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NEW DELHI: State-owned Indian Oil Corporation Ltd. (IOC) on Friday announced its plan to build the country’s first green hydrogen plant at its Mathura refinery.

This push for the new age emission free fuel comes at a time when India, the world’s third-largest oil importer, is recalibrating its energy sourcing playbook keeping its strategic and economic interests in mind. Green hydrogen can be a game changer for India, which imports 85% of its oil and 53% of gas demand.

India’s largest refiner with a 32% share of the domestic market also plans to add another 25 million tonnes (mt) to its current capacity of 80.2 mt. India is a key refining hub in Asia, with an installed capacity of over 249.36 million tonnes per annum (mtpa). It has 23 refineries and plans to grow its refining capacity to 400 mtpa by 2025.

“Petroleum refining and marketing with much higher petrochemicals integration will continue to be IndianOil's key focus area. We are going to add 25 million tonnes of refining capacity by the year 2023-24," IOC chairman Shrikant Madhav Vaidya said in a statement.

Going ahead, the country’s largest fuel retailer plans to use green hydrogen to replace “carbon-emitting fuels used in the refinery to process crude oil into value-added products such as petrol and diesel," and use electricity generated from clean energy sources for the same.

“While IndianOil has been working on various hydrogen production pathways, the current project at Mathura Refinery will be pioneering the introduction of green hydrogen in the Indian oil & gas sector," the IOC statement said.

This comes in the backdrop of India considering a proposal to make it mandatory for fertilizer plants and oil refineries to purchase green hydrogen as part of plans to cut the nation’s dependence on fossil fuels.

As reported by Mint, a draft note prepared for the Union cabinet said fertilizer plants and oil refineries would have to use green hydrogen to meet 0.15% of their total hydrogen requirements starting 2023-24 and ramp it up to a tenth of their total requirements within six years.

“IndianOil has a wind power project in Rajasthan. We intend to wheel that power to our Mathura refinery to produce absolutely green hydrogen through electrolysis,"Vaidya said in the statement.

There is a growing traction for India’s push for green hydrogen gas, that is produced by splitting water into hydrogen and oxygen using an electrolyzer, that may be powered by electricity generated from clean energy sources such as wind and solar. A case in point being Reliance Industries Ltd that has announced plans to build an electrolyzer giga factory and a fuel cell giga factory.

While hydrogen produced from natural gas is referred to as ‘grey’ hydrogen, the emission-free fuel produced from coal or petroleum coke is ‘brown’ hydrogen. Hydrogen produced from carbon capture and storage is known as ‘blue’ hydrogen, while the one from biomass and plastics is known as ‘white’ hydrogen.

“Mathura has been selected because of its proximity to TTZ (Taj Trapezium Zone). As we see it, the Green hydrogen will replace carbon-emitting fuels used in the refinery to process crude oil into value-added products such as petrol and diesel. Moreover, we have got several expansion plans down the line which are already approved. We will not have a captive power plant and will utilise power from the grid, preferably green power. This will help decarbonise some part of the manufacturing," Vaidya added.

Around 3.6 mt of India’s annual hydrogen consumption of 6.7 mt is utilised in petroleum refining and the rest in fertilizer production.

“IndianOil has drawn a strategic growth path to focus on its core refining and fuel marketing businesses while making bigger inroads into petrochemicals, hydrogen, and electric mobility over the next ten years," Vaidya said in the statement.

The government plans to implement the Green Hydrogen Consumption Obligation (GHCO) in fertilizer production and petroleum refining, similar to what was done with renewable purchase obligations. India’s total hydrogen demand is expected to touch 11.7 million tonnes (mt) by 2029-30 from the current 6.7 mt.

This comes in the backdrop of India working to leverage its compressed natural gas (CNG) pipeline grid and infrastructure to reduce the transportation cost for hydrogen. Also, there are plans to run buses across cities fuelled by hydrogen blended with CNG. A step has already been taken in that direction with the country’s largest fuel retailer converting 50 CNG buses to run on this blended fuel.

“Also, with the support of the MoPNG, IndianOil is in the process of setting up 1 tonne per day capacity pilot plants based on four innovative hydrogen production technologies, and we would also be operating 15 fuel cell buses in the Delhi NCR region along with Tata Motors," Vaidya said.

India’s green hydrogen push is expected to result in natural gas saving of 3.6 mt and carbon dioxide reduction of 10 mt by 2029-30.

“We also intend to seed Hydrogen Mobility by commoditising the surplus quantities of hydrogen available at the Gujarat refinery with a hydrogen dispensing facility for Fuel Cell Electric Vehicles. Initially, this facility will be refuelling 25 buses per day with a ramp-up capability to refuel 75 fuel cell buses per day," Vaidya said.

“Forecasts by various agencies sees Indian fuel demand climbing to 400-450 million tonnes by 2040 as against 250 million tonnes now. This demand surge offers enough legroom for all forms of energy to co-exist," he added.

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