Page 24 - CII ARTHA India’s Growth Prospects

Sector in Focus
according to Niti Aayog and are hesitant to under Article 6 of the Paris consider implementing a AELs operate by passing an are still primarily in the • Research & Development : scalable, and flexible Conclusion: renewables
RMI. The move encourages finance/refinance large-scale Agreement. It will help nationwide policy mandating Powering electric current through research and development The ongoing research in systems capable of advancemen
manufacturers and project green hydrogen projects. create a marketplace for the use of Green M15 fuel i.e. water in the presence of a phase. electrolyzer technology is adjusting to the variable policies.
developers to invest in green • The production cost of Indian green fuels like green mixing 15 per cent green liquid alkaline electrolyte, focused on enhancing nature of wind and solar A Golden energy; it
hydrogen and its derivatives various green fuel hydrogen and its methanol with petrol, in typically potassium or efficiency, reducing reliance power, thereby maximizing growth and
like green ammonia and technologies, such as green derivatives, green methanol, transportation and other India’s sodium hydroxide. Their Unleashing on rare materials, and hydrogen production Opportunity stewardshi
methanol, putting India among hydrogen and its and SAF, among others, in applicable sectors, supported advantages include
during peak renewable
those leading countries, such derivatives, is higher. the international market. by incentives for producers relatively lower costs and India's Green improving durability. energy generation periods. for India resources
as the United States and the However, grey hydrogen, • There’s a need for speeding and consumers to adopt this proven reliability over Efforts include developing demand, In
European Union, which have alongside various grey up strategic interventions fuel. This could be a pivotal long-term operation. Hydrogen and new catalysts that reduce India's endeavour towards global cl
allocated public funding for manufacturing methods, has for the Green Hydrogen step in India's journey Green Future: However, AELs have lower the need for precious These targeted interventions Green Hydrogen and Green Collab
green hydrogen. towards a greener and more efficiency compared to Ammonia metals, exploring will not only alleviate financial government
historically benefited from Transition Program by Ammonia heralds a pivotal
subsidies. Without a robust offering incentives for both sustainable future. newer technologies and alternative electrolyte hurdles for project opportunity for a sustainable resea
Establishing a market for green and liquid global carbon green hydrogen production • To ensure widespread require highquality water Potential: materials, and improving developers but also foster a energy transition. The pivota
ammonia and methanol is a market, pricing the value of and electrolyser availability of Green M15 fuel, Building the to avoid damaging the system designs to optimize dynamic ecosystem conducive symbolizes
global issue. In India, carbon and embedded manufacturing. These there’s a need for investment electrolyte. performance and reduce to the rapid growth of India's National Green Hydrogen techn
forward-thinking standards by emissions in the production initiatives will catalyze in the necessary 2. Proton Exchange Policy costs. Green Hydrogen and Mission underscores India's also ec
the Bureau of Indian Standards, and usage of grey hydrogen industry growth. infrastructure for its Electrolyser Membrane (PEM) Ammonia sector. By commitment to cleaner and enviro
such as blending DME with becomes challenging. This is production, distribution, and Electrolyzers: PEM Imperatives • Renewable Energy energy. Looking ahead,
LPG and methanol with diesel, why, initially, green • The cost of renewable storage. electrolyzers use a solid Integration : There is a proactively collaborating and strategic initiatives fortif
are significant steps towards hydrogen seems more energy can be further Ecosystem for Green polymer electrolyte and for Sustainable growing interest in implementing these policy encompassing technology, golden ch
integrating green fuels. reduced through energy • Campaigns should be integrating electrolyzer levers, India can unlock the policy, and infrastructure are
expensive than grey surplus banking provisions, launched to educate the operate at higher immense potential of these sustainabi
hydrogen. especially for sectors public and other stakeholders efficiencies than AELs. They Growth systems directly with clean molecules and propel imperative. This isn't
NATIONAL GREEN • The cost of funding remains mandated to use green about the benefits of using Hydrogen and are capable of rapid renewable energy sources. itself towards a sustainable The roadmap involves visiona
HYDROGEN MISSON a persistent bottleneck, hydrogen. Green M15 fuel and address response to changes in This integration aims to future. seamless integration of greener an
electricity supply, making
create more efficient,
ENVISAGES TO MAKE presenting a considerable • The government should misconceptions. them well-suited for future for
INDIA THE GLOBAL challenge for project implement targeted By adopting these Green Ammonia integration with
developers, impacting the
HUB FOR optimization of capital incentives to boost the recommendations, India can intermittent renewable
PRODUCTION, USAGE expenditure and project export of green molecules. make significant strides towards energy sources like solar
AND EXPORT OF execution. It will help establish India as energy self-reliance, and wind power. This
a global leader in
feature is crucial for
GREEN HYDROGEN renewable energy. environmental sustainability, and maximizing the utilization
Suggestions • A mechanism should be economic growth. I ndia's ambitious National Electrolysers: the global push towards institutions involved in of renewable energy. to cost-competitive 2. Fostering Regulatory
Green Hydrogen Mission,
developed to facilitate Conclusion launched in 2023, has decarbonization and the advancing electrolyzer However, PEM renewable power through Certainty and Transparency:
technology.
increasing competitiveness of
strategic policy levers.
electrolyzers often involve
Challenges To address the challenges, we low-cost financing and positioned Green Hydrogen The Engine of renewable energy. higher costs, partly due to • Customs duty waivers: • Harmonized tax incentives:
provide benefits like
Establish a level playing field
suggest that the government
take several steps to provide a accelerated depreciation This is the time to take and Green Ammonia as Green Fuel Governments and industries Electrolyser the use of precious metals India's ambitious Green Ease import duties on across states by ensuring
Hydrogen and Green
worldwide are investing in
like platinum and iridium in
Despite government efforts much-needed boost to the for green hydrogen immediate action to overcome central figures in its Hydrogen technologies as part their construction. Ammonia aspirations critical equipment and uniform exemption from
decarbonization strategy.
to promote green hydrogen industry, such as: infrastructure investments. all the bottlenecks on the road These clean fuels, synthesized Production of their strategy to reduce Technologies technologies. cross-subsidy charges,
and its derivatives, the sector • The government should towards leading the global carbon emissions. This trend is 3. Solid Oxide necessitate strategic electricity duty, and
is still in its infancy, and • As in the initial days of expand the FAME India transition to sustainable energy. using abundant renewable Electrolyzers (SOEC): government interventions to • Input tax credit on GST: surcharges.
acknowledging and addressing renewable energy, the (Faster Adoption and With right policies in place and energy like solar and wind, ELECTROLYZERS fostering a dynamic and Electrolyzers, the cornerstone An emerging technology, catalyze investments and Reduce financial burden
the hurdles that impede our government mandated its Manufacturing of (Hybrid the development of a market for possess significant potential ARE THE competitive market of Green Hydrogen SOECs operate at much ensure long-term success. for project developers by • Comprehensive regulatory
full potential in this critical usage through Renewable &) Electric Vehicles in India) green methanol and ammonia, to transform India's energy environment, with numerous production, utilize electricity higher temperatures than This necessitates a offering input tax credit on framework: Implement clear,
sector is essential. Among the Purchase Obligation (RPO). Scheme to include green India can unlock the full landscape and drive the CORNERSTONE OF companies and research to split water into hydrogen AEL or PEM electrolyzers. multi-pronged approach Goods and Services Tax consistent, and adaptable
various challenges are - potential of green hydrogen and GREEN HYDROGEN and oxygen. The choice of This high-temperature focused on: (GST) associated with regulations and standards to
Similarly, we suggest that a methanol vehicles in it. It its derivatives. Moreover, it will nation towards a sustainable operation can lead to
• There isn’t much existing quota should be mandated will not only boost the provide a much-needed boost future. However, unlocking PRODUCTION electrolyzer technology is higher efficiencies, renewable energy attract investors and instil
demand and a developed for the use of green market but also provide for the production, distribution, this potential hinge on the critical and is influenced by especially when integrated 1. Building a Robust Financial equipment and confidence in the sector's
market ecosystem for hydrogen in sectors like support to the green and usage of green hydrogen and development of a robust factors such as efficiency, cost, with heat sources like Ecosystem: infrastructure. longterm viability.
green hydrogen and its fertilizers, chemicals, steel, hydrogen ecosystem in the its derivatives across sectors. electrolyzer ecosystem and a Electrolysers act as engine for scalability, and source of industrial waste heat or • Targeted financial 3. Accelerating Technology
derivatives like green and power generation. country. Such initiatives will not only help comprehensive understanding the generation of green fuels power. The three main types concentrated solar power. instruments: Deploy • Expanded SEZ/EoU norms: Adoption:
ammonia and methanol, not Creating demand through • There’s a need for funding India in achieving targeted of the prerequisites for for downstream technologies are: SOECs hold the potential mechanisms like green Integrate wind assets
only in India but also policy will spur sectoral and support for research climate goals but also position it that transform Green 1. Alkaline Electrolyzers for lower operational costs bonds, low-interest loans, within Special Economic • Strategic import duty
globally, compared to other growth and reduce the and development in the as a leader in the green energy establishing efficient Green Hydrogen into Green (AEL): These are the most and the ability to directly Zone (SEZ) and Export waivers: Minimize or
conventional fuels. production cost of green areas of green hydrogen revolution. Hydrogen and Ammonia Ammonia, synthetic fuels, and established technology, split steam rather than and dedicated grants to Oriented Unit (EoU) eliminate import duties on
hydrogen. production facilities. more. The Electrolyzer market used extensively in stimulate private frameworks to leverage
• Project developers face and methanol-based liquid water, enhancing investment and mitigate essential equipment and
difficulty in getting final • Leveraging its international technologies. It will further is rapidly evolving, driven by industrial applications. overall efficiency. However, initial capital demands. tax incentives and technologies to incentivize
offtake agreements signed. relations, the government help enhance efficiency and they currently face favorable regulatory deployment of advanced and
should expedite the signing reduce costs. Derek Michael Shah, Vice-chairman, CII Taskforce on Green Hydrogen and Senior Vice challenges in terms of • Cost-optimization environments.
• In the absence of advance President – Green Manufacturing & Integrated Development, Larsen & Toubro cost-effective solutions.
offtake contracts, lenders of bilateral agreements • The government should long-term durability and measures: Facilitate access
24 ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY 25
QUARTERLY JOURNAL OF ECONOMICS
QUARTERLY JOURNAL OF ECONOMICS
FEBRUARY 2024 FEBRUARY 2024