Green hydrogen cost falls to USD 4.4-4.5 per kg in oil co tenders

New Delhi, Sep 25 (PTI) The price of green hydrogen - the zero-emission fuel produced from splitting water - has fallen by more than USD 1 per kg in the tenders floated by state-owned oil companies like Indian Oil Corporation (IOC), Oil Minister Hardeep Singh Puri said on Thursday.

From USD 5.5 per kg, the price of green hydrogen - which can be used to replace coal or natural gas in steel, cement, and chemical production as well as fossil fuel-derived grey hydrogen in refineries and ammonia production - has come down to USD 4.4-4.5 per kg in the latest tenders.

In a tender floated by IOC for a 10,000 tonnes per annum green hydrogen production at the firm's Panipat refinery in Haryana, Larsen & Toubro offered a tax-inclusive price of USD 4.5 for 25 years, he said at the World Hydrogen India conference of S&P Global here.

Subsequent tenders for 5,000 tonnes floated by Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) saw Ocior Energy bid USD 4.39 per kg, he said, hoping the prices will fall further in newer tenders in the near future.

Green hydrogen is made by splitting water into hydrogen and oxygen using electricity generated from renewable sources. It has virtually no greenhouse gas emissions, making it an environmentally friendly alternative to fossil fuels. It can be used in industries such as steel, cement and chemicals, transportation and power generation.

India is aiming to become a major player in the global hydrogen market, backed by new investments and policy support. It is targeting production of 5 million tonnes per annum of green hydrogen by 2030.

"Green hydrogen is the fuel of the future. It will succeed where there is local demand, local production and local consumption, and few places in the world are as uniquely qualified as India to make that happen," he said.

The Green Hydrogen Mission was announced in 2021 with the ambition of making India a global leader in green hydrogen, with the goal of capturing 10 per cent of the global market by 2030, he said.

Talking about the policy push, he said, "The transition is both urgent and necessary. Dedicated green hydrogen policies have already been notified by state governments, and with India's spirit of cooperative federalism, the active participation of states remains vital. This vision is reinforced by global trends, with S&P Global Commodity Insights projecting hydrogen demand to grow at 3.5 per cent annually, reaching 220 million metric tons per year by 2050, of which 60 per cent will come from low-carbon sources." "India's roadmap is clear, to scale up production, drive costs down, enable exports, and emerge as a trusted global hub for green hydrogen. Hydrogen is not just the fuel of the future, but a pillar of energy security, economic competitiveness, and environmental stewardship." PTI ANZ MR