Govt mulling 10% Green Hydrogen purchase obligation for refineries, fertiliser plants: RK Singh

• The government is considering a production-linked incentive (PLI) scheme and viability gap funding for use of Green Hydrogen by heavy vehicles to promote the fuel
• Green Hydrogen purchase obligations for refineries and fertiliser plants are proposed to start with 10 percent, which will be increased to 20-25 percent

New Delhi: Minister for Power and New and Renewable Energy RK Singh said on Wednesday that a proposal for setting targets for Green Hydrogen purchase obligation to be fulfilled by refineries and fertiliser plants has been sent to the Cabinet for approval. Delivering the keynote address at CEEW's virtual event, 'A Multilateral Approach to Building a Global Hydrogen Economy,' the minister said that the government is considering a production-linked incentive (PLI) scheme and viability gap funding for use of Green Hydrogen by heavy vehicles to promote the fuel.

"We have drawn up a Cabinet note (proposal) and sent it to the Cabinet for placing mandates for use of green hydrogen…. Those mandates' total requirement (is) of up to 8.8 GW of electrolyser capacity," Singh said.

Green Hydrogen purchase obligation

Singh said that the Centre is mulling Green Hydrogen purchase obligations for refineries and fertiliser plants, starting with 10 percent which will be increased to 20-25 percent. "With time, by adding more and more volume, the price will reduce and the mandate will no longer be required," the minister added. Singh said India is the world leader in energy transition and intends to continue leading the path.

Speaking about the government's plans for promoting use of Green Hydrogen for long-haul vehicles, Singh said, "We are also proposing to come up with viability gap funding (VGF) for green hydrogen in heavy mobility and are also eyeing other sectors such as steel (for hydrogen purchase obligation)."

Green Hydrogen PLI scheme

"We would like to come out with a PLI for setting up electrolyser capacity. The electrolyser capacity which we need is in the region of 15 GW. We can start with 10 GW. Without that (scale or volume) we are not going anywhere because available electrolyser capacity in the world is very limited," said Singh. Electrolysers are used to split water into Hydrogen and Oxygen using electricity and the Hydrogen produced from the process is considered green because of the use of renewable energy.

The minister said that with economies of scale, the price of Hydrogen will come down. "When we started solar, it was too expensive. But we believed that by adding volumes, the prices would come down. Similarly, we are starting off with (large) scale for hydrogen," said Singh.

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