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NEW DELHI : Indian Oil Corp. Ltd, Larsen and Toubro and ReNew Power have agreed to form a joint venture company to develop green hydrogen projects across the country and capitalize on the government’s ambitious plans for this sector.

The three companies signed a binding term sheet on Monday to set up the alliance that will combine L&T’s credentials in designing, executing, and delivering engineering, procurement and construction projects, Indian Oil’s established expertise in petroleum refining with its presence across the energy spectrum, and the expertise of ReNew in offering and developing utility-scale renewable energy solutions.

Sumant Sinha, chairman and managing director of ReNew Power, said in an interview that the three partners would hold equal stakes in the new company.

“We all bring in very complementary skill sets into this joint venture. We believe that it will become the most competitive and the most well-qualified company to deliver green hydrogen solutions for all future requirements in India," Sinha said.

Noting the government’s target of producing 5 million tonnes of green hydrogen per year by 2030, he said the new company is expected to come up with a couple of projects in the next 12-18 months and produce green hydrogen within 18-24 months.

S.N. Subrahmanyan, chief executive officer and managing director, L&T, said, “The IndianOil-L&T-ReNew JV will focus on developing green hydrogen projects in a time-bound manner to supply Green Hydrogen at an industrial scale.“

Further, Indian Oil and L&T have signed another binding term sheet to form a joint venture to manufacture and sell electrolyzers used to produce green hydrogen.

“Both these joint ventures aim to enable the nation’s ‘Aatmanirbhar Bharat’ mission to rapidly build, expand and bring in economies of scale to make green hydrogen a cost-effective energy carrier and a chemical feedstock for many sectors," Subrahmanyan said.

Shrikant Madhav Vaidya, chairman of Indian Oil, said the JV would initially focus on green hydrogen projects at IOC’s Mathura and Panipat refineries.

“Alongside, other green hydrogen projects in India will also be evaluated. While the usage of hydrogen in the mobility sector will take its due time, the refineries will be the pivot around which India’s green hydrogen revolution will materialize substantially," he said.

Details such as investments are still to be finalized. The planned JVs aim to enable India’s transition from a grey hydrogen economy to a greener economy that increasingly manufactures hydrogen via electrolysis powered by renewable energy.

Hydrogen is mainly used in the refining, steel and fertilizer sectors, which will be the initial focus of the new alliance. India’s refining sector consumes about 2 million metric tonnes of grey hydrogen every year, with Indian Oil owning one of the largest shares of its refining output.

The government in February notified the Green Hydrogen policy to boost the production of green hydrogen and green ammonia and turn India into a global hub.

With a major policy focus on hydrogen and the government’s target of achieving carbon neutrality by 2070, Mukesh Ambani-led Reliance Industries and Gautam Adani’s Adani Group have already announced plans to produce green hydrogen.

subhash.narayan@livemint.com

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