India Set To Miss 2030 Hydrogen Goal Due To Demand Uncertainty

India will likely miss its 2030 goal of producing 5 million tons of green hydrogen annually, as global policy shifts force a recalibration of the industry, a senior official said on Tuesday.

A series of delays in clean fuel mandates has clouded the global hydrogen demand outlook. That’s prompted Indian producers to stretch project timelines to avoid oversupply, Santosh Kumar Sarangi, secretary at the Ministry of New and Renewable Energy, said at an industry conference in New Delhi. 

The International Maritime Organization last month postponed a vote on requiring the global shipping industry to shift to green fuels. India also originally aimed to mandate industries’ use of green hydrogen and ammonia to stimulate domestic demand, but dropped the strategy after costs proved prohibitive.

Once a hyped climate solution, the green hydrogen industry — which uses renewable energy to produce the zero-carbon gas — has faced cost and technical hurdles in scaling up. Around the world, project withdrawals have accelerated as developers struggle to secure customers willing to pay a premium for the fuel. 

India now expects green hydrogen production capacity to hit 3 million tons by the end of the decade, while the goal of 5 million tons a year will likely only be achieved by 2032, Sarangi said. About 70% of the planned output is likely to be exported to key markets like Europe, Japan and South Korea. The remainder is expected to be consumed mainly by domestic fertilizer makers and oil refineries. 

Still, India is on course to become a major global producer and is building the required infrastructure for transporting the fuel, Sarangi added. Indian ports are in talks with Rotterdam and Antwerp ports for building green energy shipping corridors while Solar Energy Corp. of India, or Seci, is considering aggregating local demand from shipping companies for green methanol.

Separately, Sarangi said India plans to reduce the number of auctions for renewable projects this fiscal year as the government focuses on ensuring offtake deals for those already bid out. The government is reviewing nearly 44 gigawatts worth of planned projects that have yet to sign offtake agreements and advised authorities to shelve those that are no longer feasible, Bloomberg reported last week.