India will soon invite competitive bids for its Rupee 4.96 billion ($60 million) subsidy plan for the use of renewable hydrogen in pilot transport projects, a senior government official said Feb. 16, following the issuance of guidelines earlier in the week.
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Cadastre-se agoraThe subsidy plan is part of India's Rupee 197.44 billion National Green Hydrogen Mission issued in 2023, which targets the production of 5 million mt/year of renewable hydrogen for exports and domestic use by 2030, the guidelines said Feb. 14.
"The Ministry of Road Transport and Highways will issue bids," the official said without giving a timeline.
"The scheme will provide financial assistance to close the viability gap due to the relatively higher capital cost of hydrogen powered vehicles and the infrastructure for hydrogen refueling stations in the initial years," it said.
The larger objective of the plan is to establish a renewable hydrogen ecosystem for the transport sector, the guidelines added.
With the expected reduction in the renewable hydrogen production cost over the years, the utilization in the transport sector is expected to increase, it added.
However, an LNG analyst at S&P Global Commodity Insights, Ashish Ranjan, said hydrogen vehicles will see a slow pickup in India.
"By 2030, we don't expect hydrogen only based vehicles on road, rather blending of hydrogen in CNG would be more feasible," Ranjan said. "Further, LNG is being explored in long-haul trucking."
Some of the pilots, which are already being discussed on the blending of hydrogen in CNG, allow for blending of up to 2% by volume of hydrogen, and blending ratios are expected to increase as pilots mature, Ranjan added.
Currently, India's CNG demand of 734 MMcf/d is expected to grow to 1,580 MMcf/d by 2030, according to Ranjan.
The Rupee 4.96 billion outlay is until fiscal 2025-26 and will not provide expenses for hydrogen production and land, the guidelines added.
Next steps
The scheme will apply to busses and trucks with fuel cell-based propulsion technology; buses and trucks with internal combustion engine phased propulsion technology and four-wheelers with a fuel cell or internal combustion engine-based propulsion technology, it said.
A couple of large oil companies have hydrogen bus programs on an experimental basis.
Indian oil has been plying conventional hydrogen-based busses in New Delhi with a refueling station close to the city in the last few years.
Reliance Industries, with its vehicle partner Ashok Leyland, unveiled hydrogen internal combustion engine technology solution for heavy-duty trucks in February 2023.
Reliance said it will test and validate the H2ICE technology for heavy-duty trucks before its first commercial deployment at scale, initially across its captive fleet.
In an inflection case, S&P Global sees India's hydrogen use in transport at 0.35 million mt in 2030, rising to 3.49 million mt by 2040.
India announced winners for the first round of auctions for subsidies for producing renewable hydrogen and electrolyzers on Jan. 10. It announced another auction intending to aggregate renewable hydrogen demand from the fertilizer plants and refineries on Jan. 19, S&P Global reported previously.
Platts, part of S&P Global, assessed New South Wales hydrogen produced via alkaline electrolysis at $2.10/kg Feb. 15, up 6.60% month on month.
It assessed Qatar hydrogen produced via alkaline electrolysis at $1.79/kg Feb. 15, unchanged on the month
Cost competitiveness
The scheme will also support the blending of methanol/ethanol and other synthetic fuels derived from renewable hydrogen in automobile fuels, the guidelines said.
"With the falling costs of renewable energy and electrolyzers, it is expected that vehicles based on green hydrogen can become cost-competitive over the next few years," the guidelines said.
"Future economies of scale and rapid technological advancements in the field of vehicles powered by hydrogen are likely to further improve the viability of transport based on green hydrogen," it added.
Designated "hydrogen highways" will see the hydrogen-fueled interstate buses and commercial vehicles ply, it said.
A Scheme Implementing Agency will be formed, which will issue a call for proposals and select an executive agency through a transparent process. It will identify the routes covering different terrains and climatic conditions across India, it said.
Winners will be awarded after taking into consideration the specific needs, merits and feasibility of each project, it added.