A race is on to steer the world’s shift to inexperienced hydrogen, a doubtlessly transformative clear gasoline whose real-world software stays nascent. The newest entrant is India, which this month accredited a $2.4bn subsidy package deal to show its corporations into main producers, customers and exporters of the fuel. Can it succeed?

India is chronically depending on imported power equivalent to Russian crude or Middle Eastern fuel, a monetary burden and strategic vulnerability for a rustic that may this yr overtake China because the world’s largest by inhabitants. It hopes renewables will change this, with India’s huge sun-soaked lands nicely suited to provide solar energy, for instance. The nation goals to construct 500 gigawatts of renewable electrical energy capability by 2030.

Indian corporations see hydrogen as the subsequent alternative. The Adani Group, the ports-to-coal group owned by Asia’s richest man Gautam Adani, together with France’s Total, plans to take a position $50bn to create “the world’s largest green hydrogen ecosystem” within the subsequent decade. Rival tycoon Mukesh Ambani’s oil-to-chemicals group Reliance Industries says it’ll swap from “grey” hydrogen produced with fossil fuels to the inexperienced model by 2025 as a part of a $75bn clean-energy overhaul.

State-owned power corporations from NTPC to Indian Oil Corporation additionally plan to introduce inexperienced hydrogen, with overseas ministry official Prabhat Kumar saying final yr that it may possibly develop into “our main source of energy”.

Much of the cash within the new programme will go in direction of subsidising manufacturing of the electrolysers, the machines that extract hydrogen from water. India goals to create manufacturing capability of 5mn metric tonnes per yr. It will even mandate utilization quotas for industries equivalent to fertilisers and oil refining to drum up demand, whereas creating coastal “hydrogen hubs” to facilitate exports.

It can be focusing squarely on inexperienced hydrogen versus the so-called “blue” hydrogen additionally promoted elsewhere, which is constituted of fossil fuels however the place carbon emissions are captured earlier than getting into the ambiance. Blue hydrogen is at present cheaper, however international demand for actually inexperienced hydrogen is predicted to develop, says Jagabanta Ningthoujam, a principal with think-tank RMI India.

But the truth up to now is that India’s embryonic hydrogen push lags behind its neighbour China and others. Analysts say Beijing is already beginning to dominate manufacturing of electrolysers, whereas the US’s tax credit for hydrogen far outstrip New Delhi’s subsidies.

India has different benefits, together with benefiting from a few of the world’s lowest renewable electrical energy costs, which is among the primary prices in hydrogen manufacturing. It additionally has a big home market. The most believable early use instances for inexperienced hydrogen in India embrace refining, as corporations equivalent to Reliance use the fuel to transform crude oil into gasoline merchandise. It can be became ammonia, an imported fertiliser.

Elsewhere, hydrogen use stays extra distant. Replacing coking coal within the steelmaking course of in India is among the most compelling use instances. But Abhishek Malhotra, an assistant professor on the Indian Institute of Technology Delhi, says he expects it is going to be a minimum of a decade till Indian steelmakers are prepared to begin utilizing inexperienced hydrogen.

The most bold goal is for India to develop into a number one hydrogen exporter. This is much less probably within the foreseeable future. But India may begin by promoting to neighbours equivalent to Bangladesh or Sri Lanka to fulfill their future inexperienced hydrogen wants. State corporations equivalent to Indian Oil Corporation are nicely established regionally, whereas newcomers equivalent to Adani are additionally investing. Reliance, too, is a large exporter of gasoline merchandise.

Critics of polluting conglomerates just like the Adani Group, for instance, accuse it of “greenwashing” for touting its renewable pledges whereas concurrently build up one of many world’s largest coal companies. They do, nonetheless, have the size, monetary clout and authorities backing to maneuver rapidly in strategic areas. And Vibhuti Garg, South Asia director on the Institute for Energy Economics and Financial Analysis, says these corporations want rising areas like inexperienced hydrogen to remain related.

Like others throughout the sector, Garg welcomes the federal government’s new insurance policies however stays level-headed about what India can anticipate to realize. “The outlay is not sufficient, but it’s sufficient enough to give investors confidence that there’s seriousness from the government,” she mentioned. “For a change, we’re not just thinking for the next four or five years.”

benjamin.parkin@ft.com