Introduction
Green hydrogen has emerged as a promising solution to address the challenges of reducing carbon emissions and transitioning to a sustainable energy future. This global update provides a summary of recent developments and initiatives taken by various countries across the globe.
Latest Developments on Green Hydrogen
India has entered the international race in establishing a green hydrogen economy to strengthen its energy security. Following the introduction of India’s inaugural green hydrogen policy, both private and state-owned companies have made numerous announcements regarding their plans to develop projects for green hydrogen production.
Reliance Industries Limited (RIL) is making a significant investment in green hydrogen, placing considerable confidence in its potential. RIL has set an objective to lower the production cost of green hydrogen to less than US$1 per kilogram by the end of the current decade. In order to achieve this target, the company has announced a capital outlay of Rs 75,000 crore (US$9.4 billion) over the next three years. This investment will be directed towards the development of manufacturing capacities for clean energy technologies, including electrolysers that enable the production of green hydrogen.
The National Thermal Power Corporation (NTPC), in alignment with the Indian government’s objectives for the sector, has set ambitious goals to lower production costs of green hydrogen to below US$2 per kilogram by 2025-2026. Moreover, the company is currently working on India’s inaugural hydrogen-to-electricity project, utilizing solid-oxide electrolysers and fuel cell technology provided by Bloom Energy, a US-based company. In this project, NTPC’s floating solar plant will generate the necessary power to operate the electrolysers, producing green hydrogen. Bloom Energy’s hydrogen fuel cell technology will then convert the hydrogen into carbon-neutral electricity, without the need for combustion, to supply power to NTPC’s Guest House located in Simhadri, Visakhapatnam.
These targets aim to surpass global projections and demonstrate a bullish approach towards advancing the green hydrogen industry in India.
The European Union (EU) has been actively encouraging the generation and adoption of environment friendly hydrogen as part of its endeavours to reduce carbon emissions in the economy. To aid the advancement and implementation of green hydrogen initiatives, the European Clean Hydrogen Alliance has been created. The EU has also implemented regulatory measures like the Renewable Energy Directive II, which establishes obligatory goals for renewable energy, including hydrogen, and the Energy Taxation Directive, which permits member states to levy lower tax rates on renewable and low-carbon hydrogen.
Germany has established ambitious objectives for the advancement of green hydrogen and has implemented several legal measures to foster its generation and adoption. The National Hydrogen Strategy of Germany sets a goal of installing up to 5 GW of electrolyser capacity by 2030. Additionally, Germany has put in place a system for certifying and tracing green hydrogen, guaranteeing its environmental authenticity and credibility.
Germany has recently announced a significant Carbon Contracts for Difference Scheme amounting to EUR 50 billion. This initiative aims to bridge the investment gap between low carbon and polluting technologies. While the scheme is open to all low carbon technologies, it is expected that green hydrogen will greatly benefit from it. As reported by Euractiv, companies participating in the program must propose a hypothetical CO2 price that would enable them to develop clean production methods while remaining competitive with companies that rely on fossil fuels. For instance, a steel manufacturer transitioning to green hydrogen might require a CO2 price of EUR 300 per tonne to maintain competitiveness. This means that a state subsidy of EUR 200 per tonne of CO2 avoided would be necessary, based on the current EU carbon price of approximately EUR 100 per tonne.
Australia possesses substantial potential for the production of green hydrogen owing to its abundant renewable energy sources. To leverage this potential, the Australian government has introduced the National Hydrogen Strategy, which concentrates on the domestic and global implementation of hydrogen technologies. Furthermore, various states within Australia, including Western Australia and Queensland, have independently enacted strategies and regulations to foster the expansion of the green hydrogen sector.
Japan has set a target to emerge as a prominent player in the utilization of hydrogen, particularly green hydrogen, on a global scale. To achieve this goal, Japan has recently revised its Basic Hydrogen Strategy, aiming to raise Yen 15 trillion (USD 107 billion) in public and private investments. The goal is to increase its hydrogen supply target by sixfold to reach 12 million tonnes by 2040, compared to the current usage of two million tonnes. While the strategy remains technology-neutral, concerns have been expressed regarding the country’s intention, reiterated in the strategy, to focus on co-firing gas and coal turbines with hydrogen-derived ammonia. However, a noteworthy aspiration outlined in the strategy is for “Japanese-affiliated” companies to install 15 GW of electrolyser capacity worldwide by 2030.
The United States has acknowledged the potential of green hydrogen as a sustainable energy solution. Various states such as California, Colorado, and New York have enacted policies and provided incentives to stimulate the growth of green hydrogen initiatives. Additionally, the Biden administration has expressed its endorsement of green hydrogen as a crucial component of its climate change and clean energy initiatives.
USA’s first-ever Clean Hydrogen Strategy and Roadmap unfolds a new strategy which outlines three crucial aspects for unlocking the potential of hydrogen in the United States: reducing production costs, expanding midstream infrastructure like pipelines and hydrogen hubs, and boosting demand for hydrogen in strategic sectors that have a significant impact on decarbonization efforts. Moreover, the strategy also unveils the tax credits and benefits given to the individual or organization dealing in green or clean hydrogen.
The Africa Green Hydrogen Alliance (AGHA) was launched at the Global Green Hydrogen Assembly in May 2022 to enhance collaboration and accelerate the progress of green hydrogen initiatives across Africa, six prominent African nations, namely Egypt, Kenya, Mauritania, Morocco, Namibia, and South Africa, have united to establish the Africa Green Hydrogen Alliance. The alliance aims to foster the development of green hydrogen projects throughout the continent.
The Africa Green Hydrogen Alliance concentrates on various aspects such as public and regulatory policy, capacity building, financing, and certification requirements. These efforts are aimed at facilitating the mobilization of green hydrogen production for both domestic consumption and export purposes.
By uniting African governments, the Africa Green Hydrogen Alliance aims to establish a cohesive and unified African perspective in global climate and energy discussions. Through this collaboration, the Alliance intends to raise awareness, create new opportunities, and drive concrete actions within the industry.
The Africa Green Hydrogen Alliance serves as a platform for fostering collaboration among the private sector, development finance institutions, and civil society. It provides a space for these stakeholders to work together towards the advancement of green hydrogen projects and initiatives in Africa.
Conclusion
Countries around the world are actively pursuing the establishment of a green hydrogen economy to enhance energy security and reduce carbon emissions. India, Germany, Australia, Japan, the United States, and African nations have all made significant commitments and implemented various strategies to foster the development and adoption of green hydrogen technologies.
Author – Namanveer Singh Sodhi (Associate)
