Indian parliament upper house clears new law that will help develop hydrogen, non fossil fuels

The Rajya Sabha, the Upper House of India's Parliament, on December 14 passed the Energy Conservation (Amendment) Bill, 2022, into law. It only awaits the formalty of the President of India's signature.

Though the law is titled Energy Conservation, the amendments all push the country in the direction of non-fossil fuel economy. The essential features of the amended legislation is the ushering in of a domestic carbon market in India, sweeping-in more buildings into the ambit of a green buildings code and mandating major consumers to consume non-fossil fuels. It is in the last part that green hydrogen comes. 

According to the University of Oxford, the nation is the world’s second largest producer and consumer of nitrogen-based fertiliser, a category that includes ammonia made from H2, gobbling up around 17 million tonnes per year, writes Rachael Parkes, in HydrogenInsight, a magazine powered by Recharge. And this figure is only set to rise, Parkes says and quotes the Institute for Energy Economics and Financial Analysis (IEEFA) estimates that the Indian fertiliser sector's demand for H2 (either fossil-based or renewable) will reach 7.5 million tonnes per year by 2050.  Today, Indian-made fertiliser is produced almost exclusively from grey hydrogen derived from unabated fossil gas, and is heavily subsidised by the government. In fact, for the past three years in a row, New Delhi has subsidised fertiliser production to the tune of 1.05trn rupees ($12.7bn), a figure that is set to rise in line with skyrocketing international gas prices. 

Even a mandate for just 1% of nitrogen-based fertiliser production to use a feedstock of renewable hydrogen would generate demand for around 170,000 tons of green ammonia per year, based on today’s production figures. 

Power Minister R K Singh has repeatedly said, including in the Parliament recently, that the government would bring in a mandate upon large consumers--fertilizers and refineries to start with--an obligation to purchase a prescribed percentage of green hydrogen for their operations.