European non-profit Hintco offers a solution to India’s billion-dollar green hydrogen industry puzzle

According to experts and industry representatives, the Indian green hydrogen industry has developed the required technology and secured the necessary investments, but the lack of gas purchase contracts is holding companies back from implementing their investment plans.

The problem comes from the difficulty of predicting how the cost of hydrogen will evolve, given that the technology is still in its infancy. Buyers are reluctant to sign long-term contracts, fearing that green hydrogen prices could fall below what they are willing to pay now. And sellers are reluctant to invest billions of dollars in production capacity without long-term offtake agreements.

Representatives from Hintco, a unit of the European nonprofit H2Global, met with representatives of the Indian government this week to discuss a possible solution to the conundrum. Hintco proposed the possibility of the Indian government and a foreign government working together to establish a supply-demand agreement for green hydrogen.

The role of the intermediary

Hintco has proposed acting as a middleman, signing long-term offtake agreements with Indian green hydrogen producers such as Reliance Industries and Adani Group, as well as short-term supply agreements with companies in markets such as Europe. Prices would be set through bilateral auctions, and the gap in profitability between the buyer and seller could be financed jointly by the governments involved.

“The idea is that the Indian government and another government could join forces and pool funds to bridge the cost gap that still exists,” said Timo Bollerhey, CEO of Hintco and co-founder of H2Global.

Hintco is already piloting such a project in Canada, where producers will supply green hydrogen to Germany. The feasibility gap is to be jointly funded by both governments. The Canadian government has committed C$300 million ( ₹1,830 crore) for the project. The bids for the auction are yet to be announced.

Officials at the Ministry of New and Renewable Energy and the Solar Energy Corporation of India (SECI) seemed open to further discussions on the matter, said Susana Moreira, executive director and co-chair of the board of the H2Global Foundation. However, the discussions were preliminary and no agreement had been reached, she said.

H2Global was launched by the German government in 2021 to encourage the development of a global green hydrogen industry. The country is heavily dependent on clean fuel imports to support its decarbonisation commitments.

Last month, Germany agreed to buy at least 259,000 tonnes of green ammonia between 2027 and 2033 from UAE-based Fertiglobe, the cheapest offer in the first tender launched by Hintco.

The Indian government has already facilitated a similar arrangement for green ammonia through SECI, which invited bids for production of green ammonia to be supplied to the fertiliser industry. Annual production capacity of up to 5.39 lakh metric tonnes (MT) will be subsidised through a scheme under the National Green Hydrogen Mission to bridge the cost gap between grey ammonia and green ammonia.

Green ammonia and green hydrogen are nomenclatures used to classify gases produced using renewable energy. Grey gases are produced using conventional energy sources that tend to be emission-intensive. Grey and green gases are chemically identical.

The government has stated that by 2030, at least 40% of the country’s hydrogen consumption should be met with green hydrogen and India will become a global hub for production, use and export of green hydrogen and its derivatives.

The Ministry of Renewable Energy is implementing the National Green Hydrogen Mission with a budget of ₹19,744 crores.