WBCSD and ERM host low-carbon hydrogen session at India’s largest renewable energy expo

On 6 August 2021, WBCSD and ERM co-hosted a session, Can low-carbon hydrogen power Indian businesses? Preliminary hurdles and way forward, at India’s largest renewable energy exposition, REI e-Expo, which was held virtually

The aim of the session was to increase business awareness about existing market opportunities and kick off a discussion on market and policy support required to spur growth in the low-carbon hydrogen market in India.

With more than 100 GW of renewable energy installations in India, the country can produce low-carbon hydrogen at an economically competitive cost and has a huge potential to export the fuel to nations with limited access to renewable energy generation sources. In terms of consumption, low-carbon hydrogen is now seen as a key fuel to replace coal in various industrial processes with dual benefits—reducing import bills of fossil fuels and supporting corporate ambition to reduce emissions from their operations.

Panel discussants for the session included low-carbon hydrogen and energy experts from Acme Cleantech, Asian Development Bank, ERM, JSW Steel and TERI. The expert panel provided a 360° perspective of the market including insights on demand, supply, finance, technology and policy aspects. Many leading companies with existing use cases in refineries and fertilizer manufacturing  as well as new use cases in steel manufacturing are making ambitious plans to use hydrogen fuel. However, most businesses expect green hydrogen to make commercial sense for wide use by late 2020s only. Policy support and well coordinated efforts of multiple stakeholders are critical to ensure green hydrogen becomes cost competitive sooner. The Government of India is already planning to put in place green hydrogen purchase obligations to kick start demand.

India has also proposed the creation of a National Hydrogen Mission, the details of which are still awaited. Clear recommendations for elements to be included in the National Hydrogen Mission as well as general policy suggestions emerged during the discussion. These are:  

• Support for putting in place demonstration projects in industries to provide an appropriate demand signal
• Increased research on the storage of hydrogen including exploring underground and tank storage
• Create geographic demand clusters to minimize the cost of infrastructure required to produce and transport low-carbon hydrogen
• Promote large scale domestic manufacturing of electrolyzers through a production linked incentive scheme
• Enable carbon pricing and an emissions trading market to make use of hydrogen commercially more attractive

Development financial institutions and multilateral organizations will be more comfortable providing funding for projects through mechanisms like viability gap funding, once technology use has been well demonstrated. A global fund could also be set up under UNFCCC or the COP framework to scale up production and use of hydrogen, for channeling through various multilateral financial institutions to governments for the promotion of hydrogen use in their respective economies.

WBCSD believes that low-carbon hydrogen will play a critical role in bringing hard-to-abate sectors to the forefront in the race against climate change, and has worked with leading businesses globally to define low-carbon hydrogen based on its carbon intensity. We invite companies to make demand, supply or supporting side pledges to send a market signal, and increase confidence in the growth of the low carbon hydrogen economy.

For more information with regards to pledges, please contact Caroline Amblard, amblard@wbcsd.org.