Green Hydrogen – Significance & Challenges – Explained Pointwise

Green Hydrogen is being considered as one of the vital avenue for energy transition away from fossil fuels, for both the mobility (transportation) and industrial sectors. It is emerging as a pillar of India’s clean energy transition. Many breakthroughs have been made in the Green Hydrogen Technology, yet many challenges remain for scaling-up the utilization and adoption of Green Hydrogen technologies.

What is Green Hydrogen?

• Hydrogen is the lightest element found in nature. In standard conditions it exists as a gas of diatomic molecules (H₂). Hydrogen is the most abundant chemical substance in the universe, constituting roughly 75% of all normal matter. Stars including the Sun, are mainly composed of hydrogen. (though in the plasma state instead of gaseous state). The hydrogen gas can act as a useful fuel. Its combustion with oxygen releases a lot of energy and produces water as byproduct. Hence, it is more environment-friendly as it does not produce carbon-dioxide (produced by combustion of fossil fuels) and thus does not contribute to climate change.
• There are several ways to produce Hydrogen on industrial scale (large-scale). These include steam reforming of natural gas, oil reforming, or coal gasification. A small percentage is also produced using more energy-intensive methods such as the electrolysis of water. The hydrogen produced via these methods have been given various different names in order to distinguish them in terms of their carbon footprints.
• Grey Hydrogen is traditionally produced from methane (CH4), split with steam into carbon-dioxide (CO₂, Green House Gas) and hydrogen. Grey hydrogen is increasingly being produced from coal, with significantly higher CO₂ emissions per unit of hydrogen produced. It is produced at industrial scale today. It has no energy transition value.
• Blue hydrogen follows the same process as grey, with the additional technologies necessary to capture the CO₂ produced (when hydrogen is split from methane (or from coal)) and store it for long term. It is not possible to capture 100% of the CO₂ produced and not all means of storing it are equally effective in the long term.
• Green hydrogen is produced mainly through water (H₂O) electrolysis. Electrolysis uses electricity to split a compound into simpler substances. Here, renewable electricity splits water into hydrogen (H₂) and oxygen (O₂), with minimal emissions.
  2H₂O (Liquid) + Renewable Electricity→   2H₂ (Gas)  +   O₂ (Gas)

Source: WEF, IRENA

What are the various applications of green hydrogen across different sectors of the economy?

1. Fertilisers: Ammonia, made from hydrogen and nitrogen, is the base for nitrogen fertilisers such as urea. Most of this hydrogen now comes from natural gas. Green hydrogen can replace it and yield green ammonia with far lower emissions.
2. Petroleum refineries: Refineries use hydrogen to remove sulphur from petrol and diesel, so the fuels burn cleaner. They also use it to upgrade heavy oil into lighter fuels such as diesel, aviation turbine fuel and naphtha. These fuels serve road transport, aviation and industry. Most refinery hydrogen comes from fossil fuels, so a green supply can cut refining emissions.
3. Steel: Conventional steelmaking uses coal to strip oxygen from iron ore, releasing carbon dioxide. In direct reduced iron routes, green hydrogen can do this job instead. The reduction stage then releases water vapour in place of carbon dioxide.
4. City gas networks: Green hydrogen can be blended with natural gas in limited proportions, subject to safety standards and infrastructure compatibility. This allows existing gas networks to supply a hydrogen-natural gas blend to homes, businesses and industries. Such blending can reduce fossil fuel consumption and associated emissions while utilising existing distribution infrastructure.
5. Road and rail transport: Fuel-cell vehicles convert hydrogen into electricity on board, which drives electric motors. Their only emission at the point of use is water vapour. This suits buses, trucks and trains that need long range and quick refuelling.
6. Shipping: Green hydrogen can be converted into green ammonia and green methanol, which can fuel ships. These can replace conventional marine fuels on long voyages. Adoption depends on engine compatibility, safety requirements and port infrastructure.

What are the benefits of Green Hydrogen?

1. Net Zero Transition: The use of hydrogen in combustion has zero GHG emissions. Since, renewable energy is used in producing the Green Hydrogen, the entire chain (production to consumption) has very low GHG emissions (in contrast to Grey Hydrogen). Thus Green Hydrogen is vital to Net Zero transition. It can be utilized to decarbonize the heavy industry, long haul freight, shipping, and aviation sectors. Governments and industry have both acknowledged Green Hydrogen as an important pillar of a Net Zero economy.
2. Energy Security: Green hydrogen can enhance India’s energy security by reducing dependence on imported fossil fuels such as oil, natural gas and coal. It promotes diversification of the energy mix and enables efficient storage of surplus renewable energy. This can reduce vulnerability to global energy price fluctuations, strengthen strategic autonomy and ensure a reliable, sustainable energy supply.
3. Industrial Benefits: Green hydrogen promotes industrial decarbonisation by reducing dependence on fossil fuels in hard-to-abate sectors such as steel, cement, fertilisers and refineries. It can facilitate green steel production, provide clean feedstock for chemical industries and reduce the carbon footprint of industrial processes. This enhances industrial sustainability and competitiveness while supporting India’s transition towards a low-carbon economy.
4. Export potential: Green hydrogen offers India an opportunity to emerge as a major global exporter of clean energy. With abundant solar and wind energy resources, India can produce green hydrogen and its derivatives, such as green ammonia, for export to countries seeking to decarbonise their economies. This can generate foreign exchange, attract investments and strengthen India’s position in the global clean energy market.
5. Energy transition: Green hydrogen facilitates the transition from fossil fuels to clean and renewable energy sources. It helps reduce dependence on coal, oil and natural gas while enabling the integration and storage of renewable energy. It can also decarbonise energy-intensive industries, transportation and power generation, thereby promoting a sustainable, low-carbon economy.
6. Clean transportation: Green hydrogen can promote clean transportation by powering hydrogen fuel-cell vehicles, particularly heavy-duty trucks, buses, trains and ships. Unlike conventional fossil-fuel-based vehicles, hydrogen fuel-cell vehicles emit only water vapour at the point of use, thereby reducing air pollution and carbon emissions. For e.g. India has initiated trials of hydrogen-powered trains and buses to promote sustainable public transportation.
7. Energy Storage Solution: Hydrogen is emerging as one of the leading options for storing energy from renewables. Hydrogen-based fuels can potentially transport energy from renewables over long distances; from regions with abundant energy resources, to energy-intensive areas thousands of kilometers away;
8. Versatility: Green Hydrogen can be transformed into electricity or synthetic gas and used for commercial, industrial or mobility purposes.

Source: WEF, IRENA

What are the challenges in scaling up adoption of Green Hydrogen?

1. High Production Cost: The process of production of hydrogen using electrolysis consumes a lot of energy. The process uses high end-technological electrolysers. Electrolysers are devices that use electricity to split water into hydrogen and oxygen and are expensive. Hence, the cost of production of Green Hydrogen is high.
2. High Energy Consumption: Green hydrogen production through electrolysis is an energy-intensive process, requiring large amounts of electricity to split water into hydrogen and oxygen. Since renewable energy sources such as solar and wind are intermittent, ensuring a continuous and reliable electricity supply becomes challenging.
3. Technological dependence: India faces dependence on imported technologies, critical components and specialised materials required for manufacturing electrolysers. Limited domestic manufacturing capabilities increase production costs and create vulnerabilities in global supply chains.
4. Storage difficulties: Hydrogen has very low volumetric energy density, meaning it occupies a large volume even at relatively low weight. Therefore, it requires high-pressure compression, liquefaction at extremely low temperatures (around −253°C) or specialised storage materials. These processes are energy-intensive, expensive and require specialised infrastructure, making large-scale storage, transportation and distribution of green hydrogen challenging.
5. Inadequate infrastructure: Large-scale adoption of green hydrogen is constrained by the limited availability of dedicated infrastructure for its production, storage, transportation and distribution. The absence of hydrogen pipelines, specialised storage facilities, refuelling stations and port infrastructure increases logistical costs and limits its commercial utilisation.
6. Water availability: Green hydrogen production through electrolysis requires a continuous supply of purified water. Large-scale production may put additional pressure on freshwater resources, particularly in water-stressed regions of India.
7. Uncertain demand: High production costs and the availability of cheaper conventional alternatives, such as grey hydrogen and fossil fuels, discourage industries from switching to green hydrogen. Moreover, the absence of long-term purchase agreements and limited demand from end-user industries create uncertainty regarding future returns on investment, thereby discouraging large-scale production and private investment.
8. Safety Issues: Hydrogen is a highly volatile and flammable element, making it susceptible to fire and explosions in case of leakage. Its colourless and odourless nature makes leak detection difficult. Moreover, its storage under high pressure or at extremely low temperatures requires specialised infrastructure, advanced monitoring systems and stringent safety standards.
9. Skill shortages: The green hydrogen industry requires specialised skills in electrolysis, renewable energy systems, hydrogen storage, transportation and safety management. However, the shortage of trained professionals and technical expertise can hinder large-scale production, infrastructure development and commercial adoption.
10. Global competition: Several countries, including China, the USA, Germany, Japan and Australia, are making substantial investments in green hydrogen production, technology and infrastructure. This creates competition for investment, global markets, critical minerals and technological leadership. For e.g. China’s dominance in electrolyser manufacturing and renewable energy equipment could create competitive pressure on India’s emerging green hydrogen industry.

What steps have been taken to promote Green Hydrogen?

What more steps can be taken to scale-up production/adoption of Green Hydrogen?

1. Reducing Production Costs: The government should focus on reducing the cost of green hydrogen production by expanding affordable renewable energy capacity, promoting large-scale domestic manufacturing of electrolysers and achieving economies of scale. Providing targeted subsidies, tax incentives and low-interest loans can encourage private investment and make green hydrogen commercially competitive with conventional fossil fuel-based hydrogen.
2. Strengthening Domestic Manufacturing: India should promote indigenous manufacturing of electrolysers, fuel cells, storage systems and other critical components to reduce dependence on imported technologies and strengthen supply-chain resilience.
3. Infrastructure Development: Developing dedicated infrastructure for the production, storage, transportation and distribution of green hydrogen is essential for its large-scale adoption. This includes establishing hydrogen pipelines, storage facilities, refuelling stations and integrated hydrogen hubs near industrial clusters and ports.
4. Creating Assured Market Demand: The government should create a stable and predictable market for green hydrogen by gradually introducing mandatory consumption targets in hard-to-abate sectors such as steel, fertilisers, petroleum refining and cement.
5. Promoting Public-Private Partnerships: Encourage collaboration between government agencies, private companies, research institutions and startups to mobilise investment, promote technological innovation and accelerate large-scale green hydrogen projects. The government can provide financial incentives, policy support and risk-sharing mechanisms to attract private investment.
6. Ensuring Water and Resource Security: Green hydrogen production through electrolysis requires significant quantities of purified water and critical minerals for manufacturing electrolysers. Therefore, promoting the use of treated wastewater and desalinated seawater can reduce pressure on freshwater resources, particularly in water-stressed regions.
7. Skill Development and Capacity Building: Promote specialised training programmes in green hydrogen technologies. Collaboration between industries, technical institutions and universities can help develop a skilled workforce, strengthen research capabilities and address the shortage of trained professionals required for large-scale adoption of green hydrogen.
8. International Cooperation: Strengthen international partnerships for technology transfer, joint research and development, and investment in green hydrogen projects. India should collaborate with countries possessing advanced hydrogen technologies to develop efficient electrolysers, storage systems and transportation infrastructure.

Conclusion: Shift to Green Hydrogen based economy requires a mission mode approach to ensure quick transition without any disruption. The Green Hydrogen Mission is a foresighted initiative in this regard. The focus should be on effective implementation with the target oriented approach. The Green Hydrogen Mission may be single biggest initiative in transition of the economy to Net Zero.