levelised cost
of storage 0.23 1.07 0.23 0.17 0.95 0.87
(LCOS)
($/kg)
Geographical Not Not
Limited Limited Limited Not Limited
Availability Limited Limited
Source- https://data.bloomberglp.com/professional/sites/24/BNEF-Hydrogen-Economy-Outlook-Key-Messages-30-Mar- 2020.pdf
68 Benchmark levelised cost of storage (LCOS) at the highest reasonable cycling rate. Source: https://data.bloomberglp.com/professional/
sites/24/BNEF-Hydrogen-Economy- Outlook-Key-Messages-30-Mar-2020.pdf
65
Of all the listed options, compressed hydrogen is the stable demand. In regions where demand is either
most widely used. In India, hydrogen is also trans- emerging or on a smaller scale, liquefaction plants,
ported as a compressed gas. liquid tankers, and tube trailers are utilised. At the
point of hydrogen utilisation, additional infrastruc-
Hydrogen produced as a by-product from the chlo- ture components, such as compression, are frequent-
ralkali industries is usually sold through merchant ly implemented.
routes, which requires long-haul transport. In such
facilities, the hydrogen is produced at a very high tem- The most common approach to transport gaseous
perature (90oC), which is then cooled and brought hydrogen is either by trucks or through pipelines.
down to ambient temperatures. Once the tempera- Since gaseous hydrogen is generally produced at rel-
ture is stabilised, it is made to pass through washing atively lower pressures (20–30 bar), it is necessary
towers to filter out impurities and come down to the to compress it to the required pressure level prior to
desired grade (99.9%) of hydrogen. The hydrogen its transport. However, the more conventional meth-
gas then flows to the gas holder, which works as a od to transport hydrogen is through trucks. Gase-
buffer vessel. In the gas holder, the gaseous form of ous hydrogen is compressed to pressures of 180 bar
hydrogen is taken to hydrogen compressors, where (~2,60069 psig) or higher into long cylinders, which
it is compressed to a pressure of 150 Kg/cm2 at the are then stacked on the truck trailers. This gives the
required ambient temperature. The gas holder reacts appearance of long tubes and is hence called tube
as a buffer to maintain the pressure inside the line so trailers.
there is no high rejection. Further, the compression
of hydrogen gas is done in multistage compressors. Liquid hydrogen transportation is most opted for
when high-volume transport is needed in the ab-
5.2 Transportation sence of pipelines. To transform hydrogen into a liq-
uid state, it needs to undergo a liquefaction process,
Hydrogen is presently conveyed from its production which involves cooling it to cryogenic temperatures.
site to the consumption point using pipelines, as well The various modes of transportation of hydrogen are
as through cryogenic liquid tanker trucks or gaseous detailed below.
tube trailers for road transport. Pipelines are typical-
ly employed in areas with substantial and expectedly
Figure 35: Hydrogen Transportation Technologies
Pipelines
Gaseous
Gaseous Hydrogen
Compression
Hydrogen
Tube Trailers
Transportation
Liquid Hydrogen
69 https://www.energy.gov/eere/fuelcells/hydrogen-tube-trail-
ers#:~:text=Gaseous%20hydrogen%20is%20com-
pressed%20to,hence%20the%20name%20tube%20trailer.
66
5.2.1 Pipelines posing existing pipelines reduces the risk of leaks or

spills that can be a cause for concern when transport-
Pipelines are widely considered to be one of the most ing hydrogen.
cost-effective and efficient methods of transporting
hydrogen over long distances. Compared to other Further, the cost of hydrogen transportation through
modes of transport, such as trucks or ships, pipelines pipelines is influenced by various factors, including
offer several advantages, including lower transpor- the compression and diameter of the pipeline. Hy-
tation costs, reduced emissions, and a more stable drogen is typically transported through pipelines at
and secure supply chain. Additionally, pipelines can high pressure to minimise its volume and reduce the
be used to transport hydrogen in large volumes, thus cost of transportation. The amount of compression
making them ideal for transporting hydrogen from required to transport hydrogen is directly propor-
production sites to consumption centres. Gaseous tional to the cost of transportation. Higher compres-
hydrogen is transported through pipelines in much sion requires more energy, and, therefore, it increases
the way that natural gas is transported today. These the cost of transportation. The diameter of the pipe-
pipelines are owned by hydrogen producers, and are line is another factor that affects the cost of hydro-
located where large hydrogen users, such as petrole- gen transportation. Larger pipelines can transport
um refineries, ammonia plants, and chemical plants, hydrogen at lower pressure and lower compression,
are concentrated. which reduces the cost of transportation. However,
larger pipelines are more expensive to construct and
Hydrogen transportation through pipelines could be instal, which also increases the overall cost of hydro-
facilitated by either repurposing the existing natural gen transportation.
gas pipelines, or by constructing new hydrogen pipe-
lines. Repurposing existing natural gas pipelines for According to the International Energy Agency,
the transportation of hydrogen is one of the cheapest the cost70 of new hydrogen pipelines with 48 and
transportation techniques for delivering large vol- <36 inches diameter will be around US$0.21/
umes of gaseous hydrogen. This option leverages ex- kgH2/1,000km and US$0.86/kgH2/1,000km
isting infrastructure, thus reducing the need for new (INR 17/kgH2/1,000km ad 67/kgH2/1,000km),
investment, and minimising the environmental im- respectively, whereas the cost of a repurposed pipeline
pact of pipeline construction. In addition, repurpos- is between US$0.11/kgH2/1,000km and US$0.32/
ing existing pipelines can reduce the time required kgH2/1,000km (or INR 8.4/kgH2/1,000km and 25/
to establish a hydrogen transportation network, as kgH2/1,000km)71
pipelines can be retrofitted and adapted for hydrogen
transportation relatively quickly. Another advantage 5.2.2 Tube Trailers:
of repurposing natural gas pipelines for hydrogen is
that it offers a secure and stable supply chain. Pipe- The vehicles responsible for transporting gaseous
lines are known for their reliability and safety, com- hydrogen are known as tube trailers. Currently, steel
pared to other modes of transportation, and repur- tube trailers are the most frequently used and have
70 European Hydrogen Backbone, Bloomberg New Energy Fo-

rum, Agora Energiewende, IEA
71 https://www.energyforum.in/fileadmin/user_upload/india/
media_elements/Presentations/20210827_Knowledge_Ses-
sion_Transport_of_Green_Hydrogen/01_Matthias_Schimm
el.pdf
67
a carrying capacity of around 380 kg72. However, nology, liquefaction consumes over 30 percent75 of
the weight of the steel tubes restricts their carrying the energy contained in hydrogen, and it is a costly
capacity. Recently, composite storage vessels, with process. Moreover, some amount of stored hydro-
capacities of 560–900 73
kg of hydrogen per trailer, gen is lost due to evaporation or ‘boil off’ of liquefied
have been developed. Such tube trailers are currently hydrogen, particularly when small tanks with a high
being used to deliver compressed natural gas in some surface-to-volume ratio are used.
countries.
Liquid Tankers: Over longer distances, hydrogen
For compressed hydrogen of 50 tpd capacity, the is conveyed in a liquid state using highly insulated,
transportation cost accounts for approximately 60 cryogenic tanker trucks. Following the liquefaction
percent of the total landed hydrogen cost. For liquid process, the liquid hydrogen is transferred to de-
hydrogen of 50 tpd capacity, the conditioning and livery trucks and then transported to distribution
storage at production site accounts for approximate- sites where it is converted back into a high-pressure
ly 40 percent of the total landed hydrogen cost . 74
gaseous product for dispensing. When it comes to
long-distance transport, using liquid hydrogen in
Further, for 50 tpd transportation, i.e., distances tanker trucks proves to be a more cost-effective op-
up to 500 km, gaseous hydrogen will incur higher tion than transporting gaseous hydrogen because
costs of approximately US$4/kg against US$0.93/ liquid tanker trucks can carry a significantly larger
kg for liquid hydrogen. For distances up to 50 km, quantity of hydrogen by mass compared to gaseous
the transportation cost of gaseous hydrogen is com- tube trailers. However, there are challenges associat-
petitive at US$0.96/kg, compared to US$0.22/kg for ed with liquid transportation, including the potential
liquid hydrogen. for boil-off during delivery.
At present, the export and import of hydrogen is not Chiyoda Corporation (Japan)76: Chiyoda initiat-
technically feasible, but hydrogen can be shipped in ed research and development efforts on a high-per-
form of derivatives. formance dehydrating catalyst as far back as 2002.
By 2011, they had achieved successful development of
5.2.2.1 Liquid Hydrogen their LOHC methylcyclohexane (MCH), which they
named SPERA. In 2013, a demonstration plant was
Liquefaction: Gaseous hydrogen is liquefied by established in Yokohama, and the SPERA technology
cooling it to below −253°C (−423°F). Once hydrogen has since reached a maturity level estimated at TRL
is transformed into a liquid form, it can be stored in 9. Aligning with the Japanese government’s Strate-
well-insulated tanks at the liquefaction plant. Lique- gic Roadmap for Hydrogen and Fuel Cells (2016),
fying hydrogen requires energy. Using current tech- SPERA technology facilitates the large-scale import
of hydrogen from abroad, such as from Australia.
72 www.energy.gov/eere/fuelcells/hydrogen-tube-trailers 75 https://www.energy.gov/eere/fuelcells/liquid-hydrogen-deliv-
73 https://www.energy.gov/eere/fuelcells/hydrogen-tube- trail- ery#:~:text=Gaseous%20hydrogen%20is%20liquefied%20
ers#:~:text=Recently%2C%20composite%20storage%20 by,the%20hydrogen%20and%20is%20expensive.
vessels%20have,natural%20gas%20in%20other%20coun- 76 https://transitionaccelerator.ca/wp-content/uploads/2020/07/
tries. HollandInnovationNetworkinChina-Hydrogendevelopments.
74 https://www.energyforum.in/fileadmin/user_upload/india/ January2019-1.pdf
media_elements/Presentations/20210827_Knowledge_Ses-
sion_Transport_of_Green_Hydrogen/05_Anish_Paunwala.
pdf
68
Figure 36: SPERA LOHC technology from Chiyoda Corporation
Hydrogenious (Germany)76: Hydrogenious has BOX. Hydrogenious has also collaborated with Hy-
entered into a collaborative agreement with Zhong- Gear from the Netherlands and VTT from Finland
shan Borad-Ocean Motor Co., Ltd. to establish the as part of the HySTOC project, funded by Fuel Cells
first pilot hydrogen refueling station utilising Liq- and Hydrogen Joint Undertaking (FCH-JU), which
uid Organic Hydrogen Carrier (LOHC) technology ran from January 2018 until the end of 2020. The
for buses in China. Hydrogenious’s technology em- HySTOC project aims to demonstrate the distribu-
ploys dibenzyl toluene as a carrier, which is presently tion of high-purity hydrogen (in accordance with ISO
available at a cost of approximately US$4 per kilo- 14687:2-2012) to commercial hydrogen refueling
gram. Platinum and palladium serve as catalysts to stations in Finland.
separate the carrier and hydrogen within the Release
Figure 37: LOHC Technology of Hydrogenious77
77 China Storage and distribution.pdf
69
Hynertech (China)76: Hynertech was established This demand category accounts for around 90 per-
in 2014 through a collaboration between the China cent78 of the total hydrogen consumption in India.
University of Geosciences (Wuhan) and various part-
ners in Jiangsu province. While specific details about With the continued development of hydrogen in-
the carrier and catalyst materials used by Hynertech frastructure and a growing emphasis on clean ener-
are not publicly disclosed, it is known that their LOHC gy,and the establishment of local manufacturing in-
desorption temperature is lower, around 200 degrees dustries across the country, there is potential for an
Celsius, as compared to Chiyoda (above 350 degrees increase in merchant demand. While the captive de-
Celsius) and Hydrogenious (above 320 degrees Cel- mand for hydrogen has increased at 2.6 percent an-
sius). Hynertech’s technology provides 99.99% pure nually since 2015, the merchant demand is growing
hydrogen, eliminating the need for additional purifi- at a CAGR of 3.7 percent79. By improving the hydro-
cation devices when used in PEM fuel cells. In 2018, gen supply chain and making hydrogen more widely
Hynertech made announcements about constructing available, it could further become a key player in the
two new production bases for its LOHC technology. transition to a low-carbon economy.
During the same year, they introduced the first fuel
cell logistics vehicle operating at normal temperature The major contributors to captive demand are indus-
and pressure in Wuhan, in collaboration with the Tri- tries such as refining, fertilisers, and chemical plants,
Ring Group and Wuhan Jinhuang Industry. while merchant demand has primarily been driven
by growing demand in optic fibre, float glass, sorb-
5.3 Modes of hydrogen supply itol, and others.80
The demand for hydrogen in India can be categorised

as ‘captive demand’ and ‘merchant demand’. At pres-
ent, the infrastructure for hydrogen supply is still in
its infancy, leading to a prevalent captive demand.
78 ICF research
79 ICF Research
80 ICF Research
70
Figure 38: Modes of Hydrogen Supply73F73F
Total Hydrogen demand (KTA)
7000
6000 CAGR – 3.7%

5000
4000
3000
CAGR – 2.6%
2000
1000
0
2015 2016 2017 2018 2019 2020 2021
Merchant supply 540 550 570 600 630 650 670
Captive supply 5050 5190 5290 5510 5680 5820 5880
© shutterstock.com
71
6
India’s policy ecosystem
and the impact on green main aim of the policy is to combat climate change
hydrogen adoption
and transform India into a green hydrogen hub. The
key highlights of the policy include:
• Green hydrogen is to be defined as the hydrogen

According to the IEA’s Global Hydrogen Review
produced by the electrolysis of water using re-
2023,81 less than 0.1 percent of the hydrogen
newable energy.
currently produced worldwide is green hydrogen. It
is safe to assume that a similar situation prevails in
• The government will waive inter-state trans-
India as well. Currently, the production cost of green
mission charges for a period of 25 years for the
hydrogen in India is around US$7 per kg, whereas
producers of green hydrogen/ammonia, but this
the production of blue and grey hydrogen using fossil
scheme is valid only for projects commissioned
fuels costs approximately US$2 per kg.82 As such,
before June 30, 2025.
the present scenario poses two major challenges
for the Indian government—incentivising the
• The government will also allow the charges for
production of green hydrogen and ensuring a smooth
the renewable energy used to make green hydro-
transition from the current blue and grey hydrogen
gen to be fixed by the state commission for a pe-
producing capacity to producing green hydrogen.
riod of 30 days.
The government has already introduced several
schemes and missions to develop the green hydrogen
• Priority will be given to the connectivity of green
sector. The Green Hydrogen Policy launched in
hydrogen stations to the inter-state transmission
February 2022, the Green Hydrogen Mission, and
system.
the aim of the Ministry of Power to produce83 5 MT of
green hydrogen by 2030 showcase the government’s
• Green hydrogen producers will be permitted to
commitment to boost the country’s green hydrogen
establish storage bunkers in close proximity to
sector.
ports.
6.1 Green Hydrogen Policy, 2022

• The renewable energy used for the production of
green hydrogen will count for the producer’s re-
The Ministry of Power released the Green Hydro-
newable purchase obligation compliance.
gen Policy84 in February 2022, identifying the need
and advantages of using green hydrogen. It also laid
• Distribution licensees will also be allowed to
down a few regulations that need to be followed. The
supply renewable energy for the supply of green
hydrogen.
81 https://www.downtoearth.org.in/blog/energy/biohydro-
gen-s-role-in-india-s-green-hydrogen-pathway-92267#:~:-
text=Despite%20increasing%20global%20political%20sup-
port,International%20Energy%20Agency%20(IEA)
82 https://www.thethirdpole.net/en/energy/india-new-hydro-
gen-world-order/
83 https://www.reuters.com/business/energy/india-plans-pro-
duce-5-mln-tonnes-green-hydrogen-by-2030-2022-02-17/
84 https://powermin.gov.in/sites/default/files/Green_Hydrogen_
Policy.pdf
72
India’s policy ecosystem and the impact on green hydrogen adoption
• The Ministry of New and Renewable Energy will growth of export markets.
establish a single portal for all statutory clearances
and permissions required for the manufacture, • Addition of renewable energy capacity of about
transportation, storage, and distribution of green 125 GW.
hydrogen and/or green ammonia. The relevant
agencies or authorities will be asked to grant • Cumulative reduction in fossil fuel imports over
clearances and permissions in a timely manner, INR 1 trillion.
with a preference for completing the process
within 30 days from the date of application. • Reduction of approximately 50 MMT of annual
greenhouse gas emissions.
• The Ministry of New and Renewable Energy
may aggregate demands from different sectors The mission will be implemented in two phases:
and invite bids for the procurement of green
hydrogen or ammonia. 6.2.1 PHASE I (2022-23 to 2025-26)
6.2 National Green Hydrogen Mission • The emphasis will be on stimulating demand and
simultaneously facilitating sufficient supply by
In January 2023, the Union Cabinet approved the enhancing domestic electrolyser manufacturing
National Green Hydrogen Mission. The key goal of capacity.
the mission is to transform India into a “global hub
for green hydrogen production, usage, and export”. • Incentives will be developed to support increas-
The mission is planned to be implemented in a ing green hydrogen production and uptake.
phased manner, aims to replace fossil fuels and feed- Usage in the refinery, fertiliser, and urban gas
stock with green hydrogen, and evolve an ecosystem sectors will also generate a consistent demand,
for R&D, regulations, and pilot projects. It will in- promoting fresh investments in green hydrogen
volve using green hydrogen in ammonia and petrole- production.
um refining, blending it in CGD systems, producing
steel, and using green hydrogen-derived fuels to re- • Furthermore, it will establish the groundwork
place fossil fuels in mobility, shipping, and the avia- for forthcoming energy transitions in other chal-
tion sectors. The mission also seeks to position India lenging-to-decarbonise industries by generating
as a frontrunner in the technology and production of the necessary research and development mo-
electrolysers and other supporting technologies for mentum.
green hydrogen.
• Pilot initiatives will be launched to kickstart a
The Ministry of New and Renewable Energy has been shift toward green practices in steel manufac-
identified as the nodal agency, and an initial financial turing, long-haul heavy-duty transportation, and
outlay of INR19,744 crore has been proposed for the shipping.
mission.
• It is expected that the scaling up of green hy-
The key highlights of the mission document include: drogen production and use, and the proposed
measures under the mission in the first phase
• Development of green hydrogen production will drive down the costs while allowing for the
capacity of at least 5 MMT per annum with greater and wider deployment of green hydrogen
potential to reach 10 MMT per annum with the in the next phase.
73
6.2.2. PHASE II (2026-27 to 2029-30) • Others: An outlay of Rs 388 crore has been pro-
posed for this sector for skill development, public
• During this stage, the feasibility of implementing awareness, and stakeholder outreach.
large-scale green hydrogen projects in the steel,
transportation, and shipping sectors will be as- 6.3 Review of current regulations for supply of
sessed. hydrogen (PESO rules)
• Pilot initiatives will be commenced in other The Petroleum and Explosives Safety Organisation
promising sectors, including railways and avi- (PESO) was established in 1898 to serve as the nod-
ation. Research and development efforts will al agency for regulating the safety of hazardous sub-
be expanded to ensure the ongoing progress of stances. Since hydrogen is highly flammable, it poses
products. a threat to property and life in the event of any neg-
ligence. Thus, PESO has provided certain rules and
• The second phase activities will enhance pene- regulations that should be followed while dealing
tration across all potential sectors to drive a deep with gases such as CNG, LPG, and hydrogen. Howev-
decarbonisation of the economy. er, as of now, PESO has not mandated a separate set
of rules for the supply of hydrogen, but hydrogen has
The mission’s proposed financial outlay has been as- been mentioned in several reports.
signed to five key areas:
PESO85 has been in operation even before the new
• Strategic Interventions for Green Hydro- green hydrogen policy was framed and had in 2015
gen Transition (SIGHT): An outlay of INR granted permission to Indian Oil to set up a hydrogen
17,490 crore has been proposed for the basket of manufacturing plant in Haryana. The following are
incentives under SIGHT to support green hydro- the key PESO rules that will have an impact on green
gen production and indigenous manufacturing. hydrogen:
• Pilot projects: An outlay of INR 1, 466 crores 6.3.1 PESO regulations for gas cylinders 2016
has been proposed for pilot projects that will be under Explosive Act, 1884
undertaken for initiating green transition in steel
production, long-haul and heavy-duty mobility, 6.3.1.1 Technical provisions of Gas Cylinder
and shipping in the first phase. Pilot projects in Rules 2016 (GCR-2016) under Explosive Act,
other potential sectors, such as railways and avi- 188486
ation, may be initiated in the second phase.
6.3.1.1.1 Cylinders used for filling compressed
• Research and development: An outlay of hydrogen gas
INR 400 crore has been proposed for this sector, The type and standards of approved cylinder and
which will be supported with an aim to increase valve are described in the schedule I of GCR-2016.
the affordability of green hydrogen production, Provisions under the schedule are:
storage, transportation, and utilisation, as well
as to enhance the efficiency, safety and reliability
of the relevant systems and processes. 85 https://www.business-standard.com/content/b2b-chemicals/
peso-grants-permission-to-indian-oil-to-set-up-hydrogen-
plant-115051100485_1.html
86 https://peso.gov.in/web/gas-cylinder-rules-2016
74
India’s policy ecosystem and the impact on green hydrogen adoption
• Testing and Filling: Cylinders are tested and 6.3.1.1.3 Storage of compressed hydrogen
inspected by the inspection authority, and there- gas cylinders
by approved by chief controller. The filling is only • Ideal Storage: Storage of compressed hydrogen
done by the licensee. gas cylinders is required to be in a cool, dry,
and well-ventilated place that is under cover.
• Valves and Cylinder Safety: Under this Additionally, the storage is suggested to be done
schedule, the cylinder valves are required to be away from boilers, open flames, steam pipes or
compiled to the IS:3224 standard. For safety any other potential sources of heat. The hydrogen
provisions of these cylinders, the manufacture cylinders are also suggested to be kept away from
and maintenance of safety relief devices fitted those cylinders that contain other toxic gases.
in the bodies of Indian manufactured cylinders
should comply with IS:5903 standard. • Properties: The storage room for the com-
pressed hydrogen gas cylinder is also recom-
• Colour: The schedule requires the colour of the mended to a room that is fire resistant. Further-
cylinders to be according to those mentioned in more, the electrical fittings in the filling and stor-
the IS:4379 standard. age area should be constructed in a flame-proof
location while conforming to IS or IEC-60079-1,
• Chemical Properties: The gas contained is IS or IEC-60079-11 or any other standard that
mandated to be free from hydrogen sulphide and must be approved by the Chief Controller.
other sulphurous impurities to the extent possi-
ble, and the moisture is mandated to be less than 6.3.1.2 Legal implications for using hydrogen
0.02 g/m3 of gas at normal temperature and cylinders under GCR-201686
pressure.
• Ownership of Cylinder: The hydrogen cyl-
6.3.1.1.2 Handling and use of compressed H2 inder is not authorised to be filled with a com-
gas cylinders pressed gas and transported unless it was charged
• Valves: Conveyors, trolleys, and cradles of ad- by or with the written consent of the owner of the
equate strength are suggested to be used in the cylinder.
valves thereby avoiding any damage.
• Testing: The hydrogen cylinders are mandated
• Safety Guidelines: For safety purposes, the to be tested periodically in accordance with pro-
cylinders should not be allowed to fall upon one visions of Schedule I of GCR-2016. The testing
another. Further, sliding, dropping, and playing should be done within the period, as specified in
with cylinders is prohibited. Also, cylinders IS:15975, or the timeline/ duration approved by
used for storage and transportation of hydrogen the Chief Controller of Explosives (CCOE).
should not be used for filling with any other gas,
except a mixture of hydrogen gas with inert gases. • Re-testing of Cylinder: A cylinder for which
the prescribed periodical re-test is due is recom-
• Transportation: Cylinders or cascades are mended to not be charged and transported, until
required to be transported as per provisions of the re-rest is properly carried out in accordance
Schedule 6 of GCR-2016. with the codes accepted by the Chief Controller.
75
• Owner’s Record: The owner of a cylinder is re- 6.3.1.3 Licensing:

quired to keep record of the life of each cylinder
owned. The record must contain the following • An applicant for a licence in Form “F” for stor-
information regarding each cylinder: age of flammable, toxic, or corrosive gases for the
purpose of sale or trading and not for own use, is
◊ The cylinder manufacturer’s name and required to apply to the district authority.
the rotation number,
• The requirement of “no objection certificate” un-
◊ The specification number to which the cyl- der the sub rule (1) is not applicable for a licence
inder is manufactured, in form “F” for storage of flammable, toxic, or
corrosive gases forming part of the cylinder fill-
◊ The date of original hydrostatic test or hy- ing plant.
drostatic stretch test or pneumatic test
• A licence in Form ‘F’ for filling or storage of com-
◊ The cylinder manufacturer’s test and in- pressed gases granted or renewed under rules
spection certificate remains in force till the 30th day of September
of the year up to which the licence is granted or
◊ Number and date of letter of approval renewed, subject to a maximum of 10 years.
granted by the Chief Controller.
In addition to the Gas Cylinder Rules, 2016, the coun-
• Filling: The filling of hydrogen cylinders re- try has also the defined the Indian Standard Code of
quires a mandatory license as specified under Safety (IS 15201: 2002)87 for the storage, handling,
GCR-2016. and transport of hydrogen. In June 2021, the Minis-
try of Petroleum and Natural Gas suggested amend-
• Transportation: A license is not necessary for ments to the Oilfield (Regulation and Development
transporting cylinders filled with a compressed Act), 198488 to include hydrogen in the definition of
gas, by a carrier or any other person if it is done “mineral oils”.
in accordance with the provisions of these rules.
However, this is applicable only if it does not
withstand Rule 43, stating that ‘No person shall
fill any cylinder with compressed gas and no cyl-
inder filled with compressed gas shall be pos-
sessed by anyone except under and in accordance
with the conditions of a licence granted under
these rules.’
• Approval: A prior approval of specification and

plan of premises that is proposed to be license
should be obtained from the CCOE/COE.
87 https://archive.org/details/gov.law.is.15201.2002/mode/2up
88 https://economictimes.indiatimes.com/industry/energy/oil-
gas/petroleum-min-proposes-changes-in-law-to-include-hy-
drogen-in-mineral- oil/articleshow/83604610.cms?from=mdr
76
7
Policy recommendations
7.1 Key issues/gaps drogen storage, transport, distribution, and fuel
cells. India is yet to develop comprehensive national
Despite the government presenting a detailed Na- regulations, codes, and infrastructure and workplace
tional Green Hydrogen Mission t`o bolster the en- safety standards governing hydrogen production,
ergy sector, India’s regulatory framework still has transportation, storage, and use. Table 27 covers
many gaps. For instance, India’s regulatory frame- some of the identified gaps in the sector that need to
work lacks many critical guidelines on safety in hy- be addressed.
Table 27 : Key Gaps Within Hydrogen Regulatory Framework
Key Gaps Description

• Lack of incentivisation for green hydrogen demand
• No green hydrogen consumption obligation targets
Hydrogen Demand
• Lack of robust carbon taxation and carbon pricing policy to incentivise
adoption of cleaner fuels
• No clear pathway to reduce production cost of green hydrogen
Cost of Production • Lack in clarity of actual incentives for different components in the green
hydrogen value chain
• No clarity on institutional set-up for the development of hydrogen and/or
hydrogen-related activities
Institutional • Clarity required on nodal agencies administering regulatory framework
Structure related to hydrogen
• Clarity required on nodal agencies to introduce/modify/update safety-
related laws in hydrogen value chain
• Lack of infrastructure for storage and transportation of hydrogen
• Lack of clarity on development of CCUS technology in the country
Infrastructure
• Lack of policy support around the development of new infrastructure or
retrofitting of existing gas pipelines for transportation of hydrogen
• Need for a hydrogen ecosystem. Lending institutions have little or no
confidence in financing hydrogen projects.
Finanzierung
• Push for green hydrogen certificates similar to Renewable Energy
Certificates is lacking
• Requirement of filling regulatory gaps for a sustainable hydrogen market
• Categorisation required for production of green hydrogen produced from
Regulation by- products (chloralkali)
• Requirement of modifications in PESO guidelines to fill in gaps regarding
long- distance hydrogen transportation using pipeline
77
As such, there is a need to review national regulations manufacturing, funding, infrastructure develop-
that define the roles of utilities and grid operators. At ment, and R&D
present, certain aspects of the market structure war-
rant regulatory frameworks that keep these entities A summary of the key points from the discussions
separate. If hydrogen deployment is successful, it with various stakeholders is provided below:
can concurrently become an integral part of the gas
network, and support electricity grid resilience and Trading Platform:
the reliability of the electricity grid. Hydrogen will, It was deliberated that due to the declining costs for
thereby, facilitate sector coupling between electricity solar PV and wind generation, building electrolysers
and gas utilities, thus creating a new role requiring with co-located renewable energy sources may become
specific regulations. There is also a need to ensure a low-cost supply option for hydrogen. Further, if the
that a standardisation framework based on nation- current high LNG prices persist, it will improve the
al or international norms is implemented and is ap- competitiveness of green hydrogen vis-à-vis grey hy-
propriately applicable to the use of hydrogen and its drogen (SMR). However, for the green hydrogen pro-
carriers. duction cost to reach the expected level (i.e., around
half of the current cost), major electrolyser technology
7.2 Stakeholder Consultations innovation is required. It was further highlighted that
for viability in near future, the applicability of carbon
Consultations with stakeholders across the hydrogen tax can create a push on other industries, which can
value chain were aimed at identifying the challenges make green hydrogen prices viable.
that pose hurdles to a smooth transition to this clean
fuel, while also gathering valuable insights on the Renewable energy developer:
needs and concerns of various stakeholders. It was highlighted that one of the biggest challenges
in the development of green hydrogen and its deriv-
Two different approaches were used for the stake- atives is the lack of adequate government policy sup-
holder consultations: port. As of now, there is a lack of policy initiatives
1. One-on-one interactions with key stakeholders, to spur the demand for hydrogen. Clarity and/or a
and waiver is required for a reduction in the price of re-
2. Roundtable discussion among the key stakehold- newable energy power. These could be in the form of
ers on sectoral challenges methodology for providing 24X7 banking provisions,
restructuring applicability of taxes (18 percent GST
These stakeholder meetings were structured around and/or Basic Customs Duty of 25-40 percent) for re-
the following key areas: ducing cost of renewable energy, and the removal of
• Views on the existing hydrogen market, includ- electricity duty, which is an extra burden on the cost
ing international bilateral programmes, demand, of renewable power. There is also a strong need for an
supply, and infrastructure, among others incentive push on the supply side to make green hy-
• Green hydrogen financing in India drogen adoptable for the C&I sector. It was further
• Opportunities and challenges in manufacturing mentioned that the reduction in renewable power
electrolysers in India cost by 1-2 cents can facilitate a reduction in green
• Necessities, opportunities, and R&D for infra- hydrogen price by up to US$2 per kg.
structure development
• Policy support for green hydrogen in terms of By-product hydrogen producer:
regulatory strengthening, demand creation, The key challenges highlighted during the stake-
gaseous hydrogen production, and electrolyser holder meeting include the lack of updated PESO
78
Policy Recommendations
guidelines for the storage, transportation, and usage within the hydrogen policy.
of hydrogen, the lack of regulation on the number of
storage days of hydrogen, the lack of clarity on the 7.2.1 Roundtable discussion:
treatment of hydrogen produced from the chloralka-
li industries in India’s hydrogen policy, and the ab- A roundtable discussion was held that brough togeth-
sence of a trading platform for hydrogen certificates. er members from WWF India and representatives
spanning the entire hydrogen value chain, includ-
A few suggestions were presented, such as the intro- ing multilateral/donor agencies, trading platforms,
duction of an incentive scheme for potential hydrogen renewable developers, pipeline infrastructure, and
consumers to set up plants near hydrogen producers others.
to ensure easy transportation using pipelines, and
the production of hydrogen using renewable energy The discussions centred around the critical challeng-
power (through rooftop model), which can be direct- es that have the potential to impede the transition to
ly utilised in vehicles (FCEVs), or any other energy green hydrogen in the future, including:
consumption points, so that it becomes a complete • Generating hydrogen demand in key sectors
renewable energy package for domestic customers. through incentivisation
• Defining a clear and effective institutional struc-
It was also deliberated that boilers can be designed ture
to use hydrogen/blended hydrogen as a fuel. Once • Providing infrastructure support for hydrogen
such boilers are designed to accept blended hydro- storage and transportation
gen, such initiatives will not only promote usage of • Securing funding support from relevant agencies
hydrogen but also help in reducing emissions. • Establishing a clear regulatory framework that
makes the hydrogen market more feasible for
Natural gas producer: commercial and industrial consumers
A few key aspects will need to be addressed to enable
the development of the green hydrogen sector. Some The roundtable discussion yielded extensive deliber-
of these include mandates for ongoing industries ation on some critical points:
like refinery and fertiliser, and new-use cases like
blending, and iron and steel. The mandate also 1. International bilateral programmes:
includes applicable and implementable policy to Two of the international bilateral programmes dis-
boost demand and a roadmap for the next 15 years, cussed during the roundtable were the strategic in-
including clarity on the mandate for each sector that itiatives between India and the UK, and India and
will act as a key driver for investors. This approach Germany.
will drive demand and the necessary infrastructure,
necessitating complementary policies for both The India-UK programme for the development of
upstream and downstream activities. For example, hydrogen, power, and renewables is a joint initiative
a robust carbon pricing system is essential for launched by the two countries. The programme aims
promoting sustainable chemicals. to promote the development of low-carbon energy
systems and technologies, and encourage collabora-
Furthermore, it was emphasised that the issue may tion between Indian and UK businesses and research
not lie with the infrastructure, but rather in deter- institutions in the energy sector. Three major pro-
mining the permissible blending percentage. There grammes launched under this initiative are:
is a pressing requirement for a comprehensive ap- • India-UK joint partnership programmes on re-
proach that encompasses all aspects of infrastructure newables and power.
79
• Climate compatible growth programme ation is imperative to bring down the cost of
• India-UK hydrogen hub producing green hydrogen, as the cost of power
constitutes a major share of the overall cost. In
The India-Germany programme is a joint initiative addition, there is an urgent need to issue proce-
launched by the two countries to promote the devel- dural guidelines for interstate banking.
opment of hydrogen technologies and systems. The
programme aims to foster collaboration between In- 3. Infrastructure for storage and
dian and German stakeholders in the hydrogen sec- transportation
tor, including businesses, research institutions, and
government bodies. The need for clarity on infrastructure support for hy-
drogen storage and transportation was stressed dur-
2. Current state of policy development in ing the discussion, and it was emphasised that action
India must be taken to address this issue.
The discussants noted that the National Green Hy- During the discussion, it was suggested that the liquid
drogen Mission document provides only limited in- form of hydrogen may be a more efficient method of
formation regarding the current status and the path- transportation than the current compressed gaseous
way for progress of hydrogen development in the form. Infrastructure initiatives are needed to support
country. The mission document falls short in elabo- this transition.
rating several crucial points, including:
• The development of a comprehensive institu- It was also highlighted that the option of utilising ex-
tional framework for hydrogen-related matters, isting natural gas infrastructure may be explored, as
such as the creation of an empowered group to the cost for repurposing is much lower. If new infra-
encompass people from various ministries structure is needed, the timeframe, capacity, and util-
• The need to expand research and development ity of such infrastructure will require extra attention.
efforts in the hydrogen sector
• Consumption obligation to encourage wide- One suggestion put forth was to view ammonia as a
spread adoption of green hydrogen potential mode of transportation rather than solely
• Ideas to be explored for establishing a robust hy- as a component for fertilisers.
drogen market
4. Investment and funding
It was further deliberated that a more exhaustive
and comprehensive hydrogen policy is required, one • To establish 160-180 GW of electrolysing capaci-
that focusses on all aspects of the hydrogen market ty and procure electrolysers at an estimated price
in India (from production to supply and storage to of US$500-US$700/kilowatt, an investment of
transportation), with an equal focus on creating an between US$250 billion and US$400 billion will
environment for research and development in India. be required over the next decade.
• Cost of hydrogen production • Creating a hub for green hydrogen will require
• It was emphasised that the cost of decentralised additional public capital investment, particularly
hydrogen generation could significantly decrease for infrastructure, such as pipelines and common
to below US$2 if the cost of round-the-clock goods, with approximately 20 percent of the
power reduces in the future. total investment directed to this purpose. Unlike
• It was further suggested that significant cost-re- grey hydrogen, most of the investments for
duction measures in renewable energy gener- green hydrogen will need to be frontloaded. The
80
projects will require a guarantee of diversified, 7.3 Policy Recommendations

stable, and long-term demand to ensure success.
• Capacity development in existing financial Based on the individual stakeholder consultations
institutions is crucial to meet the investment and the roundtable discussion, several key policy
requirements for green hydrogen projects. recommendations have been developed to make
Ensuring diversified, stable, and long-term green hydrogen a viable option for the C&I sector in
demand from projects is necessary. Early-stage India. These recommendations are listed below:
innovation financing over the next five-ten years
is also vital.
Table 28: Policy Recommendations
KEY DECISION-
KEY AREAS TIMEFRAME MAKERS/ ACTION PLAN POLICY RECOMMENDATIONS
STAKEHOLDERS
• Creation of hydrogen/ green hydrogen

• Ministry of New • International hubs to encourage research and
RESEARCH AND • Medium
and Renewable bilateral collaboration.
DEVELOPMENT Term
Energy programme • International institutions to spur
innovation
• Research on mainstream production
technologies like electrolysers
• Research on other emerging
production technologies like pyrolysis
and biomass/waste gasification
• Hydrogen can be employed in drop-in
biofuels, which are liquid fuels derived
from sources like biomass, agricultural
• Department • Funding of residues, and various wastes such as
of Science & hydrogen research municipal solid waste, plastic waste,
• Short Term
Technology, by the Indian and industrial waste. These fuels must
• Medium
Ministry of government under meet Indian standards for petrol (MS),
Term
Science & the Hydrogen high speed diesel (HSD), and jet fuel
Technology Mission and can be used, either in their pure
form or as blends, in vehicles without
necessitating any engine system
modifications. Furthermore, they
can be seamlessly integrated into the
existing petroleum distribution system.
• Exploring the adoption of hydrogen
across various industrial processes
with minimal retrofitting.
• Development
of regulatory • Nodal ministry, inter- ministerial
structure for governance, and regulatory structure
hydrogen, defining for development and regulation of all
INSTITUTIONAL • Government of the roles and activities related to green hydrogen
• Short Term
STRUCTURE India responsibilities for value chain to be clearly defined
institutionalising • Creating an empowered group for
hydrogen as a fuel smooth and efficient decision-making
similar to that of • State level policies to be encouraged
natural gas
81
KEY DECISION-
STAKEHOLDERS
• Development of specific regulations

• Defining to define safety norms, dedicated
appropriate laws hydrogen pipeline construction
• Nodal agency
and regulation norms, retrofitting of pipelines,
as defined by
• Short Term • for hydrogen storage of hydrogen, among others.
the Indian
production, • Creation/identification of specific
government
distribution, and institutions to certify the production
pricing of green hydrogen and ensure that its
life cycle emissions have been nil.
• Green hydrogen obligation for
consumers (similar to that of
• Nodal agency
renewable purchase obligation (RPO)
DEMAND as assigned • Mandatory demand
• Short Term to increase the uptake of solar and
CREATION by the Indian creation
wind power)
government
• Introduction of green hydrogen
standards and labelling programme
• There is a push in the EU to move to
greener shipping. Green hydrogen /
• Nodal agency green ammonia is being considered
• Medium as assigned • Realigning with as a possible green fuel for the future.
Term by the Indian global requirement India may look to provide green
government hydrogen / green ammonia refuelling
facilities to the global shipping
industry.
• Proactive engagements through
bilateral agreements and MoUs with
other countries (with potential future
hydrogen demand) to establish the
• Nodal agency • Development of
market for green hydrogen exports.
• Medium as assigned export hub for
• Providing appropriate land and
Term by the Indian green hydrogen/
infrastructure support to create these
government green ammonia
port facilities for hydrogen export
• Providing special status (e.g., SEZ
status) and concessions to these hubs
to ensure their cost competitiveness
• Hydrogen blending in natural gas
• Nodal agency
• Promote blending pipeline can be considered as a
as assigned
• Short Term of hydrogen with relatively easier way to achieve a
by the Indian
natural gas significant scale of hydrogen demand
government
with limited cost implications
• The Indian government should
• Nodal agency ensure accessibility to affordable
• Short/ • Providing key
COST OF GREEN H2 as assigned water resources by prioritising
Medium raw material at
PRODUCTION by the Indian water allocation to green hydrogen
Term subsidised rates
government production facilities over other
industries.
82
KEY DECISION-
STAKEHOLDERS
• Procuring bulk renewable energy

power through the Solar Energy
Corporation of India Limited (SECI)
• Ministry of
bidding process
Power (MoP)/
• Waiver of open access charges
Central
• Annual banking provision
electricity
• Mechanism to implement inter-state
regulatory
transmission system transmission
commission
charge waiver and banking.
(CERC)
• Introduction of VGF / subsidy scheme
• Department • Financial support
for hydrogen production plants
of Water for production
• Extending the PLI scheme for balance
Resources, • Increasing domestic
of plant for green hydrogen
River manufacturing of
• The Indian government should move
Development key equipment
towards creating a carbon taxation
and Ganga
and carbon pricing policy. Pilots
Rejuvenation,
for hard-to-abate sectors should be
Ministry of Jal
followed by pilots for all sectors
Shakti
• Creation of ‘green hydrogen
• Financial
certificates’ to meet sustainability
Institutions
goals. The initial focus should be on
• Donor Agencies
heavy industries and fertilisers to help
them achieve their green hydrogen
targets
• Nodal Agency
• Development of • Government support in right of way
dedicated hydrogen acquisitions
pipeline • Defining the norms and standards for
• Nodal Agency and associated hydrogen pipeline construction
• Implementing infrastructure • Defining norms and standards for
agency: Gail • Retrofitting of hydrogen transport safety
TRANSPORTATION • Medium India/ Oil India existing pipelines • Certification for standardising the
AND STORAGE Term and other • Development of usage of equipment in hydrogen
major natural pipeline for blended plants
gas distribution hydrogen • Implementing agency
company • Development of • Technical studies to test the viability
storage facilities of green hydrogen, and test the same
• Development of through pilot projects
refuelling stations • Assessing the impact of hydrogen
usage across the consumer group
• Push for creation • Trading of green hydrogen under day-
• Nodal Agency
SPOT MARKET FOR • Medium of centralised ahead market
• Indian Gas
HYDROGEN Term merchant market • Introduction of green hydrogen
Exchange (IGX)
for hydrogen certificates
83
The report was prepared at the beginning of the year 2023. Since then, the government has been actively demon-
strating a proactive stance in advancing hydrogen adoption across diverse sectors. Several initiatives which were
a part of the original recommendations within the report, have already been initiated by the government, show-
casing their proactive approach. A few of these initiatives by the govt. are highlighted in the table below:
Table 29: Recent Initiatives of Government of India
Key Area Initiatives taken by the govt. of India
Promoting Research and • MNRE has unveiled a R&D Roadmap for the National Green Hydrogen Mission (NGHM)
Development with a budget of Rs. 400 crores.
• Focus areas of the roadmap –
• Development of new materials, technologies, and infrastructure to improve
efficiency, reliability, and cost-effectiveness of green hydrogen production, storage,
and transportation.
• Prioritize safety and address technical barriers and challenges in developing a
hydrogen economy.
• An R&D scheme is under finalization by MNRE.
Development of • MNRE to be the nodal coordinating ministry for the NGHM and will undertake overarching
Institutional Structure policy formulation and programme implementation.
• An Empowered Group (EG) chaired by the Cabinet Secretary and comprising Secretaries of
Government of India and experts from industry will guide the NGHM; an Advisory Group
chaired by the PSA and comprising experts will advise the EG on scientific and technology
matters.
• After the central government announced the national green hydrogen policy, several states,
including Maharashtra, Andhra Pradesh, Uttar Pradesh, Rajasthan, etc., have notified their
own green hydrogen policies.
• The govt. of India has provided a detailed definition of green hydrogen in the MNRE
notification dated 18.08.2023.
• BEE has been appointed as the nodal authority for accreditation of agencies for the
monitoring, verification and certification for green hydrogen production projects.
Demand Creation • Outlay of ₹400 crore up to 2025-26 has been provided for Hubs and other projects.
• Government of India has come out with guidelines for undertaking pilot projects for using
green hydrogen in the shipping sector. Areas identified for as thrust areas of pilot project:
• Retrofitting of existing ships so as to enable them to run on GH2 or its derivatives
• Development of bunkering and refuelling facilities in ports on international
shipping lanes for fuels based on GH2.
• MNRE has launched pilot projects to use green hydrogen in long haul transportation sector.
The program supports deployment of green hydrogen through FCEVs and hydrogen ICE
based trucks in a phased manner.
• Outlay of ₹455 crore up to 2029-30 has been provided for low carbon steel projects.
• PNGRB has issued permission to three CGD entities for trial blending projects in their
respective authorized GAs and Hydrogen injection up to 5% vol in Natural gas has been
achieved in low pressure MDPE network.
Cost reduction of Green • MNRE has issued detailed guidelines for the PLI schemes for Green Hydrogen production
H2 Production electrolyser manufacturing under the flagship SIGHT program of National green hydrogen
mission. A budget allocation of ~17500 Crore has been done for the same.
• CSS and additional surcharge have been waived if green energy is utilized for production of
green hydrogen and green ammonia.
• Government has decided to grant waiver of ISTS charges to Green Hydrogen/Green
Ammonia.
• MNRE has proposed an exemption on duties and taxes up till 2035 on equipment imports
for setting up export oriented GH2 projects.
84
%HWZHHQ
86'WULOOLRQ
RISULYDWHFDSLWDOLQYHVWHGLQ
LQIUDVWUXFWXUHVHFWRUJOREDOO\
GHOD\HG
SURMHFWVKDYHFRVW
86'
ELOOLRQ
%\QHDUO\
86'WULOOLRQ ,QGLDQJRYHUQPHQW
WREHVSHQWRQ LQWHQGVWRVSHQG
LQIUDVWUXFWXUHDVVHWV
86'WULOOLRQ
E\RQLQIUDVWUXFWXUH
Copyright WWF-India 2024

&RS\ULJKW::)ΖQGLD
Published by WWF-India
3XEOLVKHGE\::)ΖQGLD
Any reproduction in full or part of this publication must give
$Q\UHSURGXFWLRQLQIXOORUSDUWRIWKLVSXEOLFDWLRQPXVWJLYH
credit to the mentioned publisher as the copyright owner.
FUHGLWWRWKHPHQWLRQHGSXEOLVKHUDVWKHFRS\ULJKWRZQHU
6XSSRUWHGDQG(GLWHGE\$NULWL3DUDFHU
Supported and Edited by: Preeti Lourdes John
õõ¦¯Å¯țËÚ§ 'HVLJQ*UDVVKRSSHUVΖQGLD3YW/WG
Design: Simijaison Designs

Green Hydrogen Demand Assessment

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Green Hydrogen Demand Assessment

Uploaded by

Copyright:

Available Formats

Net ZGelorobaRl oCaodrpmoraaptefoRreCneowrpaobrlae tes

Green Hydrogen Demand

Thanks for Review to:

Report Designed by:

2. Hydrogen Demand in India 17

2.1 Sectors driving hydrogen demand 17

2.2 Regional concentration of demand centres 19

2.3 Key Consumers and Suppliers 20

3. Hydrogen Demand Projection 23

3.1 Natural gas market in India: Historical and forecasted growth 23

3.2 Industries dependent on hydrogen 24

3.4 Identifying green hydrogen ‘early adopter’ sectors 50

3.5 Ongoing developments, tie-ups, and pilot projects 52

4. Hydrogen production technologies and pricing 56

4.1 Hydrogen production methods 56

4.2 Cost of producing hydrogen through SMR method 57

4.3 Cost of producing hydrogen in Chloralkali plants 58

4.4 Cost of producing green hydrogen 59

4.5 Cost viability of green hydrogen for C&I players in India 61

5. Infrastructure requirements for hydrogen supply 63

5.1 Central Plant and Storage 63

5.3 Modes of hydrogen supply 70

6. India’s policy ecosystem and the impact on green hydrogen adoption 72

6.1 Green Hydrogen Policy, 2022 72

6.2 National Green Hydrogen Mission 73

6.3 Review of current regulations for supply of hydrogen (PESO rules) 74

7.1 Key issues/gaps 77

7.2 Stakeholder Consultations 78

7.3 Policy Recommendations 81

Figure 2: Hydrogen Demand Concentration Across India 19

Figure 3: Types of Hydrogen Users 20

Figure 4: Natural Gas Market Growth In India 23

Figure 5: Overall Hydrogen Demand: Realistic Scenario 27

Figure 6: Overall Hydrogen Demand- Optimistic and Conservative Scenario 27

Figure 8: Ammonia Production Requirement – Realistic Scenario (MMTPA) 30

Figure 9: Ammonia Production Requirement – Conservative Scenario (MMTPA) 31

Figure 10: Ammonia Production Requirement – Optimistic Scenario (MMTPA) 31

Figure 11: Hydrogen Demand from Ammonia (MMTPA) 32

Figure 12: Refinery Capacity Forecast (MMTPA) 34

Figure 13: Total Hydrogen Demand in Refineries (MMTPA) 36

Figure 16: Status of Hydrogen Peroxide usage in India (MMTPA) 39

Figure 15: Status of Methanol Usage in India (MMTPA) 39

Figure 17: Total Hydrogen Demand from Chemicals (MTPA) 41

Figure 18: Hydrogen Demand Scenarios 42

Figure 19: Total cost of ownership projection till 2050 43

Figure 20: Total Road Transport Hydrogen Demand (MTPA) 44

Figure 21: Total Natural Gas Demand in Large Industries (MMSCMD) 45

Figure 22: Hydrogen Demand in Large Industries (MMTPA) And Blending % 46

Figure 23: CGD Network in India (MoPNG and PPAC stats) 47

Figure 24: Expected Natural Gas Demand Without H2 Blending (SCMD) 48

Figure 25: Consolidated Hydrogen demand in CGD (MTPA) 48

Figure 26: Forecasted Sectoral Hydrogen Demand Till 2030 49

Figure 27: Volume Replacement in Fertiliser 51

Figure 28: NG Volume Replacement in Refinery 52

Figure 29: Ng Volume Replacement in CGD 52

Figure 30: Grey Hydrogen Production Cost Breakdown 58

Figure 31: Chlor-alkali manufacturing process 58

Figure 32: Green Hydrogen Cost Projection at Factory Gate in India 61

Figure 33: The Hydrogen Value Chain 63

Figure 34: Hydrogen Storage Technologies 64

Figure 35: Hydrogen Transportation Technologies 66

Figure 36: SPERA LOHC technology from Chiyoda Corporation 69

Figure 37: LOHC Technology of Hydrogenious 69

Figure 38: Modes of Hydrogen Supply73F73F 71