Green Hydrogen: Transformative Potential and Challenges

November 2, 2023

-By  Aditya Chinwan



Green hydrogen stands at the forefront of a global shift towards sustainable and environmentally friendly power sources. As societies grapple with the urgent need to think about climate change and transition away from traditional fossil fuels, the focus on green energy technologies has never been more crucial. India has been at the forefront of fulfilling its obligations under SDG 7 by incentivizing the development of renewable energies.

Green energy represents a paradigm shift in how we generate and consume power. Embracing renewable sources such as solar, wind, hydro, and geothermal, green energy endeavours to minimise ecological impact and reduce carbon footprints. The pursuit of green energy is not merely a technological advancement. Still, it is a commitment to fostering a sustainable and resilient energy ecosystem that can sustain the needs of present and future generations. While green hydrogen holds promise, the journey to a sustainable energy future also relies heavily on rare earth minerals. These minerals, essential for producing green technologies like wind turbines, electric vehicles, and batteries, introduce a complex set of challenges.

One of the most promising sources for fulfilling the ambitions of the Green transition has been the development of Green hydrogen, which not only has the potential to reduce our dependence on fossil fuels but also can cut down on emissions and create more jobs. However, the upfront cost of producing green hydrogen is much higher than traditional fossil fuels, making it a difficult economic transition.

Green Hydrogen

Green hydrogen, often hailed as the fuel of the future, is hydrogen produced through a process known as electrolysis using renewable energy sources. In this method, water (H₂O) is split into hydrogen (H₂) and oxygen (O₂) using electricity generated from clean energy sources such as solar, wind, or hydropower (Global Programme on Green Hydrogen in Industry | UNIDO, n.d.). Unlike grey or blue hydrogen, which relies on fossil fuels and carbon capture, green hydrogen production is entirely emission-free, contributing to a sustainable and low-carbon energy future.

The war in Ukraine has triggered a global energy crisis due to a lack of fossil fuels, leading to an unprecedented rise in the price of natural gas and coal. Forcing Europe to import significantly more liquefied natural gas (LPG) than usual, furthering the issue of worsening climate change. However, decarbonising the planet suggests a different world in 2050, one that is more accessible, efficient, and sustainable. But in contemporary times, it doesn’t look so.

Therefore, the development of green hydrogen is an important step towards a more sustainable energy future. It is essential that governments, private companies, and international organisations come together to invest in green hydrogen research and development to ensure that it is accessible and affordable for all.

Green Hydrogen Mission, 2023

The National Action Plan on Climate Change (NAPCC), launched in 2008, is a comprehensive policy framework outlining India’s strategy to combat climate change. The Indian government is actively shaping its policy and regulatory frameworks for green hydrogen, recognising its pivotal role in sustainable energy transition.  The National Green Hydrogen Mission was launched by the Union Ministry of New and Renewable Energy of the Indian government, which aims to reduce the cost of green hydrogen production in India because green hydrogen has limited production in India.

The mission, which has a budget of rupees 197,444 crores, aims to address this by making India a major producer of green hydrogen and its derivatives. And also the key components of this mission include financial incentives for domestic manufacturing of electrolysers, pilot projects in various sectors, green hydrogen hubs, infrastructure development, regulatory standards, R&D, skill development and most importantly, public awareness.  It aims to achieve 5 million metric tonnes of green hydrogen production capacity by 2030. Which will reduce fossil fuel imports, create jobs, and stop CO2 emissions. Additionally, they waive the inter-state transmission charges. Lastly, the green hydrogen mission seeks to develop affordable and accessible green hydrogen technology for promoting sustainability and energy independence.

India’s Collaboration in Green Hydrogen

India has been actively collaborating with various countries and multilateral bodies in the field of Green Hydrogen as part of its commitment to promoting clean and sustainable energy solutions for a better world.  The Indian government has negotiated bilateral agreements with several countries to foster collaboration in Green Hydrogen, and some notable partnerships include those with Germany, the United Arab Emirates, and Australia. These collaborations often involve knowledge sharing, joint research projects, and technology transfer. Furthermore, India’s collaboration with international financial institutions like the World Bank and the Asian Development Bank.  Which has to secure financing for Green Hydrogen projects and related infrastructure development. During the International Conference on Green Hydrogen (ICGH-2023) which was held between July 5 and July 7 in India. The Asian Development Bank (ADB) has plans to provide $20-$25 billion over five years to support India’s green growth. The World Bank has approved $1.5 billion to support India’s low-carbon transition journey. The European Investment Bank (EIB) has pledged one billion euros to develop a large-scale hydrogen industry hub (Team, 2023).

Case Study: India and Australia’s Cooperation in Green Energy

With the exchange of the Terms of Reference for the India-Australia Green Hydrogen Taskforce, composed of Australian and Indian green hydrogen experts, India and Australia reaffirmed their shared ambition in this area on May 24, 2023. The task force will provide a report to the India-Australia Ministerial Energy Dialogue on the trade, commercial, and research opportunities between the two countries through the production and use of green hydrogen. India has been at the forefront of integrating renewable energy into its energy mix. With ambitious targets outlined in the International Solar Alliance and National Wind Mission.

Australia’s expertise in mining and resource management also positions it as a key player in the supply chain for critical minerals essential for green technologies, including rare earth minerals. Australia can assist India in achieving its climate change objectives by offering financial support, investments, knowledge in the extraction of vital minerals, and technology to decarbonise hard-to-abate industries like steel. Whereas, Indian companies like Adani mining can provide an alternative source of business for Australia, and its businesses are looking to establish manufacturing facilities there as well. These businesses have already made significant local investments in green hydrogen projects.

Furthermore, the collaboration between India and Australia in green energy extends to various dimensions. Joint research initiatives, technology exchange programs, and collaborative projects have been initiated to leverage each country’s strengths.

Way Forward

As we stand at the dawn of a transformative era in the global energy landscape, several key trends are shaping the future of green energy. Emerging technologies, such as advanced energy storage, artificial intelligence in energy management, and innovative materials for solar panels, are gaining prominence. The integration of smart grids and the exponential growth of electric vehicles are reshaping consumption patterns, emphasising the need for a flexible and adaptive energy infrastructure. As we discussed, the future of India-Australia cooperation in the green energy sector holds immense promise. Anticipated changes include deeper collaboration in green hydrogen production, rare earth mineral sourcing, and joint ventures in cutting-edge research and development. As both nations recognise the urgency of addressing climate change, we foresee a strengthening of their partnerships, potentially leading to shared investment frameworks and aligned policy goals.

For policymakers and industry stakeholders, it is imperative to consider a set of strategic recommendations.

    • Government Support: Governments should maintain their support for renewable energy projects by implementing favourable policies, offering subsidies and establishing robust regulatory frameworks.
    • Cross-border Collaboration: Prioritize international collaborations, particularly between developed and developing nations. To harness each country’s strengths and build a more interconnected and resilient global green energy ecosystem.
    • Research and Development: The Government is looking to bolster scientific research through the development of the National Research Foundation, (NRF). Green Hydrogen research can also be incentivised through it.
    • Energy Storage: Invest in breakthroughs in energy storage solutions to address the intermittency of renewable energy sources and ensure a reliable energy supply.
    • Rare Earth Mineral Recycling: Establishing a centre of excellence on Rare Earth Minerals that periodically review the list of required minerals keeping India’s Green Hydrogen needs in mind
    • Financing: A green bond issued by the Indian government is a debt instrument specifically earmarked to fund environmentally sustainable projects. Hybrid Annuity Models (HAM) as well as Viability Gap Funding (VGF) can also incentivise crowding in of private investments.
    • Government Portal: Creating a dedicated government portal for Green Hydrogen in line with India Renewable Energy Idea Exchange (IRIX) Portal for sharing ideas across the world community.

In summary, global cooperation is crucial in navigating the complexities of the energy transition. India ranks fourth in renewable energy, and the Ministry of New and Renewable Energy is leading the charge for sustainable development. However, more needs to be done to incentivise renewable projects, address the unique challenges of developing countries, and advance energy storage technology for a successful transition to a greener future.