MNRE launches scheme to incentivise production of green hydrogen

MNRE launches scheme to incentivise production of green hydrogen

Subject: Environment

Section: Species in news

Context:

• The Union Ministry of New and Renewable Energy (MNRE) has recently published guidelines and incentives to promote the procurement of green hydrogen as part of the National Green Hydrogen Mission (NGHM).

Strategic Interventions for Green Hydrogen Transition (SIGHT) programme:

• Under the NGHM, Rs 17,490 crore has been set aside for the SIGHT programme, to bolster domestic electrolyser manufacturing and green hydrogen production. These incentives are designed to facilitate cost reduction and rapid expansion.
  • Green hydrogen is essential for removing sulfur content in crude oil to produce petrol and diesel.
• Implementation:
  • Implemented under Mode-2B, a system adopted by the MNRE for the SIGHT scheme, this approach involves aggregating demand and soliciting bids for green hydrogen and its derivatives production and supply at the lowest cost through a competitive selection process.
• Programme execution:
  • Entrusted to agencies nominated by the Union Ministry of Petroleum and Natural Gas (MoPNG), primarily oil and gas companies, guided by the Centre for High Technology (CHT).
• Hindustan Petroleum Corporation is reportedly constructing a 370 tonnes per annum green hydrogen plant at its Visakhapatnam refinery.
• Who is eligible for incentives?
  • To qualify for incentives under the scheme, bidders must meet the criteria outlined in the ‘National Green Hydrogen Standard’ as notified by MNRE.
  • The scheme offers a direct incentive over three years from the beginning of production and supply, with rates of Rs 50 / kilogramme of green hydrogen in the first year, Rs 40 / kg in the second year and Rs 30 / kg during the third year.
  • The net worth of the bidder as on the last date of the previous financial year, as specified in the tender document should be equal to or greater than Rs 15 crore per thousand MT per annum of quoted production and supply capacity of green hydrogen.
• Monitoring committee:
  • A scheme monitoring committee, co-chaired by the secretary of MoPNG, secretary of the MNRE, mission director of the National Green Hydrogen Mission, and other experts, will periodically review the implementation status and performance of capacities awarded or established under the scheme.
  • The committee will also facilitate and recommend measures to address challenges.

Greenwashing concerns in Green Hydrogen production:

• Environmental organisations have cautioned about potential land-use and water conflicts arising from the significant land and water resources required for green hydrogen production.
  • Greenwashing is a deceptive practice where companies or even governments exaggerate their actions and their impact on mitigating climate change, often providing misleading information or making unverifiable claims. It is an attempt to capitalize on the growing demand for environmentally sound products.

Source: DTE