Case for faster switch to green hydrogen

India’s oil companies are reportedly reluctant to move on from the grey hydrogen they have invested in, to produce sulphur-free petrol and diesel, and embrace green hydrogen, produced using renewable energy. The way forward is to step up hydrogen output with faster depreciation and other fiscal benefits and, in tandem, to rev up its blending with compressed natural gas (CNG) to slash carbon emissions and boost energy efficiency.

Grey hydrogen obtained via steam reforming can be gainfully blended with CNG in bus fleets for much environmental and economic benefits. Studies suggest that 18% hydrogen blending in CNG, or H-CNG, can bring down carbon monoxide emissions by as much as 70% and raise fuel efficiency too. The pilot project of Indian Oil Corporation (IOC) for H-CNG in Delhi can well be scaled up nationally, across all dense metros to begin with. The oil companies would then be able to spread and allocate overhead costs better. Note that IOC has developed innovative technology for H-CNG, by using catalysts for reforming natural gas partially so that a target percentage of hydrogen is directly produced in the mixture, the rest being unconverted CNG. Globally, hydrogen required for blending in CNG is generally produced via electrolysis of water, followed by high-pressure blending with gas, which are energy-intensive processes. The oil majors clearly need to step up R&D efforts for green hydrogen and efficient electrolysers.

Meanwhile, it would make perfect sense to extend tax benefits for grey or green hydrogen, say, under Section 35 AD of the Income-Tax Act, for speedy depreciation of plant capacity. Accelerating the pace of change is entirely feasible, as seen in the switch from Bharat Stage IV to Stage VI emission standards.


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