A Collaboration Formed Between IndianOil, L&T, and ReNew to Expand India’s Green Hydrogen Sector
Indian Oil Corporation Ltd. (IndianOil), ReNew Power, and Larsen & Toubro (L&T) signed a binding term sheet to form a joint venture (JV) company to develop India's nascent green hydrogen sector. The three-way partnership combines L&T's strong credentials in designing, executing, and delivering EPC projects, IndianOil's established expertise in petroleum refining and its presence across the energy spectrum, and ReNew's expertise in contributing and expanding efficiency-scale renewable energy solutions.
Furthermore, IndianOil and L&T have initialed a binding term sheet to form a joint venture (JV) with equity participation to manufacture and sell electrolyzers used to produce green hydrogen. India plans to quickly march ahead in its decarbonisation efforts, and production of Green Hydrogen is critical in this endeavour, said SN Subrahmanyan, CEO & MD, L&T, of the joint venture.
He added that the IndianOil-L&T-ReNew JV will concentrate on developing Green Hydrogen projects promptly to supply Green Hydrogen on an industrial scale. IndianOil-L&T JV will focus on producing and selling electrolyzers, filling another gap in the Green Hydrogen manufacturing chain. These JVs aim to aid the nation's Aatmanirbhar Bharat mission by rapidly constructing, expanding, and bringing in scale productivity gains to make green hydrogen a chemical feedstock and cost-effective energy carrier for various industries.
Shrikant Madhav Vaidya, Chairman of IndianOil, stated on the occasion, that as the Energy of India, we are committed to powering India's drive towards carbon neutrality by leveraging the power of green hydrogen. IndianOil is forming this alliance to realise India's green hydrogen ambitions, which align with the Hon’ble Prime Minister's vision of making India a green hydrogen generation and export hub. To begin, this collaboration will concentrate on green hydrogen projects at our Mathura and Panipat refineries. In addition, other green hydrogen projects in India will be evaluated. While the use of hydrogen in the transportation sector will take time, refineries will be the pivot around which India's green hydrogen revolution will materialise significantly.
ReNew looks forward to working with L&T and IndianOil to build India's green hydrogen business, aligned with the government's broader strategic climate goals for 2030 and 2070 set by Honorable Prime Minister Narendra Modi.
The timing for these proposed JVs is ideal because they will help support the Government of India's recently announced green hydrogen policy, which will accelerate India Inc.'s decarbonisation journey.
The planned JVs aim to help India transition from a grey hydrogen economy to a greener economy that manufactures hydrogen through electrolysis powered by renewable energy. The central government announced the Green Hydrogen policy in February, intending to increase the production of green hydrogen and green ammonia to help the country become a global hub for the element's environmentally friendly version. Green hydrogen can also help countries like India, with its ever-increasing oil and gas import bill, provide critical energy security by reducing overall reliance on imported fossil fuels.
Renewable electricity and electrolysis will produce nearly 80% of India's hydrogen by 2050. By 2030, green hydrogen could be the most cost-effective method of producing hydrogen. Potential cost reductions in crucial manufacturing technologies, as well as clean energy technologies such as solar PV and wind turbines, could have an impact on this. Currently, hydrogen is primarily used in the refining, steel, and fertiliser industries, which will be the JV's initial focus. The country's refining sector consumes approximately 2 MMT of grey hydrogen each year, with IndianOil accounting for a sizable portion of that output.
To aid in the carbon reduction of Indian industry, the new green hydrogen policy includes a 25-year waiver of interstate transmission charges and a banking provision of up to 30 days, greatly reducing the cost of green hydrogen. As a result, the replacement of grey hydrogen with green hydrogen will be pushed. The Ministry of Power has also created a permanent clearance portal for all clearances and priority access to green hydrogen projects.