Carbon intensive “green” hydrogen can damage India’s international credibility, reduce the industry’s access to export markets and undermine public trust in the energy transition
In the absence of the right safeguards and carbon accounting, India’s green hydrogen mission could end up boosting carbon emissions, warned a new report by Climate Risk Horizons, a think-tank. India’s green hydrogen mission is gaining momentum with the government recently unveiling a ₹400 Cr R&D Roadmap.
India has a 2030 production target of 5 million metric tonnes (MMT) of green hydrogen per annum. The study suggested that the embodied carbon emissions from “green” hydrogen that is generated from grid-powered electrolysis could be much higher than the emissions from traditional “grey” hydrogen produced from fossil fuels.
Feared pitfalls
The study cautioned that so-called green hydrogen produced without stringent energy accounting standards would not be climate friendly and could, in fact, be many times worse than traditional grey hydrogen produced from fossil fuels. The 2030 target of 5 MMT of green hydrogen would require about 250 TWh of electricity, which is approximately 13% of India’s current electricity generation. If even some of this electricity comes from India’s coal-powered grid, it will drive significant additional emissions into the atmosphere. 70% of India’s electricity generation is coal-based.
The Ministry of New and Renewable Energy (MNRE) recently notified emission thresholds for green hydrogen production, but the accounting and certification methods are yet to be finalised. The integrity of this methodology would be crucial to ensure that green hydrogen does not embody emissions from fossil fuel powered electricity.
“It’s essential that the MNRE gets this right. 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 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”, said Ashish Fernandes, CEO, Climate Risk Horizons.
Apart from climate pollution risks, the report also highlighted how carbon intensive “green” hydrogen can damage India’s international credibility, reduce the industry’s access to export markets and undermine public trust in the energy transition.
Potential solutions
To avoid these pitfalls, the think-tank recommended that the carbon accounting methodology must, among other things, include Scope 2 emissions, to ensure that the emissions of the electricity used in the green hydrogen manufacturing process are accounted for.
Existing research from the United States, which is also formulating its green hydrogen standards, shows that the electricity requirement for electrolysers must be matched with dedicated clean energy supply on an hourly basis, instead of a monthly or annual basis, to deliver actual carbon reductions.
The clean energy built for hydrogen electrolysis must also be additional, so as to avoid cannibalising existing renewable energy supplies or the planned RE capacity meant to decarbonise the electricity grid.
Lastly, the report added, the RE facility and the green hydrogen facility should be connected on the same grid to ensure that the electrolyser’s demand is met through clean energy rather than coal.
“India’s ambitious renewable energy target of 450 GW by 2030 already requires huge investment. 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”, said Fernandes.
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