Decarbonization Avenue : Green hydrogen

In fact

India considering possible green hydrogen mandates

India recently announced plans to mandate green hydrogen for oil refineries and fertilizer plants - that’s interesting.

The country wants to become a leader in the hydrogen economy and seems to have figured the best way to kick off is to have some mandates for green hydrogen use.

Not a bad idea at all, we think - https://reut.rs/37F4VzI

But....India is considered a soft state, that is, a country where mandates and rules are not very strictly enforced. Soft states  (and especially large, democratic setups like India) usually will have a tough time in getting highly challenging ideas forced down stakeholders' throats. 

The country had done exceedingly well in solar and wind power. From practically zero, the country's solar power installed capacity stood at an impressive 41 GW end of Aug 2021, and its wind power sector is continuing its stable run as well, standing at about 40 GW by end of Aug 2021.

The county's performance in solar and wind power are truly praiseworthy, but this success could be more owing to market forces (read corporate profits) than strict enforcement of mandates alone. For instance, a wide range of corporate stakeholders had benefitted immensely with fast market adoption of solar power, which owes mainly to the falling costs of solar power - which really had little to do with Indian mandates and more with Chinese economies of scale.

What could thus do wonders for India in its aim to develop a hydrogen economy is to press the pedal on both levers - while on the one hand, have mandates and targets, on the other, create enough mechanisms for market demand so that businesses will invest, mandates or no mandates. 


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