With sustainability and climate change becoming key topic of discussion on the global forum, green hydrogen has gained traction among policy-makers for planning the country's development via carbon neutral pathway. Hydrogen is widely used in industries such as refineries, fertilisers and transportation. At present, India's hydrogen consumption is estimated at about 6 million metric tonne per annum (MMTPA) - with about 3 MMTPA being used in oil refineries (for desulfurisation of fuels), 2.5 MMTPA in production of ammonia (for urea & other fertilisers), and remaining quality consumed by steel & chemical industries.

At present, India's 3 MMTPA of hydrogen is consumed by refineries having total refining capacity of 250 MMTPA. With refinery volumes expected to increase by 56 MMTPA by calendar year (CY) 2028, hydrogen requirement would reach about 4.5 MMTPA in the refineries, as companies look for ways to further remove sulfur from the fuel in line with the government's mission to reduce pollution.

The green alternative
Presently, hydrogen is derived from natural gas using an energy-intensive process that emits carbon dioxide as by-products. This is referred to as "gray hydrogen". Companies have developed ways to capture carbon dioxide (produced as by-product) during production, so that it is kept out of the atmosphere. Hydrogen produced by this method is called "blue hydrogen".

Green hydrogen (i.e. hydrogen produced by the electrolysis of water, using renewable electricity) is slowly emerging as an alternative to reduce emissions. "Green hydrogen is a process of generating hydrogen through the process of electrolysis using electrolysers run using renewable energy, where water is broken down to separate hydrogen," explains Reginaldo D'Souza, CEO, The Anup Engineering Ltd.

According to a recent report of Emkay Global Financial Services, the production of green hydrogen could reach to 5 MMTPA (including exports) by CY2030 in India from the present zero capacity. Green hydrogen is expected to make a significant contribution to India's clean energy transition because it is a zero emission source of energy.

"The global energy landscape is undergoing a remarkable transformation towards sustainable alternatives, with green hydrogen at the forefront. Green hydrogen, generated from renewable sources, offers versatile applications in transportation and industry, providing a viable path to reduce carbon emissions in challenging sectors. The momentum behind hydrogen is strong globally. Nine countries (including India) – which cover around 30 per cent of global energy sector emissions today have released their national hydrogen strategies. Of hydrogen projects announced globally, 80 per cent are green H2 projects followed by blue. The projects in Western Europe contribute 50 per cent, followed by Asia (20 per cent) and the US (14 per cent)," observes Hussain Shariyarr, SVP & Business Head, Godrej Process Equipment (a part of Godrej & Boyce), which manufactures the entire range of custom-built critical process equipment for global end-users in industries like oil & gas, refineries, petrochemicals, chemicals, fertilisers, power, etc.

To incentivise the commercial production of green hydrogen and make India a net exporter of the fuel, the Union Government of India, in January 2023, launched the National Green Hydrogen Mission (NGHM) with an outlay of Rs 19,744 crore from FY 2023-24 to FY 2029-30. The NGHM aims to achieve a green hydrogen production capacity of at least 5 MMT per year, generate investments of over Rs 8 lakh crore. "The Indian government is actively pursuing the development of infrastructure to enable ease of living and economic growth. On the hand, the industry aims to achieve net-zero emissions, driven by effective policies. I am optimistic about the green hydrogen industry in India due to its potential for cost reduction through low-cost renewable energy sources and government initiatives," says AK Tyagi, CMD, Nuberg Engineering Ltd (Nuberg EPC).

The grey area of green hydrogen
The green hydrogen market in India is expected to reach $ 10 billion by 2030 and $ 35 billion by 2040. Government-owned refiners have started to implement their green hydrogen initiatives and plan to add 0.43 MMTPA of green hydrogen volumes by CY2030. As per the Emkay report, moving to green hydrogen from gray could cost India's refining sector $ 3 per barrel on gross margin. Hence, the adoption of green hydrogen by refineries, which is expected to start from FY26 onwards, will be cautious with a mix of gray and green initially.

Besides cost, there other hurdles - like space availability in refineries, challenges related to setting up of renewable energy & electrolyser capacities, etc - in adoption of green hydrogen.

Experts believe, as green hydrogen cost drops to gray levels, which is anticipated to happen by CY2030, adoption will increase significantly. To hit green hydrogen production of 3 MMTPA, India will have to set up 36 GW of electrolyser capacity and 75 GW of effective RE capacity. "Considering the commissioning period for solar, wind farms, and electrolyzers, achieving the CY30 goals remains within reach," states the Emkay report, the predictions of which favour alkaline electrolysers (though other technologies could also secure a larger market share if unit economics improve).

The $ 45 billion equipment market opportunity
The burgeoning green hydrogen market presents big business potential to process equipment makers as well. India Hydrogen Alliance (IH2A) estimates the addressable market for Indian-manufactured hydrogen equipment to be worth $ 45-50 billion by 2030. This market assessment includes all hydrogen production plant equipment, including electrolyser and balance-of-plant (BoP) equipment that can be deployed in India and exported from India, building India as a supply chain hub for future green hydrogen projects. BoP equipment compresses products like compressors, storage tanks, transformers, rectifiers, liquefaction units, air separation units, dispensing units, power systems, sensors and instrumentation, and pipeline/evacuation infrastructure.

Source: India Hydrogen Alliance

While 34 per cent of the hydrogen equipment market will comprise of electrolyser stacks, BoP equipment and specialist engineering services will account for 62 per cent and 4 per cent, respectively. IH2A projects the domestic hydrogen production plant equipment market at $ 9 billion by 2030 with an estimated 135 domestic plants being set up by 2030 of 6.8 GW per annual electrolyser capacity, producing and delivering at least 1 MMT green hydrogen to domestic offtake for industrial use - refinery and steel (in compressed gaseous form), fertiliser feedstock (as green ammonia) and heavy-duty transport (as liquid hydrogen).

IH2A believed there is a $ 34 billion export potential for Indian made electrolysers and balance of plant equipment, with these equipment finding their ways into an estimated 540 green hydrogen projects across Asia Pacific (APAC), Middle East (ME) and Africa regions. According to Amrit Singh Deo, Senior Managing Director, FTI Consulting, and IH2A Secretariat lead, “Hydrogen equipment represents a significant export opportunity for India. The export market for BoP equipment is larger than the market for electrolyser stacks, and India should focus on being the preferred equipment supplier to all key hydrogen projects in the region over the next decade. This is an opportunity for government, industry and investors to work together and turn India’s competitive advantage on industrial manufacturing and engineering talent to its advantage.”

The projected $ 50 billion market indicates that there is a potential to create 15-20 green hydrogen equipment manufacturing companies (public as well as private sector) in India, with estimated revenues of $ 2 billion each.

Scaling up capabilities
The government’s aim to turn India into an export center for hydrogen generation has gained momentum as a result of the National Green Hydrogen Mission. "The investment commitment will concentrate on the growth of indigenous electrolyser manufacturers and the development of green hydrogen. The government of India has initiated several measures to promote domestic manufacturing of electrolysers and reduce their costs. There has already been an increasing trend in terms of the development of indigenous electrolyser manufacturers and technology tie-ups and partnerships are being announced by various companies," says Hussain Shariyarr.

He added, "Godrej Process Equipment has long been a pioneer in the field of high-end, critical static equipment for the process industry. We have supplied equipment globally for blue hydrogen projects and executed orders for green and blue hydrogen. It is essential to recognise the role of Indian companies in bringing about a global shift towards renewable energy adoption in the heavy engineering industry. We aim to leverage our capabilities and expertise to support the green hydrogen revolution by supplying critical equipment for transmission, storage, and conversion. Furthermore, we are exploring collaborations for green hydrogen generation to contribute to the green energy revolution.”

Companies are seeing some good traction in terms of new projects hitting the ground. "The energy transition to cleaner sources, especially hydrogen economy is also boosting projects, green and blue hydrogen both. We are executing sizeable business in hydrogen projects for countries in the West. Green hydrogen process basically has three stages namely generation, storage and transmission (to the point of use). We, as manufacturers of static process equipment, play a very important role in building equipment for the storage and transmission of hydrogen. We have commissioned our new state-of-the-art manufacturing facility in Q1 of this year adding about 30 per cent to our capacity with close proximity to national highway. This helps us address larger requirements from our customers globally," opines Reginaldo D'Souza of Anup Engineering.

India is aiming for 500 GW of renewable energy by 2030, and green hydrogen will have to play a key part in achieving this goal. "For the EPC industry, opportunities include offshore wind, modularisation, digitalisation, and sustainability. Nuberg EPC is committed to green hydrogen solutions in line with India's energy mission and net-zero vision by 2047. India's green hydrogen potential is immense, backed by renewables and government support," comments Tyagi.

Leveraging on its low-cost manufacturing base, India can be a global production hub for green hydrogen related equipment and systems. At the same time, companies will have to invest in right technologies to enhance their manufacturing capabilities in electrolysers and balance of plant equipment to reap significant export revenue and establish India as a supply chain leader.

According to Jill Evanko, Chief Executive and President, Chart Industries, and founding member, IH2A, "India has the potential to become a regional supply hub for hydrogen production plants, playing to its competitive position in engineering design, manufacturing and services. This is a significant opportunity that will require large-scale manufacturing build out and investments, for electrolyser stack manufacturing and balance of plant equipment. Project developers and equipment majors are waiting to hear from the government on demand aggregation and secured offtake for early projects before they commit large capex investments. The estimated $ 45-50 billion equipment market opportunity is achievable and could turn India into a global supply chain hub in the developing green hydrogen economy.”

Hussain Shariyarr, SVP & Business Head, Godrej Process Equipment
There has already been an increasing trend in terms of the development of indigenous electrolyser manufacturers and technology tie-ups and partnerships are being announced by various companies.

Reginaldo D'Souza, CEO, The Anup Engineering Ltd
Green hydrogen is a process of generating hydrogen through the process of electrolysis using electrolysers run using renewable energy, where water is broken down to separate hydrogen.

AK Tyagi, CMD, Nuberg Engineering Ltd
The industry aims to achieve net-zero emissions, driven by effective policies. I am optimistic about the green hydrogen industry in India due to its potential for cost reduction through low-cost renewable energy sources and government initiatives.