Green hydrogen pilot guidelines in transport revealed

Green hydrogen is known to have immense potential to reduce carbon emissions and decarbonize several industrial sectors. Transportation is one such sector where Green Hydrogen can replace fossil fuels. Under the Green Hydrogen Mission, the Ministry of New & Renewable Energy (MNRE) has proposed to implement pilot projects for replacing fossil fuels and fossil fuel-based feedstock with Green hydrogen and its derivatives. The central government, in this respect, has recently issued scheme guidelines to support such pilot projects. 

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India has set a target to attain energy independence by 2047 and a net zero by 2070. It is believed that green hydrogen will play a major role in accomplishing these goals.

Green Hydrogen is produced by the process of electrolysis, where water is split into hydrogen and oxygen using electricity generated from renewable sources like solar, wind, or hydropower. This process results in a clean and emission-free fuel that has immense potential to replace fossil fuels and reduce carbon emissions. It may also be produced from biomass. The process involves the gasification of biomass to produce hydrogen. Since both of these production techniques are sustainable and clean, Green Hydrogen presents an attractive option for transition to a low-carbon future.

The green hydrogen may therefore be utilized to reduce carbon emissions and decarbonize several industrial sectors including transportation, shipping, and steel. 

To assess the potential for the use of Green Hydrogen in the transportation sector, the National Green Hydrogen Mission supports the setting up of pilot projects in the transportation sector. The Ministry of New & Renewable Energy (MNRE) has proposed to implement such pilot projects, intending to replace fossil fuels and fossil fuel-based feedstock with Green hydrogen. In light of this, the central government has recently come out with guidelines for undertaking pilot projects for using green hydrogen in the transport sector.

Here we briefly discuss the scheme guidelines.

Scheme Guidelines for Pilot Projects on the Use of Green Hydrogen in the Transport Sector

Under the National Green Hydrogen Mission, the Ministry of New and Renewable Energy (MNRE) has released the “Scheme Guidelines for Implementation of Pilot Projects for Use of Green Hydrogen in the Transport Sector.” The scheme’s aims:

• To support the deployment of Green Hydrogen as fuel in buses and trucks, in a phased manner on a pilot basis.
• To validate the technical feasibility and performance of Green Hydrogen vehicles under real-world operational conditions 
• To evaluate the economic viability of hydrogen-based vehicles 
• To assess the effectiveness of hydrogen refuelling station
• To evaluate the performance of hydrogen-based vehicles and identify the areas for improvement 
• To demonstrate safe and secure operations of hydrogen-based vehicles and hydrogen refuelling stations.

The Scheme will be implemented with a total budgetary outlay of Rs. 496 Crores till the financial year 2025-26. (MoRTH may decide the allocation of the budget among various types of pilot projects, envisaged to be implemented under the scheme.)

The operational issues and discrepancies in in terms of current technology readiness, regulations, implementation methodologies, infrastructure and supply chains, are to be identified with the aid of these pilot projects. These are expected to yield important inputs for the commercialization and expansion of green hydrogen in the transport sector in the future.

Key features of the Scheme include-

• The Scheme aims to leverage existing resources and infrastructure available with MoRTH and its agencies for transport, storage and use of Green hydrogen and its derivatives in the transport sector.
• Ministry of Road, Transport and Highways (MoRTH) shall finalise a Scheme Implementing Agency (SIA). MoRTH nominated SIA along with the executing agency will identify the routes covering different terrains and climatic conditions across India and MoRTH shall finalize the same.
• The SIA will issue a Call for Proposals and select an Executing Agency (EA) through a transparent process.
• Projects that intend to develop Pilot Scale/ Demonstration systems for replication of technology will be supported.
• MNRE will issue administrative sanctions for the projects under the Scheme based on recommendations of the Project Appraisal Committee.
• The Scheme Implementing Agency (SIA) will share knowledge and outcomes of the pilot projects through the Project Completion Report, monitoring reports, workshops, and publications to disseminate findings, best practices, and lessons learnt from the pilot.
• The scheme will provide financial assistance to ‘close the viability gap’ arising due to the relatively higher capital cost of hydrogen-powered vehicles and the infrastructure for hydrogen refuelling stations, in the initial years. 
• Expenses on account of hydrogen production, land, etc. will not be funded under this scheme.
• Financial support for projects will be evaluated and granted taking into consideration the specific needs, merits, and feasibility of each project.

In its ambit, the scheme covers-

• Development/selection/validation of technologies for the use of Green Hydrogen as fuel in the following categories of vehicles-
• Bus with Fuel-Cell-based propulsion technology

• Bus with Internal Combustion Engine based propulsion technology 
• Truck with Fuel-cell-based propulsion technology 
• Truck with Internal Combustion Engine based propulsion technology
• Four-wheeler vehicles with Fuel Cell/internal Combustion engine based propulsion technology

• Development/selection/validation of technologies for supporting infrastructure like Hydrogen refuelling stations will be carried out.

According to the scheme, MoRTH nominated SIA along with the executing agency to identify the routes covering different terrains and climatic conditions across India and MoRTH shall finalize the same. 

SIA will issue a Call for Proposals for the projects. The proposals have to be submitted straight to SIA. Each submitted project should contain the name of the Executing Agency (EA). In the case of a consortium, a lead agency should be identified, which shall function as Executing Agency.

As per the scheme, CPSUs, State-PSUs, Private sector, State corporations, and JVs/Partnerships of such entities, would be among the eligible entities to submit proposals. It is further mentioned that,

• Necessary capabilities need to exist with the EAS for taking forward the completed pilot projects towards commercialization.
• Proposals submitted by EAS should include details covering vehicle type, vehicle technology, planning of mileage coverage, etc. in the prescribed format.
• A Project Appraisal Committee will review the proposals based on the criteria outlined in the Call for Proposals.
• Following the receipt of administrative sanction from MNRE, the letter of Award shall be issued to the EA by the SIA.
• The SIA shall make all necessary efforts to complete the pilot project, in all aspects, within 24 months from the date of awarding the project.
• The EA shall be solely responsible for obtaining the safety, environmental and other approvals as required. It shall get necessary testing and certification compliance from concerned agencies.

Furthermore, the scheme will support any other innovative applications of hydrogen for lowering carbon emissions in the transport sector, like the blending of methanol/ethanol based on green hydrogen and other synthetic fuels produced from green hydrogen in automobile fuels.

Looking ahead

The use of Green Hydrogen through the proposed pilot projects would lead to the development of required infrastructure like re-fueling facilities and distribution infrastructure in the transportation sector. This will eventually result in the establishment of a Green Hydrogen ecosystem in the sector. 

The feasibility of using green hydrogen-powered transportation is expected to improve further with future economies of scale and rapid technological developments in the field of hydrogen-powered vehicles. Due to the declining costs of electrolyzers and renewable energy sources, Green hydrogen-powered vehicles are expected to become cost-competitive and more affordable in the coming years.