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NEW DELHI : In what may further help burnish India’s green energy credentials, the government may extend the production linked incentive (PLI) scheme for manufacturing electrolyzers, which are used for producing green hydrogen.

Green hydrogen gas is produced by splitting water into hydrogen and oxygen using an electrolyzer, which may be powered by electricity generated from renewable energy sources such as wind and solar. The biggest impediment for a push towards green hydrogen is the cost of electrolyzer, with its present prices being over $800 per kilowatt.

“You do not need a PLI scheme for green hydrogen but for manufacturing of electrolyzers as we go along," said Niti Aayog chief executive officer Amitabh Kant at "Mint India Investment Summit" on Wednesday.

A drop in electrolyzer prices is expected to make green hydrogen competitive vis-а-vis fossil fuels by 2030.

“India has this opportunity to be a global champion in green hydrogen. If we are able to do this, we can export green hydrogen to Japan, to Korea and Australia. That also gives us the opportunity to manufacture electrolyzers. That is a $20 billion global market. If you have to push for electrolyzers, you will have to push for production linked incentives," Kant added.

PLI schemes, originally announced last year, seek to create global manufacturing champions in India by removing sectoral disabilities and creating economies of scale to develop complete component ecosystems in India. Prime Minister Narendra Modi in February invited global firms to take advantage of the Rs1.97 trillion PLI schemes for 13 sectors and expand their manufacturing in India.

“My belief is that the world is going to pay a premium for green products. This is going to happen in next three to four years. You will see huge thrust which is being given to net zero emission by the US and China. What is going to happen as a consequence of this is that it will be accelerating the decarbonization of the world. That gives you the huge opportunity," Kant said.

This comes against the backdrop of the proposed National Hydrogen Energy Mission, which may mandate fertilizer, steel and petrochemicals industries to shift to green hydrogen. The proposal is expected to be taken up by the Union cabinet for approval shortly.

“Why green hydrogen is important for India is that we have been able to crack solar at Rs1.99 a unit. That is the cheapest solar power in the world. You need renewable energy to crack water and turn it into hydrogen. If you are able to do that in India in size and scale, that would require some kind of mandating across refineries and fertilizer factories," Kant said and added, “Therefore if you are able to decarbonize some of these sectors such as refining, steel, fertilizer, you open up a massive opportunity."

In November, Prime Minister Narendra Modi announced plans to launch a National Hydrogen Energy Mission, buttressing the country’s green energy credentials with the carbon emission-free next-generation fuel. India plans to build hydrogen plants that will run on electricity produced by green energy sources and help reduce dependence on fossil fuels. These plants will provide grid-scale storage solutions and provide feedstock for ammonia production.

In response to a direct question about whether electrolyzers be the next addition to the 13 sectors covered under PLI, Kant said, “Hopefully as we go across, because the green hydrogen mission is being put in place. It was announced in the budget. Work is going on for that. As soon as the green hydrogen mission is done, we should work towards this."

India is also working to leverage its compressed natural gas (CNG) pipeline grid and infrastructure to reduce the transportation cost for the new age emission free fuel. Also, plans are afoot to run buses across major Indian cities fueled by hydrogen blended with CNG. Given that hydrogen can be used for both fuel cell and internal combustion engines, it is also being leveraged for mobility applications.

“We in the past always used to get into sunset areas of industry. And it is very difficult to get into and penetrate global markets in sunset areas of industry. It is very important that India gets into sunrise areas of industries and penetrates and gets in with very advanced technology," Kant said.

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.

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