The India Hydrogen Alliance (IH2A) has proposed to the Government of India the implementation of hydrogen purchase obligations (HPOs) and demand-side support for refineries and ammonia plant. It has proposed 10% HPO for existing plants and 100% HPO for new plants by 2030, to achieve the National Green Hydrogen Mission (NGHM) target of 1.5 million tonnes (MT) of green hydrogen for domestic use by 2030.
IH2A said that HPOs are critical for meeting NGHM 2030 targets and protecting the public announced hydrogen-related investments in excess of $80 billion in India. According to IH2A, without HPOs and demand support, planned hydrogen plants and supply projects risk becoming stranded assets.
India’s installed electrolyser base is currently less than 40 MW producing 10,600 MTPA of green hydrogen, which accounts for less than1% of NGHM 2030 target of 1.5 MMT for domestic consumption.
IH2A has proposed HPOs to replace current grey hydrogen industrial offtake with green hydrogen, as feedstock in refinery and ammonia sectors, across 47 existing and proposed plants in India.
The IH2A proposed HPOs are divided into the following:
1.Aggregated industrial hydrogen offtake in 39 existing domestic projects, across 17 refineries and 22 ammonia plants, through a 10% HPO to meet 45% NGHM target by 2030 (672,000 MT).
2.Accelerated industrial hydrogen offtake in eight new build/expansion projects across five refinery and three fertilizers plants, through 100% HPOs to meet 55% NGHM target by 2030 (849,000 MT)
“Mandated HPOs can replicate the success of RPOs from the renewable energy sector,” said Amrit Singh Deo, IH2A Secretariat lead. “Refineries and fertilizers should have a common hydrogen use and demand roadmap to aggregate demand and procure green hydrogen volumes of at least 10% till 2030. Once HPOs are introduced, India can look at the Japan Contract-for-Difference (CfD) framework to part-fund the green hydrogen transition by refinery and ammonia sector by 2030, and reduce carbon emissions in these two hard-to-abate sectors.”
IH2A estimates that an additional budget allocation for a $2 billion CfD framework, for refineries and fertilizers, can support the transition of all existing refinery and fertilizer plants to 10% HPO offtake and all new plants to 100% HPO offtake by 2030.
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