Context: Prime Minister of India announced the launch of the National Hydrogen Mission (NHM) on India’s 75th Independence Day, saying that the aim is to make the country a global hub for the production and export of green hydrogen.
Background

• PM’s announcement takes forward the proposal, made in the 2021 Budget, for the launch of NHM that would enable the generation of hydrogen “from green power sources". 
• In April this year, speaking at the Hydrogen Round Table on ‘Hydrogen Economy: New Delhi Dialogue-2021’, the then Petroleum Minister had noted it was the goal of controlling emissions that makes hydrogen fuel so attractive to policy-makers.

About National Hydrogen Mission

• Its aim is to make the country a global hub for the production and export of green hydrogen – hydrogen as fuel obtained from the electrolysis of water, without any emission.
• The potential of hydrogen as as a game changer in the energy arena has long been known its versatility allows it to be utilised in transportation, power generation and industry.
• Increasing concerns around climate change are driving efforts by countries to quickly induct Hydrogen into their energy mix to achieve the target of becoming a low-carbon economy.

Importance

• “The enthusiasm about hydrogen has a simple reason: whether it’s used in a fuel cell or burned to create heat, wherever hydrogen replaces fossil fuels, it slows global warming.
• No matter how it is used, the by-product the burning of hydrogen produces is water.
• The added advantage of hydrogen is that, apart from transportation, it can be a “decarbonising agent" for industries like chemicals, iron, steel, fertiliser and refining, transport, heat and power.

While the details of the NHM are yet to emerge, India has taken several exploratory steps. 

• “We are working on a pilot project on Blue Hydrogen, Hydrogen CNG (H-CNG) and Green Hydrogen… we are blending hydrogen with compressed natural gas for use as transportation fuel as well as an industrial input to refineries".

HOW DOES HYDROGEN FUEL HELP?

• Hydrogen is the fuel of stars and packs awesome energy. It is also the most abundant element in the universe. 
• But on Earth it is found in complex molecules such as water or hydrocarbons. 
• Hydrogen is not a source of energy, like fossil fuels or renewable sources like sunlight and air, but an energy carrier, which means it has to be produced, or extracted, and stored before it can be used.

According to World Energy Council (WEC), 

• “combusting one kilo of hydrogen releases three times more energy than a kilo of gasoline and produces only water".
• Then, there are hydrogen fuel cells, which is “an electrochemical cell that converts the chemical energy of hydrogen and oxygen into electricity", whose waste product, again, is water. 
• “Fuel cells can produce electricity continuously for as long as hydrogen and oxygen are supplied

HOW IS HYDROGEN PRODUCED? WHAT IS GREY, BLUE, GREEN OF HYDROGEN?
There are several ways of extracting hydrogen and, depending on the method, the hydrogen produced is classified as ‘grey’, ‘blue’, or ‘green’ hydrogen.
Grey Hydrogen

• Constitutes India’s bulk Production.
• Extracted from hydrocarbons (fossil fuels, natural gas).
• By product: CO2

Blue Hydrogen

• Sourced from fossil fuels.
• By product: CO, CO2
• By products are Captured and Stored, so better than gey hydrogen.

Green Hydrogen

• Generated from renewable energy (like Solar, Wind).
• Electricity splits water into hydrogen and oxygen.
• By Products : Water, Water Vapor

Importance and Govt initiatives in this direction

• Green hydrogen is the biggest goal and will help provide a quantum jump to India. India’s strategy will be to leverage scale for its ambitious green hydrogen plan in the likes of its renewable energy programme, leading the country to run the world’s largest clean energy programme.
• The government plans to implement the Green Hydrogen Consumption Obligation (GHCO) in fertilizer production and petroleum refining, similar to what was done with renewable purchase obligations (RPO). 
• RPOs require electricity distribution companies to buy a fixed amount of renewable energy to cut reliance on fossil fuels. India’s total hydrogen demand is expected to touch 11.7 million tonnes (mt) by 2029-30 from the current 6.7 mt.
• This comes at a time when India’s domestic oil and gas production has been faltering. The domestic crude and oil and gas production fell by 5.22% and 8.06% respectively during April 2020 to March 2021, compared with the corresponding period in the previous financial year.
• With the current cost of green hydrogen produced by electrolysis estimated at around Rs 350 per kg, the plan is to more than halve it to Rs 160 per kg by 2029-30. 
• The government also aims to extend the production-linked incentive (PLI) scheme for manufacturing electrolyzers to produce green hydrogen.

Challenges

• Cost of developing technologies to produce: One of the biggest challenges faced by the industry for using hydrogen commercially is the economic sustainability of extracting green or blue hydrogen.
• Requires mammoth investment in R&D: Need to support various projects in academic institutions, research and development organisations and industry for development of hydrogen.
• Capacity building: Technology used in production and use of hydrogen like Carbon Capture and Storage (CCS) and hydrogen fuel cell technology are at nascent stage and are expensive. Therefore, opportunity for creation of demand among its vast population and propel India to become the most favored nation by exporting hydrogen to its neighbors and beyond is still under consideration.

Road Ahead

• Recent government commitments for large-scale production and consumption of hydrogen are rapidly establishing deep foundations for a hydrogen economy", but notes that, “the single greatest challenge in realising the hydrogen and fuel cell potential is predictable and consistent energy policy".