The India Hydrogen Alliance (IH2A) has stressing that Hydrogen Purchase Obligations (HPOs) are crucial to avoid putting at risk more than USD 80 billion in hydrogen-related public investment commitments. 

To bridge the gap between current production and national goals, IH2A has proposed a comprehensive framework of HPOs, aimed at replacing the current industrial offtake of grey hydrogen with green hydrogen, particularly within India’s refinery and ammonia sectors. These sectors encompass 47 existing and proposed plants that could significantly drive demand if supported by HPOs. The proposal outlines the creation of a Contract-for-Difference (CfD) framework similar to Japan’s model, which would provide financial support for transitioning to green hydrogen. 

“Once HPOs are introduced, India can look at the Japan Contract-for-Difference (CfD) framework to part-fund the green hydrogen transition by refinery and ammonia sector by 2030, and reduce carbon emissions in these two hard-to-abate sectors,” IH2A Secretariat Amrit Singh Deo said.

IH2A estimates a USD two billion budget allocation for the CfD model would enable all current refinery and fertiliser plants to meet a 10 percent HPO target, while new plants could reach 100% green hydrogen offtake by 2030, thus accelerating the nation’s decarbonisation efforts.