National Logistics Policy must include components on Hydrogen Storage & Transportation

 Gopal Krishna Agarwal, National Spokesperson – Economic Affairs, BJP believes that for India to become a 5 trillion economy in the coming years, it must find out new areas where it can catalyze economic growth. This is where green hydrogen can be important. Not only will a green hydrogen economy establish India’s importance in international leadership, it can also propel its economic growth.

Honorable Prime Minister NarendraModi has taken it upon himself to be a global leader in climate change challenges and is committed to the cause of renewable energy. This shows that there is willpower at the top leadership level for achieving these goals. Because of this commitment, after COP21, India has taken some bold steps in meeting emission norms. Consequently, after the Paris Climate Change Summit, India’s emissions have reduced by 28% since the levels in 2005, according to a report. We are almost on the verge of achieving the target of reducing emissions by 30% by 2030.

A major noteworthy measure taken by India is to set up the International Solar Alliance, with its head office in India, along with France. Another initiative taken by India to meet its green energy commitments is to obtain 80-85% of its electricity demand through renewable sources by 2050. India is also committed to the United Nations Sustainable Development Goals, incorporating all the 17 goals into the government policies.

Recently India has achieved target of 40% power generation capacity based on non-fossil sources.

Green hydrogen economy: The baton of a zero-carbon future

However, coal’s share in India’s energy mix constitutes over 44% while oil contributes to around 25%. The share of bioenergy and CNG is 21% & 5.8% respectively while that of nuclear & solar energy is critically low. Coal being a fossil fuel is a recipe for a climate hazard while the oil prices in the country are skyrocketing and imported oil is inflating India’s import bill. As India treads farther on the road to industrialization, its per capita energy consumption will grow from 30% currently, which is lower than the world average consumption, to almost doublein 2040. This is attributed to the fact that India has now displaced US to become the second most attractive destination for setting up manufacturing industries globally.

Though there are certain concerns about large hydro projects, India has a huge potential in it. Similarly, small hydro project can be important initiatives although they are nearly non-existent at present. But at the same time, India now has the world's fifth-largest solar power and fourth-largest wind energy capacities. This energy can be used to produce green hydrogen, a zero carbon emission fuel, and it will be a big game changer for the whole energy sector.

Hydrogen is a big source of energy, and though there are several challenges at present, and India is not a big player in this field, the direction in which private investments and the government is moving can bring big rewards for the country. It will help in energy security, decarbonisation, and to meet the target for reduced carbon emissions. Moving into the sector of hydrogen energy, which can become the most important component on the renewable energy side, there is an estimation that an investment of more than US$ 500 billion will be required in the near future. Many private companies like Reliance, Adani Power, Tata Power and Mittal Power and even some of the government companies in the energies, like NTPC, have set up big targets and there is an expected investment commitment of US$ 316 billion by 2030. If the government policies are supportive, and the challenges pertaining to the implementation of hydrogen energy are met, India can become a big player in this field.

Creating a conducive ecosystem for a green hydrogen economy; setting up of National Hydrogen Mission.

At present, cost is a big challenge for hydrogen technology. There is also a big competition on the solar energy side from China. A big challenge that can be found from the private sector is high interest costs. Though the government is continuously reducing interest costs, more sources of energy and funding are needed for this to happen. If new and improved technology is brought along with innovation and research, the production challenges can be met.

Recognizing the challenges and finding solutions is also something the government is working on. It is now coming up with new industrial and logistics policies to address concerns like transportation and availability of raw material among others. There is also a focus on building manufacturing bases in India. The government has, in the AtmaNirbhar Bharat also committed 90,000 crore rupees on the upgradation of power sector and tackle the issues of grid reforms, improvement in transmission and improvement in the discoms. The private players as well as the government agree that hydrogen and silicon are novel fields that can generate a lot of wealth for the country. Around 1500 crore rupees has been committed by the government for setting up this National Hydrogen Mission. Various policies are being implemented and roadmaps are being set up. Ultimately when the objective is clear and commitment of the highest level for clean and green energy is there, India will surely be able to achieve its targets.

The Government is coming out with new National Logistics Policy; it must address issues pertaining to integrated logistics hubs, hydrogen storage, transportation, warehousing, and ports. Similarly, internalizing the environmental cost on the corporate sector’s balance sheet, will help in proper project evaluation for the government and also bring better presentation. So, the recording of these environmental initiatives in the balance sheet and internalizing cost is another important issue where more research and development can take place. Finance accounting professionals as from Institute of Chartered Accountants of India (ICAI) can take this initiative. More sources of low cost funding are must to propel a robust hydrogen economy in the country and the government is taking steps towards that.