Green Hydrogen on a Slow Track?

On the occasion of the 75th Independence Day celebration, Prime Minister Narendra Modi made a critical announcement to make “India Energy Independent Nation by 2047.” A nation that is on an energy transformation journey has integrated different energy sources, including green hydrogen.

India, the world’s third-largest economy in terms of energy needs, faces a 35% surge in energy demand by 2030. It requires non-traditional energy generation methods to achieve net-zero emissions by 2070.

The country has set ambitious targets to phase down fossil fuel consumption. The set targets are 50% of power generation from RE, 5 million tonnes of hydrogen, and 30% of EV penetration by 2030.

India constituted the National Green Hydrogen Mission in the year 2022 as an answer to energy security and emission reduction. The country, in the last budget (2023 February), has allocated Rs 197 billion for the mission. And it aims to be an exporting hub for green hydrogen.

However, the country’s green hydrogen production is lagging behind its target.

Challenges

The cost factor
Storage cost
Tax rebates and subsidies
Duty cuts
The gap in demand from the industry
Investment challenges
Technology maturity
R&D and innovation

The cost of green hydrogen is twice as high as gray hydrogen, with 30-50% going towards electrolyzer costs and the remaining towards renewable electricity.

To supply (round-the-clock) RTC energy, India must reduce the cost of energy storage. Thanks to indirect cost subsidies, batteries and other energy-storing devices could become less expensive. Customs duty exemptions or goods and services taxes are other possible forms of intervention.

A new report titled Green Hydrogen: Enabling Measures Roadmap for Adoption in India suggests ways to increase green hydrogen capacity in the country.

Authors Sachin Kotak, Partner, Bain & Company, and Jörgen Sandström, Head, Transforming Industrial Ecosystems, World Economic Forum, recommend a reduction in production costs to $2 per kg, with a direct subsidy of $0.50/kg for early adopters.

What will drive green hydrogen in the country?

Four types of users are likely to drive green hydrogen adoption: existing gray hydrogen users, industrial processors, transportation providers, and power and heating companies. Demand-side interventions should be tailored for each user, such as promoting blended hydrogen, which combines green and gray hydrogen with minimal impact on final product costs.

According to the authors, industrial clusters, consisting of co-located companies, can significantly reduce transportation and storage infrastructure costs, offer tech scale-up opportunities, share risk/resources, and optimize energy demand.

Responsible for 30% of global CO2 emissions, these clusters can accelerate green hydrogen adoption. The Transitioning Industrial Clusters Towards Net Zero initiative encourages participation. India could encourage cluster participation by allowing companies to bid for incentives and sharing success stories. The EU’s Hydrogen Backbone program could also benefit.

Four types of users are likely to drive green hydrogen adoption: existing gray hydrogen users, industrial processors, transportation providers, and power and heating companies. Demand-side interventions should be tailored for each user, such as promoting blended hydrogen, which combines green and grey hydrogen with minimal impact on final product costs.

India’s low-cost renewable energy, skilled workforce, and abundant land make it a potential hub for green hydrogen derivative exports. To capitalize, stakeholders should improve port infrastructure, allowing green hydrogen and ammonia manufacturers to establish storage bunkers near ports.

Subsidies:

More actions, such as increased PLI scheme subsidy support, are required to lower the cost of electrolyzers drastically and, consequently, green hydrogen.

India should encourage green hydrogen adoption and disincentivize carbon-intensive energy sources by diverting subsidies and funds towards green energy transition through a comprehensive carbon-tax regime.

Additionally, the country can increase direct subsidies for early adopters to drive down the cost of electrolyzers. During the first year of electrolyzer production, the Indian government provided $54/kW in subsidies through a production-linked incentive (PLI). The first tranche operated from July to October of 2023. Nevertheless, the cost of producing green hydrogen has only decreased by $0.1/kg thanks to this subsidy. To significantly lower the cost of electrolyzers and, consequently, green hydrogen, further interventions are required, such as increased subsidy support through the PLI scheme.

The National Green Hydrogen Mission:

The Indian government launched the National Green Hydrogen Mission in 2022 to address energy security and combat emissions in hard-to-abate sectors, but there is limited on-the-ground traction.

The 2022 national program aims to reduce dependence on imports of fossil fuel and feedstock and create export opportunities for Green Hydrogen and its derivatives to help the world fight climate.

It must be noted that as part of its Union Budget for 2023, India removed customs taxes on imported lithium-ion batteries for electric vehicles, potentially leading to a 20% price drop. Similarly, to promote the production of green hydrogen, India may exempt imported battery storage parts for RTC renewable energy.

In a nutshell:

India’s green hydrogen production costs are currently $4-5/kg, double the cost of gray hydrogen.
To reduce production to $2/kg, India could lower energy storage, provide renewable electricity, and implement indirect subsidies.
Increase direct subsidies for early adopters to reduce electrolyzer costs.
Minimize costs related to conversion, storage, and transport of green hydrogen and its derivatives by creating industrial clusters, promoting blended hydrogen, and capitalizing on India’s export potential.
Divert investments away from carbon-intensive alternatives and into greener pathways through a comprehensive carbon-tax regime.
Implementing easier measures can significantly impact India’s transition from an energy importer to an exporter, creating a win-win solution for energy security, economic growth, and environmental sustainability.

The participation of women in the country’s workforce saw a 30 percent growth and increased to 37 percent in FY2022-23, as against 23 percent in FY2017-18.

PM Narendra Modi’s women-focused schemes have helped in raising the participation of women in the workforce.

Union Education Minister Dharmendra Pradhan also asserted at a Rozgar Mela that women are more industrious than men. “There has been balanced growth in society as there has been a rise in women’s participation in the workforce.”

Data:

The data aligns with a recent report that highlights the upward trend in women’s labor force participation rate (LFPR) based on annual periodic labor force survey (PLFS) reports.

According to the most recent Annual PLFS Reports available, India’s estimated LFPR on usual status for women aged 15 and over was 30.0%, 32.5%, and 32.8% in 2019–20, 2020–21, and 2021–22, respectively.

Encouraging trends:

As per Statista, the female labor force participation rate in India increased by one percentage point (+4.35 percent) in 2022 in comparison to the previous year. In total, the rate amounted to 23.97 percent in 2022. Female labor force participation is the share of women over 15 who are economically active.

The Nari Shakti Vandan Adhiniyam, also known as the Women’s Reservation Bill 2023, passed by both Rajya Sabha and Lok Sabha, reserving one-third of seats in the Delhi assembly, State Legislatures, and Lok Sabha, will boost women’s participation in governance.

A Barclays report highlights the importance of increased female workforce participation and improved labor productivity through upskilling for India’s goal of an 8% GDP growth rate by 2030.

Over the past decade, the Indian IT sector has seen a significant rise in female employees, now comprising 36% of the overall workforce. This is in addition to the high rate of female workforce in nursing, social services, employment, education, and child care services.

According to market reports, TCS’s workforce comprises 36% women, with a 60% increase in senior women executives over five years, while Infosys’ workforce comprises 39.4% female employees. The share of women in the workforce for Wipro increased from 36.1% in fiscal 2022 to 36.4% in fiscal 2023, with a net addition of 13,793 employees.

Central initiatives:

The Central Initiatives have boosted women’s workforce participation, prioritizing leadership and policy-making roles. Upskilling and reskilling are crucial for women to adapt to evolving technologies, the minister said.

Additionally, creating jobs and enhancing employability are top priorities for the government. In light of this, the Indian government has implemented several initiatives aimed at creating jobs within the nation.

The Code on Social Security, 2020: allows women to work night shifts with proper safety precautions, increased paid maternity leave from 12 to 26 weeks, and mandatory crèche facilities in establishments with 50 or more employees.

The Code on Occupational Safety, Health, and Working Conditions (OSH), 2020: Women may work in aboveground mines, including opencast mines, between 7 p.m. and 6 a.m., and in belowground mines, between 6 a.m. and 7 p.m., in technical, supervisory, and managerial positions where constant presence may not be necessary.

The 2019 Code on Wages: Prohibits discrimination based on gender or sex in employment, including wages for similar work; prohibits discrimination unless prohibited by law; and requires employers to recruit employees for similar work.

Additionally, employers are not allowed to discriminate based on a worker’s sex when hiring someone for the same job or a similar job with the same terms of employment, except in situations in which it is illegal or restricted for women to be employed in such jobs at this time.

WriteCanvas PoV:

The GoI has taken significant initiatives to integrate women into the workforce. The codes have the right intent. But what is happening at ground level? Is there a system in place to monitor whether the codes are being implemented? To what extent and what is the impact?

No doubt, the 30 percent rise of women in the workforce is an encouraging number. Data, too is available. What is now required is a pause:

Pause to evaluate the strategies announced and their impact.

A pause to gauge whether the policy needs a tweak and what can be done

A pause to involve the impacted women and query them about what they want and whether their needs are included in the policy.

As a sustainability warrior, I see the historic Women’s Reservation Bill passed by the Indian Parliament on September 20, 2023, as a pave blocker for the much-discussed DEI (diversity, Equity and Inclusion).

It is especially significant because it starts from the policy framing house.

I stand by the voices that supported the Women’s Reservation Bill pending in the Parliament for the last 27 years. Introduced multiple times, the bill was first passed in the Rajya Sabha or the Upper House in 2010. It failed to be tabled in Lok Sabha and lapsed. The journey of this bill itself narrates the story of women empowerment in India.

Undoubtedly, we need women’s participation at all levels if we want to create a sustainable society. Women play a pivotal role in developing an ecosystem to protect Mother Nature.

Secondly, the rural-urban divide further fractures the participation of women in civil society. In India, the rural population is much larger than the urban population. Lack of economic opportunities force men to migrate to cities or metros. This lays bare the critical role women play in running the family, and front-ending initiatives for financial and food security, health and education, and water.

While government initiatives, self-help groups and groups are collectively working to uplift women, a few financial products are just not enough! The buck cannot stop here; more participation and inclusiveness are required. I am confident that ensuring 33% reservation through a bill at higher levels will further fuel the pace of women-centric initiatives that can have multilayer changes.

Climate mitigation initiatives mandate DEI. And because it is a compliance requirement (tick boxing), we have slowly started seeing changes with women getting prominence in roles, including at board levels or taking the lead in strategy, CSR or other initiatives in corporates. But the gaps are still visible. Somehow, I always felt it was not enough. How can we get more women to participate? I hope this bill also sets the required benchmarking for the corporates to integrate more women at all levels.

Prime Minister Narendra Modi in his address as the G20 President called upon global leaders to unite to tackle climate change, foster policies for climate action, and fast-track SDGs.

The ethos reflected in his blog sums up his G20 Presidency.

SDGs:
The Prime Minister wrote, “An interconnected world means our challenges across domains are interlinked. This is the midway year of the 2030 Agenda and many are noting with great concern that the progress on SDGs is off-track. The G20 2023 Action Plan on accelerating progress on SDGs will spearhead the future direction of the G20 towards implementing SDGs.”

Climate action:
Many countries of the Global South are at various stages of development and climate action must be a complementary pursuit. Ambitions for climate action must be matched with actions on climate finance and the transfer of technology.

“We believe there is a need to move away from a purely restrictive attitude of what should not be done, to a more constructive attitude focusing on what can be done to fight climate change,” the PM observed.

Citing an example from India he noted,” Living in harmony with nature has been a norm since ancient times. We have been contributing our share towards climate action even in modern times. For example, the Chennai HLPs for a Sustainable and Resilient Blue Economy is focused on keeping our oceans healthy.”

Democratizing climate action is the best way to fuel the momentum. Just as individuals make daily decisions based on their long-term health, they can make lifestyle decisions based on the impact on the planet’s long-term health. Just like Yoga became a global mass movement for wellness, we have also nudged the world with Lifestyles for Sustainable Environment (LiFE), the PM wrote.

Climate change and food security:
Due to the impact of climate change, ensuring food and nutritional security will be crucial. Millets, or Shree Anna, can help with this while also boosting climate-smart agriculture. In the International Year of Millets, we have taken millets to global palates. The Deccan High-Level Principles on Food Security and Nutrition are also helpful in this direction, he stated.

Green energy:
On green energy, the PM observed that a global ecosystem for clean and green hydrogen will emerge from `our presidency’, along with a Green Hydrogen Innovation Centre. “In 2015, we launched the International Solar Alliance. Now, through the Global Biofuels Alliance, we will support the world to enable energy transitions in tune with the benefits of a circular economy.”

Women empowerment:
That India is the fastest-growing large economy is no accident. Our simple, scalable, and sustainable solutions have empowered the vulnerable and the marginalized to lead our development story. From space to sports, economy to entrepreneurship, Indian women have taken the lead in various sectors. They have shifted the narrative from the development of women to women-led development. Our G20 Presidency is working on bridging the gender digital divide, reducing labor force participation gaps, and enabling a larger role for women in leadership and decision-making.

Technology:
Technology is transformative but it also needs to be made inclusive. In the past, the benefits of technological advancements have not benefited all sections of society equally. Over the last few years, India has shown how technology can be leveraged to narrow inequalities, rather than widen them.

For instance, the billions across the world that remain unbanked, or lack digital identities, can be financially included through digital public infrastructure (DPI). The solutions we have built using our DPI have now been recognized globally. Now, through the G20, we will help developing countries adapt, build, and scale DPI to unlock the power of inclusive growth.

Inclusion:
In December 2022, when we took over the Presidency from Indonesia, I had written that a mindset shift must be catalyzed by the G20. This was especially needed in the context of mainstreaming the marginalized aspirations of developing countries, the Global South, and Africa.

The Voice of Global South Summit, which witnessed participation from 125 countries, was one of the foremost initiatives under our Presidency. Gathering inputs and ideas from the Global South was an important exercise. Further, our Presidency has not only seen the largest-ever participation from African countries but has also pushed for the inclusion of the African Union as a permanent member of the G20.

Today, accomplishing things at scale is a quality that is associated with India. The G20 Presidency is no exception. It has become a people-driven movement. Over 200 meetings have been organized in 60 Indian cities across the length and breadth of our nation, hosting nearly 100,000 delegates from 125 countries by the end of our term. No Presidency has ever encompassed such a vast and diverse geographical expanse.

‘Vasudhaiva Kutumbakam’ or the world is one family, captures a deep philosophy. This all-embracing outlook encourages us to progress as one universal family, transcending borders, languages, and ideologies. During India’s G20 Presidency, this has translated into a call for human-centric progress. As One Earth, we are coming together to nurture our planet. As One Family, we support each other in the pursuit of growth. And we move together towards a shared future – One Future – which is an undeniable truth in these interconnected times.

Three important learnings:

First, a growing realization about a shift away from a GDP-centric view of the world to a human-centric view is needed.
Second, the world is recognizing the importance of resilience and reliability in global supply chains.
Third, there is a collective call for boosting multilateralism through the reform of global institutions. Our G20 Presidency has played the role of a catalyst in these shifts.

Our G20 Presidency strives to bridge divides, dismantle barriers, and sow seeds of collaboration that nourish a world where unity prevails over discord in which shared destiny eclipses isolation. As the G20 President, we had pledged to make the global table larger, ensuring that every voice is heard and every country contributes. I am positive that we have matched our pledge with actions and outcomes.

Tag: PM Narendra Modi