India's Green Hydrogen Initiatives Risk Increased Pollution Without Strict Carbon Accounting Rules

Everything now rests on the MNRE getting its carbon accounting system right so that green hydrogen produced in India doesn’t end up being a worse polluter than coal-generated hydrogen 

New Delhi: India is investing heavily in green hydrogen initiatives. So far, the government has earmarked over Rs 19,000 crores to make India “the global hub” of green hydrogen energy production, use and export. But if strict rules are not put in place, our green hydrogen initiatives could end up adding to the country’s carbon emissions and polluting the environment, as per a report published by Bengaluru-based think-tank Climate Risk Horizons on October 26. 

India’s green hydrogen push

Around 70% of India’s power needs currently are derived from coal, a polluting fossil fuel. India, like most of the world, is looking to increase its sources of renewable energy. One of them is green hydrogen.

Green hydrogen is hydrogen produced by splitting water into hydrogen and oxygen using renewable electricity (as opposed to grey hydrogen, which is generated using natural gas or coal or other polluting fossil fuels). 

The aim of the National Green Hydrogen Mission under the Ministry of New and Renewable Energy (MNRE) is to make India “the global hub” of production, use and export of green hydrogen and its derivatives.

On October 7, the MNRE released a research and development “roadmap” for the Green Hydrogen Mission, budgeted at Rs 400 crore for 2-3 years alone. As per the MNRE, the initial outlay for the mission will be Rs 19,744 crore. 

This includes an investment of Rs 17,490 crore for the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme which aims to incentivise green hydrogen production and electrolyser manufacturing (electrolysers are a critical part of producing hydrogen; the device helps split water into its hydrogen and oxygen components using a chemical process). 

An amount of Rs 1,466 crore is earmarked for pilot projects, Rs 400 crore for research and development, and Rs 388 crore “towards other Mission components”, per the ministry’s website. The Ministry also launched a national single window system for approvals under the mission. 

Word of caution

However, India’s green hydrogen push could end up increasing the country’s carbon emissions unless the right safeguards and proper carbon accounting systems are put in place, cautioned a report published by Bengaluru-based energy think-tank Climate Risk Horizons.

If electrolysers are run day and night (as there will be pressure to), they will operate even during times when no renewable energy is being generated. For instance, they will also run at night  when there is no solar power generation. If this electricity comes from India’s coal-powered grid then, it will only add to the country’s carbon emissions rather than decrease them, the report said. 

Green hydrogen produced this way, the report noted, would make it even more polluting than conventional grey hydrogen due to its embodied emissions (greenhouse gas emissions released during the production of a good).

This is because India is currently dependent on coal-generated power. and it is this that India and the world are trying to phase down to decrease emissions of carbon dioxide, a polluting greenhouse gas that contributes to global warming which, in turn, causes climate change.

There are also problems with MNRE’s definition of green hydrogen, per the report. The current definition “leaves a lot to interpretation”, such as raising questions whether it includes embodied emissions of the type of electricity being used to generate the green hydrogen. Per the report, the MNRE definition also includes the use of biomass, or organic matter from plants and waste, in producing green hydrogen. This, the report says, is “problematic both in terms of carbon emissions from the gasification process, and the source of the biomass itself”.

Need for a proper carbon accounting system

The MNRE is yet to finalise the accounting or certification methods for green hydrogen, per the report. Everything now rests on a proper accounting system – a poor system would subsidise the production of green hydrogen that is more carbon intensive than even conventional grey hydrogen, it said.

“Weak guidelines for green hydrogen will squander the promise and effectiveness of truly green hydrogen as a decarbonisation tool and will probably increase emissions, which is in direct conflict with the aims of the green hydrogen mission,” the report noted. “This could also jeopardise India’s clean hydrogen industry as a whole, as a polluting and contentious start to the sector would damage international credibility, reduce access to export markets and undermine public trust.”

“It’s essential that the MNRE gets this [accounting system/ methodology] right,” said Ashish Fernandes, CEO of Climate Risk Horizons, in a press release. “Green Hydrogen has massive potential to reduce carbon emissions from industrial sectors, but only if the accounting methods and safeguards are rigorous. This means it has to be powered 100% by new, additional renewable energy that is matched to consumption on an hourly basis. If the rules have loopholes, either by allowing RE [Renewable Energy] credits or matching consumption with RE generation on a monthly or annual basis, it will not deliver actual carbon reductions. This will undermine the green hydrogen market before it can even get started.”

There is also a risk that RE for green hydrogen “will crowd out needed investment in grid RE, with negative consequences in terms of meeting India’s climate commitments”, in a “constrained environment with high cost of capital”, per the report.

“India’s ambitious renewable energy target of 450 GW by 2030 already requires huge investment,” Fernandes said. “The green hydrogen mission will require an additional 125 GW of RE. The MNRE needs to guard against the risk that finance for RE projects that would otherwise decarbonise the electricity grid will instead be diverted to produce green hydrogen. This would delay India’s journey to net zero, undermine a nascent industry and deny states and electricity consumers the cost benefits that cheap renewable energy has to offer.”

Big corporations including the Adani Group, TATA, L&T, etc have unveiled plans to invest in the green hydrogen industry.