Green hydrogen

Indian Economy glossary

Topic: Environment and Sustainable Development · NCERT: Beyond NCERT

Meaning

Green hydrogen is hydrogen made by electrolysis (splitting water into hydrogen and oxygen using electricity), where the electricity comes from renewable sources such as solar or wind. Almost no carbon dioxide (CO2) is released when it is made. In India, hydrogen counts as "green" only if its total emissions are not more than 2 kg CO2 equivalent per 1 kg of hydrogen. This rule is set by India's Green Hydrogen Standard, notified on 19 August 2023 [2].

It matters because it can replace fossil fuels in sectors that renewables alone cannot clean up, such as steel, refining, fertiliser and shipping. It also cuts India's imports of natural gas and oil.

Explanation

How it is made

  • Electrolysis: an electric current passes through water in a machine called an electrolyser. The water splits into hydrogen gas and oxygen gas.
  • Why it is "green": the only input is water, and the power comes from renewables, so no CO2 is released during production.
  • Why the colour matters: hydrogen gas is the same whatever its colour. The colour tells you how it was made and how much CO2 was released.

Hydrogen by colour

Type Made from What happens to the CO2
Grey hydrogen natural gas or other fossil fuels released into the air
Blue hydrogen natural gas captured and stored using CCUS (carbon capture, utilisation and storage)
Green hydrogen electrolysis of water using renewable power near zero

Uses: the hydrogen economy

  • Hydrogen economy: an economy where hydrogen plays three roles:
  • fuel: for transport and ships
  • industrial input: for steel, oil refining and fertiliser

  • energy storage: surplus solar power made at midday can be stored as hydrogen and used later

  • Green ammonia (ammonia made with green hydrogen) has three uses:

  • fertiliser feedstock: urea today uses grey hydrogen made from imported gas
  • fuel for ships

  • hydrogen carrier: hydrogen is hard to store and ship, so it is moved as ammonia and turned back into hydrogen later

  • Hard-to-abate sectors (sectors such as steel, cement and chemicals whose emissions are hard to cut with renewable electricity alone) are where green hydrogen helps most.

What decides its spread: the green premium

  • Green premium = Cost of clean option − Cost of fossil option. It is often shown as a % of the fossil cost.
  • Worked example:
  • Grey hydrogen costs ₹200/kg. Green hydrogen costs ₹350/kg.
  • Green premium = ₹350 − ₹200 = ₹150/kg.
  • As a share of the grey price: 150 ÷ 200 = 75%.

  • Industry will not switch until this gap closes.

  • The premium falls when:

  • renewable power and electrolysers get cheaper
  • production grows larger, so the cost per kg falls
  • carbon pricing (a charge on CO2 emissions) makes grey hydrogen costlier
  • the government pays incentives, as India does through SIGHT

In India

  • National Green Hydrogen Mission (NGHM), launched January 2023:
  • Target: 5 MMT (million metric tonnes) per year of green hydrogen production by 2030.
  • Initial outlay: ₹19,744 crore up to FY 2029-30 [1].
  • ₹17,490 crore goes to SIGHT (Strategic Interventions for Green Hydrogen Transition). SIGHT gives incentives for making electrolysers in India and for producing green hydrogen [1].

  • The rest is ₹1,466 crore for pilot projects, ₹400 crore for R&D and ₹388 crore for other components [1].

  • Expected gains by 2030: about ₹1 lakh crore less in fossil fuel imports and nearly 50 MMT per year less CO2 [3].

  • Green Hydrogen Standard (19 August 2023): sets the limit of 2 kg CO2e per kg of hydrogen [2].
  • Climate targets it supports:
  • Updated NDC (August 2022): cut the emissions intensity of GDP (CO2 emitted per unit of GDP) by 45% by 2030 from the 2005 level [4].

  • NDC for 2031-2035: a 47% cut by 2035 [5].

  • Energy trilemma link: a country must deliver energy security, affordability and sustainability at the same time.

  • Green hydrogen made at home improves security, because it replaces imported gas.
  • It improves sustainability, because it cuts CO2.
  • It is still weak on affordability, because of the green premium.

Don't confuse with

  • Grey hydrogen: made from natural gas, with the CO2 released into the air. It is the cheapest option and is used in fertiliser today.
  • Blue hydrogen: also made from natural gas, but its CO2 is captured and stored (CCUS). It is not made by electrolysis, so it is not green.
  • Green ammonia: this is not a type of hydrogen. It is ammonia made using green hydrogen, and it is used as fertiliser feedstock, ship fuel and a way to carry hydrogen.
  • Renewable energy: solar and wind produce electricity. Green hydrogen is a product made using that electricity, which can be stored and carried where power lines cannot reach.

Prelims Hooks

  • Green hydrogen = electrolysis of water using renewable power. India's standard (notified 19 August 2023) allows not more than 2 kg CO2e per kg H2 [2].
  • Blue hydrogen = natural gas with CCUS. Grey hydrogen = natural gas without CCUS. Trap: blue hydrogen is not made by electrolysis.
  • NGHM (January 2023): 5 MMT per year by 2030. Outlay ₹19,744 crore, of which SIGHT gets ₹17,490 crore [1].
  • SIGHT supports two things: electrolyser manufacturing and green hydrogen production [1].
  • NGHM is expected to save about ₹1 lakh crore in fossil fuel imports and nearly 50 MMT per year of CO2 by 2030 [3].
  • Green ammonia acts as a hydrogen carrier. Hydrogen is hard to store and ship, so it is moved as ammonia.

Mains Points

  • Green premium and industrial policy (GS-III): green hydrogen costs more than grey hydrogen, so the market alone will not switch.
  • SIGHT (₹17,490 crore [1]) uses public money to close the cost gap.
  • Making electrolysers in India links to Atmanirbhar Bharat.

  • Carbon pricing and larger production can cut the premium further.

  • Energy security and import savings: fertiliser plants use grey hydrogen made from imported gas.

  • Green hydrogen made at home cuts this dependence, with import savings of about ₹1 lakh crore by 2030 [3].

  • This helps balance the energy trilemma: it brings security and sustainability together.

  • Decarbonising hard-to-abate sectors and meeting the NDC: steel, refining, fertiliser and shipping cannot run on renewable electricity alone.

  • Green hydrogen, together with CCUS, is a key tool to reach the 45% (2030) [4] and 47% (2035) [5] emissions-intensity targets.
  • Challenges to name in an answer: high cost, heavy water and land needs, and the difficulty of storing and transporting hydrogen.

Related concepts

Read more

Sources

  1. 1Cabinet approves National Green Hydrogen Mission (PIB)pib.gov.in · tier 1
  2. 2National Green Hydrogen Mission (NGHM) (PIB)pib.gov.in · tier 1
  3. 3Green Hydrogen Mission expected to reduce ₹1 lakh crore fossil fuel imports and nearly 50 MMT CO2 by 2030 (PIB)pib.gov.in · tier 1
  4. 4India committed to reduce emissions intensity of GDP by 45% by 2030 from 2005 level (PIB)pib.gov.in · tier 1
  5. 5Cabinet approves India's NDC (2031-2035) (PIB)pib.gov.in · tier 1