Industry
Setting green hydrogen standards is a great first step, but challenges remain
Summary
- India must tread carefully to avoid making the emerging industry non-competitive due to overly strict definitions, all while ensuring that its certification protocols gain global acceptance
In a strategic move to position itself as a leader in the global quest for clean energy, India has taken two significant steps. The first is the establishment of a robust national standard for green hydrogen, marking the country's blueprint for achieving its National Hydrogen Mission, which aims to produce 5 million tonnes of green hydrogen annually by 2030, fueled by 125 GW of renewable energy. The second is its diplomatic finesse in balancing the interests of fossil fuel producers and consumers in the Delhi Declaration, unveiled at the conclusion of its G20 presidency. The declaration secured a consensus commitment to triple global renewable capacity by 2030 and fostered "similar ambition with respect to other zero and low-emission technologies."
By defining the emission standards for green hydrogen, India has created the base for achieving the National Hydrogen Mission's ambitious target of a production capacity of 5 million tonne of green hydrogen per year by 2030, along with 125 GW of renewable energy to power this manufacture.
This aligns squarely with India’s aspirations to become a pivotal hub in the green hydrogen ecosystem, making it one of the few nations to set a concrete benchmark in this emerging sector.
While China was the first country to formalize standards for green hydrogen, India has upped the ante with more stringent guidelines.
According to a notification from India's Ministry of New and Renewable Energy, green hydrogen is defined as "hydrogen produced using renewable energy, including but not limited to, production through electrolysis or conversion of biomass." The definition also incorporates renewable energy that has been stored or banked with the grid in accordance with applicable regulations.
India's strict criteria stipulate that non-biogenic greenhouse gas emissions during the production of green hydrogen should not exceed an average of 2kg of carbon dioxide equivalent per kilogram of hydrogen over a 12-month period. This applies to various stages in the process, from water treatment and electrolysis to gas purification and compression for hydrogen produced through both electrolysis and biomass conversion.
This differs from proposed guidelines in the U. and the European Union, which aim to consider "lifecycle" emissions. Such an approach would encompass greenhouse gas emissions throughout the entire lifecycle of the fuel, including upstream emissions, electricity from the grid, processing, and transportation to the end-consumer.
While the US standards match India’s, for tax incentives under the Inflation Reduction Act of 2022, “qualified clean hydrogen," refers to hydrogen with lifecycle greenhouse gas emissions rate no higher than 4 kilograms of carbon dioxide-equivalent emitted at the production site per kilogram of hydrogen, while the EU standards translate to 3.38 kg of CO2e per kg of hydrogen. In the UK, the standard is pegged at 2.4 kg CO2e per kg of hydrogen.
Globally, the bid is to impose even more stringent emission norms. According to the Green Hydrogen Organisation (GH2), a Switzerland-based non-profit evangelising green hydrogen, the goal is to define green hydrogen as “hydrogen produced through the electrolysis of water with 100% or near 100% renewable energy with close to zero greenhouse gas emissions (<=1 kg CO2e per kg H2 taken as an average over a 12-month period)."
This wide variance in definitions and standards presents the first challenge to India’s ambitions of becoming a global green hydrogen hub and a major exporter of the fuel of tomorrow. Green hydrogen is a resource where no country at the moment has either clear technological or resource dominance. As the race to net zero gets to the business end, requiring large scale de-carbonisation of “hard to abate" sectors like cement, steel, large scale and long distance logistics, etc., the market dynamics for green hydrogen are set to change dramatically. It is here that non-tariff barriers like standards and certifications come into play.
At the moment, India has tasked the Bureau of Energy Efficiency as the the Nodal Authority for accreditation of agencies for the monitoring, verification and certification for Green Hydrogen production projects. the nodal authority for accreditation of agencies for the monitoring, verification and certification for green hydrogen production projects. While BEE has been good at coming up with standards, it has largely failed as a monitoring and implementation agency. It will have to develop the necessary skills, expertise and infrastructure to ensure that the specified standards are acceptable globally.
The rigorous green hydrogen standards set by India hold implications for end-user industries, notably high-emission sectors like steel. Should these industries fail to source green hydrogen that meets global certifications, they risk facing export barriers in the future. While the clarity of these new standards may attract investment in India's nascent green hydrogen sector, there is a balancing act at play. India must tread carefully to avoid making the emerging industry non-competitive due to overly strict definitions, all while ensuring that its certification protocols gain global acceptance.
This has implications for user industries too, particularly high emission sectors like steel. If they are unable to source globally certifiable green hydrogen, they may face barriers in export markets going forward. Clearly, while defining the standards provides clarity for investors betting on green hydrogen, India must ensure that it does not render this yet to be created industry non-competitive by way of too strict definitions, while ensuring global acceptance of its certification protocols.
