This blog presents a perspective towards the possibility of hydrogen-based derivatives in India. India is at the stage of research and demonstration. In order to commercialize, it will require continuous funding for several decades. Hence, a direct answer cannot be given for the question of viability as it depends hugely upon future circumstances. This blog involves an assessment of the current efforts of the government and also discusses other solutions and strategies which the government could employ to do justice with this project. The first part highlights the efforts that have been taken by the government and the efforts the government is willing to take in the future. The second part constitutes the challenges that the country will face in order to achieve this milestone. The third segment will include the legislations which the government needs to formulate to support the project. The fourth part involves the solutions to overcome the challenges and the status of implementation of these solutions in India. The final part of the blog would be a conclusion.

1. Introduction 

The focus of this blog is to examine the future prospects of hydrogen projects in India. The aim is to switch from fossil fuels to a green hydrogen economy. The establishing of a hydrogen economy in India poses several challenges which requires consistent efforts. Most countries including India are aiming towards a green hydrogen economy due to several reasons. The first and foremost reason being the depletion of non-renewable sources like coal and petroleum. Second, generating power through non-renewable sources cause a lot of pollution to the environment. Green hydrogen does not cause any pollution and is also non-exhaustible. In India, most of the energy sources like coal and oil are imported from other countries. Its dependency on oil imports isaround 80 percent.

To reduce this reliance, shifting to a hydrogen economy becomes one of the most important goals. India is a signatory to the Paris Agreement and under this agreement, ithas promised to devise ways to reduce the green-house gas emissions and use cleaner sources for power generation. India is also a part of a global initiative – Mission Innovation which aims to produce energy through renewable sources by overcoming all the barriers. Under this project, India targets to produceat least 75 percent of its hydrogen from renewable resources. If India is able to achieve this milestone, its reputation will improve internationally. Therefore, India also owes a commitment to the international bodies to switch to renewable energy sources.

This project is challenging as production, transport and storage of hydrogen is costly. Research groups are continuously working towards finding new and cost-effective ways to produce hydrogen.Some common methods include electrolysis, steam methane reforming, biomass gasification, partial oxidation of heavy hydrocarbons, coal gasification, photo-electrochemical processes etc. Most of these processes are expensive and do not produce green hydrogen Steam methane reforming is thecheapest and most common method of producing hydrogen in India. However, this process produces grey hydrogen which does not align with the government’s objective of making India a green hydrogen economy. Thedifference between the two kinds of hydrogen is that grey hydrogen involves the emission of greenhouse gases whereas green hydrogen is free from such emissions.

2. Creation & Development of Hydrogen Market: Current Status

2.1 Research and Development Efforts

Under National Hydrogen Roadmap 2006, the Department of Science and Technology organized a ‘hydrogen valley platform’ under whichgovernment invited several industries, institutions and policymakers to share their ideas and experiences regarding hydrogen projects. The government is also supporting various R&D tasks across India. Several institutions are researching on efficient and effective ways for producing hydrogen. For example: development of newer and cheaper membranes for electrolysis, creation of catalysts and electrodes for photo-electrochemical water splitting, improvisation of the carbon capture and sequestration technology etc. In terms of storage and transport of hydrogen, researchers are finding the best materials to make high-pressure hydrogen cylinders and pipelines. They are also designinglow cost fuel cells for hydrogen fuel cell vehicles. These are just few important areas of research, due efforts and funds have been dedicated towards devising newer and more cost-effective ways of producing, transporting and storing hydrogen.More than a hundred institutions and universities across India are involved in the R&D with the government. The attempts are completely focused towards locating greener methods of producing, transporting and storing hydrogen. 

2.2 Collaborations and Investments: Government & Private Sector Industries (Indian and International)

2.2.1 Government Support:

This sector has started to gained a good amount of government support, private sector investment and international spotlight. Ministry of New and Renewable Energy is in charge of development of hydrogen project in India. In August, 2021, thePrime Minister announced National Hydrogen Mission to increase the use of renewable resources. Under theUnion Budget 2021-22, 25 crores have been allocated to R&D in hydrogen energy. MNRE has also proposed afinancial outlay of 800 crores for the next three years. Furthermore, during last few years, MNRE and institutions like CSIR, DRDO, DSIR, DAE and DST have spent crores to support the R&D activities.

2.2.2 Private Sector Investments:

One of India’s largest solar platform, Acme Solar Holdings Ltd. is going to establish a manufacturing unit for production of green ammonia and green hydrogen. The production capacity of this plant will be 2200 metric tonnes per day. This energy will be exported to Oman.Reliance Industries have taken up the task to massively manufacture low cost and high efficiency electrolysers for the production of green hydrogen.Adani Enterprises have also collaborated with Maire Tecnimont to support the green hydrogen projects in India. Indian Oil Corporation Limitedhas also invested in this project by carrying out demonstration activities across India. According to some anonymous government sources, India will also beinviting bids from private sector to develop its green hydrogen plants.

2.2.3 International Collaborations:

“India has signed MoUs with several Gulf Cooperation Council (GCC) countries to improve investment and introduce transformational technologies. GCC countries have years of experience in the energy sector. In return, India will also provide R&D support to the GCC countries. India is also expecting a hydrogencollaboration with Bahrain to increase energy production from renewable resources.

2.3 Demonstration activities across India

Demonstration activities help the institutions examine the system and improve any flaw associated with it which helps to enhance the performance of the project. Several demonstration activities are being conducted across the country since many years. “These include running hydrogen dual fuel SUV, Proton Exchange Membrane Fuel Cell System powered automobiles, hydrogen fuelled two and three wheelers, HCNG based bus in different cities and conducting trials for hydrogen fuelled internal combustion engine, multi cylinder IC engine, emission reduction hydrogen engine, energy storage system, hydrogen refuelling facilities, hydrogen purification devices, hydrogen compression systems, back-up power mechanisms etc. All thesepilot demonstration activities are being carried out by the giant and well-off industries and institutions like IOCL, Mahindra, TATA, Hyundai, BHU, IIT-Delhi, UPES Dehradun, IIT Kanpur, IIT Madras, IIT Guwahati, IIT Bombay, etc.

2.4 Existing Infrastructure for production, transport and storage

Presently, India is static at the stage between demonstration and commercialization. Hydrogen is commercially utilized in the industrial sector only. “Quite recently, TATA motors launched India’s first fuel bus in 2019 in collaboration with ISRO and IOCL. In addition to that, Hyundai Motors has also planned to build India’s first fuel cell Nexo SUV. NTPC is also intending make fuel cell buses and cars for the cities Leh and Delhi. Several hydrogen generation systems and hydrogen refuelling stations will also be establishedacross Indian cities. In terms of industrial use, there is limited infrastructure for hydrogen production, transport and storage.

Companies like Praxair, Linde Hydrogen Fuel Tech, Aditya Birla Chemical Industries Praxair, ITM Power Plc designs and Sukan Engineering Ltd., etcare engaged in a variety of commercial activities related to hydrogen. Some produce hydrogen, while some of them transport it through pipelines to households and industries. SAGIM and Air Products are leading manufacturers of hydrogen. Proton Exchange Membranes designs storage cylinders for hydrogen. Bhoruka plant produces hydrogen through the costliest method of electrolysis. Air Liquide Company establishes hydrogen vehicle charging stations worldwide. Gujarat Chemicals and Alkali Limited is a chlor-alkali industry and produces hydrogen as by-product. The company Fuel Cell Energy is involved in supply and storage of hydrogen. It is also involved in the technologies of carbon capture, on site power generation, local hydrogen production, transportation, energy storage, recovery. This Company has undertaken to develop, operate and maintain fuel cell systems.Other industries such as H2sacn is developing a technology to sense and scan hydrogen gas leaks. Indian companies are carrying out commercial work in different areas relating to production of hydrogen, storage, and transport also. The biggest concern is that all these industries operate at a very small scale and caters the demand of a very tiny fraction of industrial and household users. Hence, there arises an alarming need to increase the current infrastructure.

3. Challenges in Developing Hydrogen Economy

The main challenge before the government is to set up a hydrogen grid which involves developing the necessary infrastructure for this project uniformly across India. New cost-effective technologies will have to be devised to produce, transport, and store hydrogen. In India, most amount of hydrogen is produced throughsteam methane reforming which involves emission of greenhouses gases.Carbon capture technology should be used to capture the harmful gases however, this technology is very expensive. Hence, research is required in this area.Green hydrogen can be produced through electrolysis using renewable sources like solar and wind which is a good possibility in India due to its tropical location. However, this has not been explored much in the past. Hence, establishing these plants for production of green hydrogen becomes a challenge.

Transporting and storing hydrogen poses different set of problems. Hydrogencannot be stored in ordinary cylinders or be transported in ordinary truck tanks as it requires special cryogenic tanks which are expensive. Additionally, the pipelines for natural gas cannot be used to transport hydrogen.Hydrogen can easily penetrate the pipelines due to their small molecular size which can make the pipes brittle. Hence, designing pipelines for hydrogen supply requires engineering excellence which again comes with a cost. Supply of hydrogen is as important as its production. For instance, during the second wave of Covid-19, sufficient oxygen was being produced but the major issue was its transport. The production of oxygen was concentrated at one place which led to delays. Hence establishment of production, usage, transport, and storage chains uniformly across the country becomes important. Uniform distribution will help minimise the amount of hydrogen lost while being transported to remote places. It will also save the additional fuel required to transport hydrogen through truck tanks.

Furthermore, hydrogen cannot beimplemented easily into the transport sector as designing price friendly FCEVs or hydrogen fuelled buses invite the problems of storage, space, weight, efficiency, refuelling time, and safety. All these issues cannot be addressed without sufficient funds. Many a times, despite receiving funds, corruption reduces the size of the funding. Hence, corruption also becomes an obstacle for the government. Another herculean task is creation of demand. The demand for hydrogen is present only in the industrial sector such as in fertilizer industries and methanol production plants. The industrial feedstock plantsalso utilize hydrogen for the creation of ammonia. This demand needs to be created in other sectors also like the transport, aviation, industrial and household. Additionally, substitutes of hydrogen are already available. Fossil fuels are better than hydrogen in many aspects which also makes the market penetration of hydrogen difficult.

Due to lack of profitability owing to less demand, private firms may be less driven to invest in developing a hydrogen economy. Private players can provide high quality professionals, modern and sophisticated technology to the government. Their absence can slow down the process of development. Other than this, a swift transition from a demonstration stage to commercialization is required. Demonstration activities have taken a decade now and must be pushed fast for commercial enforcement. This has made the commercialization process to slow down and such hurdles must be abridged for the accomplishment of hydrogen project in India.

4. Requirement of Proactive Legal Support

The presence of a powerful legal framework can provide a mechanism to execute the hydrogen projects across the country. Availability of laws in this sector will ensure that the producers and distributors do not commit mischief or fraud. Absence of laws can lead to industries and distributors not meeting the correct standards which can frustrate the expectations of the customers and waste the time and energy of the government. Laws can make the development process safe and organized. Hence, legislations are as important as technological advancement.

In India, energy law is governed under various provisions such as the Electricity Act, 2003; Petroleum and Natural Gas Regulatory Board Act, 2006; Oilfields (Regulations and Development) Act, 1948; Petroleum Act, 1934; Explosives Act, 2008; Gas cylinder Rules, 2004, etc.The institutions and organizations which are in stake of designing these rules and regulations are MNRE, Ministry of Petroleum, Natural gas Petroleum Explosives Safety Organization, Bureau of Indian Standards etc.

4.1 Important Amendments

Many statutory acts do not recognize ‘hydrogen’ as a source of energy. Hence, amendments are required to include it.The Government has already drafted and floated the new Electricity Rules and invited comments which shall incorporate rules and regulations for the implementation of hydrogen projects. Additionally, the Ministry of Petroleum and Natural Gashas proposed an amendment under the Oilfields and Development Act to widen the definition of ‘mineral oils’ to include hydrogen under the concerned act. Motor Vehicle Rules also needs to be amended to incorporate hydrogen as an automotive fuel. Changes must also be brought to the Gas CylinderRules to include laws for storage of hydrogen in cylinders. Many legislations have to be adjusted according to the hydrogen project.

4.2 Production, Transport and Storage

Guidelines for the production and manufacture of hydrogen should be formulated by the Petroleum Explosives Safety Organization and Bureau of Indian Standards as per theInternational Organization of Standards. If proper standards are laid down, the organizations producing quality hydrogen can be identified. A quality check can provide reassurance to the procurers and will also avoid any confusion which the consumers may have about the quality of hydrogen.The concerning fact about hydrogen is that it is flammable and in cases of a leak, it cannot be easily detected. Hence, laws must incorporate engineering standards for designing hydrogen storage cylinders, tanks or pipelines to avoid such leaks. Additionally, sensors should be designed to detect leaks and installation of these sensors must be mandated wherever necessary.

Currently, there are no rules for hydrogen run vehicles. Car manufacturing companies must be acquainted with the necessary guidelines for the safe, efficient and effective manufacture and operation of these vehicles.Standards can be established with respect to the size and weight of hydrogen storage cylinders, mileage, refuelling time and other necessary parameters. The Ministry of Road, Transport and Highwaysalso needs to interject to provide licensing to run fuel cell vehicles. The Government also needs to prepare guidelines to keep a watch on the prices of these vehicles to avoid any monopolistic practices.

Hydrogen is mostly used in the industrial sector. Government can grant tariff benefits to the firms who use hydrogen. Laws mandating the set-up of water electrolysers to generate hydrogen where solar or wind energy plants are present can also boost this project. Similarly, legislations can be framed to compulsorily establish carbon capture and sequestration technology in places where grey hydrogen is produced. This will lead to production of green hydrogen. However, such compulsion should be made only after considering the cost of electrolysers, cost of carbon capture technology and the ability of the plants to bear the costs of setting up new technologies. Several industries like the chlor-alkali based plants produce hydrogen as a by-product. Rules must be made to avoid any wastage of the additional hydrogen being generated. The extra hydrogen must be duly managed or diverted to the needy consumers.

4.3 Regulatory Laws

Hydrogen can also be used to produce electricity. However, approval needs to be taken from authorities in order to construct and generate such power plants in India. These power generation plants also need to adhere to certain safety, operational, and constructional standards given by the CEA. They must be eligible to provide transmission services and should compulsorily obtain adistribution license from CERC or SERC. After completing these formalities, plants can legitimately supply power across India. This is a basic procedure for the distribution of power. The governmental and regulatory bodies like CERC, SERC, CEA, Power Ministry and Renewable Ministry must function together tocustomize these regulations of power distribution according to the hydrogen project. If the formulation of regulatory laws is not completed simultaneously with the technological improvements, then the process of commercialization will retard.

5. Critical Analysis

The challenges that the country will face while commercializing the project deepens the question of viability. Hence, it becomes important to understand how the government is working to handle the challenges. This section of the blog encapsulates the solutions to overcome the problems and discusses the level of implementation of these solutions in the country. If practical solutions are being implemented by the government, a reasonable person may positively assess the viability of hydrogen project. Hence, this segment will directly answer the question of viability based on the facts mentioned in the previous segments.

The most essential step in the beginning of a project is conducting sufficient research and demonstration activities. As indicated in the initial part of the blog, India is carrying out several such activities. Hence, the condition of extensive research is satisfied. However, very few demonstration activities are conducted by the government. All the successful projects go through stages of: Research, Demonstration and Commercialization. Most projects in India are still in the Research stage and very few in the Demonstration stage. Hence, the pressing issue is the need to speed up the process from research to commercialization or at least increase demonstration activities. The solution to speed up this process is government funding and presence of a political will. While these two things become the driving forces, government should also analyse the factors which makes the transition from research to demonstration slow and remove all the possible barriers. Prime Minister Narendra Modi,had mentioned in his 2021 Independence Day speech that ‘green hydrogen’ production in India can provide a gear to the Indian economy which points out his intention to work in the field. In furtherance of this idea,the government will also invite bidding from the private sector.

Many giant private players like the Acme Solar Power Holdings Ltd. Reliance Industries, Adani Enterprises, IOCL have already started to invest in this project. Few years ago, the government had also built its relations with the GCC countries to introduce hydrogen technology in India. These GCC countriesdominate the world’s energy sector and their involvement could provide an edge to India. Over the years, ample funds have also been provided to the R&D institutions. MNRE and CSIR have spent more than 25 crores over the last 10 years. While the DRDO hasinvested 50 crores and plans to spend 100 crores more in the coming years. The government is also planning to introduce legislations to support this project. While the actions of the government indicate their support, the Prime Minister’s speech indicates the political will and the level of attention that the government is willing to give to this project.

The large scale research activities in the country can bridge the issue of unaffordability and lack of efficient technology. The government can overcome these challenges by involving private players in the commercialization activities. The private players can add to the technical know-how. They have the necessary funds for mass production which can drive down the prices. In case of scarcity, government can provide funds to the private players through viability gap funding scheme or under other schemes. This may attract more private players to invest in this project. More number of firms can increase the competitiveness and further pull down the prices. Government may also provide tariff benefits to the firms who are supporting this project directly. For example- the car companies designing FCEVs can be given tax benefits.

Governmental cooperation can boost this project to a great extent. The Indian Government is planning to implement green hydrogen purchase obligation on firms and is also concocting to implement green energy open access scheme.Under the latter scheme, the government will provide green hydrogen to all the consumers who are willing to procure it if they meet the eligibility criteria. Several solar and wind energy plants are also going to be established in India in the next few years. The focus on solar and wind energy plants is necessary as they can be used to produce green hydrogen through electrolysers. The government is also working towards implementing the production-linked incentive scheme for electrolysers.Under this scheme, the primary equipment for producing green hydrogen i.e. water electrolysers’ price will be reduced.Reliance industries has also partnered with Denmark’s Stiesdal Company to manufacture low cost electrolysers. This will encourage the solar and wind energy plants to install electrolysers to produce green hydrogen.

Another challenge is to create demand. Currently, only the industrial sector uses hydrogen. To increase the demand, government is willing to impose green hydrogen consumption obligations on the industry. Giant industries usually have the finances to switch to alternative energy sources and hence, beginning from the industrial sector and then, moving to the household is a good idea. While industries switch to green hydrogen, the government can devote its time to generate awareness amongst the public regarding green hydrogen. Meanwhile, the cost of technology may fall, automatically increasing the production and decreasing the prices. Prices of fossil fuels are also rising. These three factors can naturally push people to use hydrogen as the energy source thereby, increasing demand. Additionally,the green energy open access can also boost the demand. Hence, consistent government support through laws, policies and funding can give the project a boost.

Development of hydrogen grids across the country can be a challenge and will require funding and involvement of private players. However, India has not reached the stage where it can immediately develop a grid as most of the projects are at the research and demonstration stage. Nonetheless, it can still design tanks to store or transport hydrogen as it will be beneficial for industrial purposes. Small pipelines can also be constructed to transport hydrogen to local industries. This will provide a start to the establishment of supply chain. In fact, pipelines used to transport natural gas can be used to transport hydrogen and natural gas together (HCNG). This way the existing infrastructure can be innovatively used at many areas.

Continuous funding becomes a challenge due to change in government and its priorities in the long term. The research and demonstration stage requires less funds however, commercialization would require enormous amount of funds. Up until now, the government and other institutions have been supportive enough to provide funds. This consistent push needs to be maintained for few decades to fully commercialize this project.

6. Conclusion

There are factors which will make the hydrogen project a big possibility; however, there are challenges whose abridgement is uncertain. The current status of research, government support, political will, commitment, private sector engagement and international bodies involvement gives a ray of hope towards the accomplishment of the project. However, non-availability of funds in the future can be an issue due to change in government or its priority which can shake the foundation of this project. India has achieved many challenging milestones in the past such as the Mangal Mission, development of top-class defence systems, deployment of 4G networks across the country, etc. Similarly, this project can be made viable with government’s focus and commitment.


This blog is a part of ‘Scrivener- Blog-writing Competition’ held in collaboration with Khaitan & Co., Delhi.

About the Author 

Ms. Kopal Kesarwani is a third-year law student at the Jindal Global Law School, NCR. She is also the winner of Scrivener in the “Viability of Oxygen/Hydrogen based Derivatives in India” category.

Editorial Team 

Managing Editor: Naman Anand 

Editors-in-Chief: Jhalak Srivastav and Akanksha Goel 

Junior Editor: Manav Ganapathy

Preferred Method of Citation  

Kopal Kesarwani, “Viability of Hydrogen based Derivatives in India” (IJPIEL, 28 March 2022) 


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