How a new method to produce green hydrogen could help Indian industry

Green hydrogen, made using renewable energy, has the potential to decarbonise major greenhouse gas emitting sectors, such as steel.

A novel, green method of producing hydrogen could reduce global warming-causing greenhouse gas emissions and help countries achieve their climate goals.

'Green' hydrogen is produced by using renewable energy to split water into hydrogen and oxygen. In contrast, the conventional process of making hydrogen uses fossil fuels.

Hydrogen is a key input in fertilizers and refineries, so green hydrogen would help these industries cut aggregate emissions. It could also be used in steel manufacturing to reduce emissions by replacing the use of coal as the energy source and as a reducing agent.

"Till now, we have been focusing on renewable energy sources for clean electricity, but for industries and the transportation sector to transition to net zero emissions, we need clean fuel; green hydrogen can play a critical role in this," Amit Kumar, a former senior director of social transformation at The Energy and Resources Institute (TERI), told IndiaSpend.

As extreme weather events around the world drive home the urgency of climate action, countries are striving to cut emissions -- many have already announced 'net zero' targets -- to limit global warming to 1.5-2 degrees Celsius (°C). Green hydrogen is being seen as a key component of a worldwide, economy-wide and system-wide shift to a lower carbon footprint for humankind.

In India, the central government and several states are launching programmes to support the production and use of green hydrogen. In September 2021, Kerala initiated talks with energy companies to make green hydrogen from a solar power facility at Cochin Airport. In August, the prime minister announced the National Hydrogen Mission to support India's energy transition goals. Our explainer tells you what green hydrogen is and why it is important for India.

The different kinds of hydrogen

India's demand for grey hydrogen--produced using fossil fuels--was around six million tonnes in 2020, according to a report by TERI.

"Hydrogen is basically a colourless gas; the colours--green, blue, turquoise and grey--indicate how it is produced," said Ashish Guhan Bhaskar, an energy engineer affiliated with the Council on Energy, Environment and Water (CEEW), "Green hydrogen is the only clean type that uses renewable energy."

By 2050, India will see a five-fold growth in grey hydrogen demand, the TERI report predicts. But only by 2030 will green hydrogen become cost-competitive with hydrogen from fossil fuels, when its cost is likely to fall by more than 50%, which is below $2 (Rs 147/kg). Its current cost is between $3/kg (Rs 221/kg) and $10/kg (Rs 737/kg).

Sectors where green hydrogen can be used

Green hydrogen can help decarbonise sectors such as shipping and transportation, where it can be used as a fuel, as well as in manufacturing industries such as steel and chemicals, where it can constitute an important raw material as well as a fuel. It could replace fossil fuels in power generation and be used to store renewable energy. Further, green hydrogen could be used in gas turbines, along with ammonia, to manage fluctuations in the demand and supply of power.

Take the example of steel and iron, among the world's most polluting sectors that account for 7% of global greenhouse gas emissions. Steel--used in everything from bridges to cars--is projected to contribute 35% of India's carbon dioxide emissions from fossil fuel combustion and industry by 2050, as per a TERI report.

Hydrogen has two uses in steel production -- as a reducing agent, and as a fuel. Radical changes are needed in iron and steel production technology to make the process sustainable and carbon neutral, the International Energy Agency said in a 2020 report. Green hydrogen could be one such breakthrough.

Countries around the world, including Australia and members of the European Union, are experimenting with green hydrogen-based steel. Some of the world's biggest steelmakers, including ArcelorMittal and Thyssenkrupp, are at various stages of transitioning to green steel made using green hydrogen. Tata Steel had piloted green steel in Europe in 2020, but is still reportedly looking for ways to commercially scale the plant.

Green hydrogen-based steel would help India avoid carbon border taxes. It is the world's second largest steel producer, having exported 10.15 million tonnes in 2020-21. "Countries, especially in the European Union, are starting to tax carbon footprint, so our steel industry is going to take a hit if it doesn't plan decarbonisation," Hemant Mallya, senior programme lead at the Council on Energy, Environment and Water, a New Delhi-based think-tank, told IndiaSpend.

Steel makers would need new equipment as the "majority of existing steel is produced using a blast furnace--a giant cylinder where you dump your coal, iron ore and other aggregates", said Mallya. "For green hydrogen-based steel, you need a shaft furnace which is a different technology,"

Challenges

The main challenge in transitioning to green hydrogen is to make it economically competitive and commercially viable. Steel made using green hydrogen costs 50-127% higher than steel made using conventional coal, a report by CEEW estimated in 2021.

"India needs to put some sort of regulatory mechanism or incentives in place to make the shift towards green hydrogen and green steel," said Kumar of TERI. But so far, the government is yet to release the policy framework for the rollout of green hydrogen.

The deployment of green hydrogen is still in the pilot stage and though many countries, including India, have announced national hydrogen programmes, they have not yet planned how it will be commercialised at a large scale, according to a September 2021 CEEW report. The report proposes a multi-country alliance to financially and technologically support and develop green hydrogen technologies. Companies and the government should proactively collaborate to transition to green steel, suggested a 2021 TERI report. In India, companies, including Reliance Industries and JSW Steel, along with experts from think tanks, have formed a coalition, called the India Hydrogen Alliance, to plan India's green hydrogen roadmap.

India also needs more research on how to put green hydrogen to use in green steel. Currently, the focus is only on deployment of green steel and not on research to find innovative ways to use green hydrogen, Kumar said, suggesting that India use its recent US-India Climate and Energy Agenda 2030 Partnership to push for collaboration on such research.

Further, India should transition to green steel gradually, by blending green hydrogen with grey hydrogen to begin with, a recent CEEW report suggested. "An overnight transition to fossil-free steelmaking will be highly expensive,'' said Mallya. In 2030, the lowest cost of producing green steel would still be 22% higher than coal-based steel, the CEEW report said.