In a bid to enable India’s decarbonization push, Indian Oil Corporation Ltd., country’s refiner and fuel retailer, Larsen & Toubro (L&T), India’s engineering & construction conglomerate, and ReNew Power (“ReNew”), India’s renewable energy company, announced signing of binding term sheet for the formation of a Joint Venture (JV) company to develop the nascent green hydrogen sector in India.

Additionally, IndianOil and L&T have signed a binding term sheet to form a JV with equity participation to manufacture and sell Electrolyzers used in the production of Green Hydrogen.

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The planned JVs aim to enable India’s transition from a grey hydrogen economy to a greener economy that increasingly manufactures hydrogen via electrolysis powered by renewable energy.

The central government in February notified the Green Hydrogen policy aimed at boosting production of green hydrogen and green ammonia to help the nation become a global hub for the environmentally friendly version of the element.

Speaking about the joint venture, SN Subrahmanyan, CEO & MD, L&T, said, “India plans to rapidly march ahead in its decarbonization efforts and production of Green Hydrogen is key in this endeavour. The IndianOil-L&T-ReNew JV will focus on developing Green Hydrogen projects in a time-bound manner to supply Green Hydrogen at an industrial scale.”

 Commenting on the occasion, Shrikant Madhav Vaidya, Chairman, IndianOil, said, “To start with, this partnership will focus on green hydrogen projects at our Mathura and Panipat refineries. Alongside, other green hydrogen projects in India will also be evaluated. While the usage of hydrogen in the mobility sector will take its due time, however the refineries will be the pivot around which India’s green hydrogen revolution will materialize in a substantial way.”

Sumant Sinha, Chairman and CEO of ReNew Power said, “In alignment with the government’s broader strategic climate goals for 2030 and 2070 set by Prime Minister Narendra Modi, ReNew looks forward to working with L&T and IndianOil to build the green hydrogen business in India.” 

“The timing for these proposed JVs is excellent as they will help support Government of India’s recently announced green hydrogen policy to boost India Inc.’s decarbonization journey,” added Sinha.

For countries like India, with its ever-increasing oil and gas import bill, green hydrogen can also help provide crucial energy security by reducing the overall dependence on imported fossil fuels.

While nearly all hydrogen produced in India today is grey, it is estimated that demand for Hydrogen will be 12 MMT by 2030 and around 40% of the element produced in the country (around 5 MMT) will be green, as per the draft National Hydrogen Mission guidelines.

By 2050, nearly 80% of India’s hydrogen is projected to be ‘green’ – produced by renewable electricity and electrolysis. Green hydrogen may become the most competitive route for hydrogen production by around 2030.