Blue hydrogen will be cost-competitive with diesel as a transport fuel by 2030 in India, while green hydrogen will reach the same milestone before 2050, according to an analysis by thinktank the International Council on Clean Transportation (ICCT).

The analysis found that pump prices for green and blue hydrogen will fall to under $5/kg by 2050, with production costs accounting for around $3/kg.

Separate analysis by China’s state-controlled Sinopec, among others, has found that it is around this price level that the fuels become competitive with diesel for refuelling commercial vehicles.

Hydrogen use in Indian transport is currently limited to bus pilots in a handful of major cities that run on hythane—compressed natural gas blended with 18pc hydrogen.

$3/kg – Projected cost of blue hydrogen production in 2030

But following the launch of the government’s National Hydrogen Mission, urban transportation could be one of the first sectors to transition to the fuel, according to the ICCT report, titled Hydrogen Fuel for Transport in India.

“While commercialisation and market development have not progressed rapidly, recent advancements in hydrogen technology and political support for developing more robust and independent energy systems in India have enhanced the feasibility of greater hydrogen use in transportation,” it says.

Cost components

The four key cost components of the pump price for hydrogen fuel are production cost, transport cost, fuelling cost and potential tariffs along the supply chain.

While the production costs for blue hydrogen remain fairly steady, at around $3/kg between 2030 and 2050 under the ICCT’s modelling, green hydrogen production costs fall sharply from just under $6/kg in 2030 to just over $3/kg in 2050.

The study estimated New Delhi, Ahmedabad and Mumbai will each have ten hydrogen fuelling stations by 2030 and 50 by 2050.

The transport costs estimated by the study include the cost of building dedicated hydrogen pipelines to transport hydrogen from production plants to retail fuelling stations. A hydrogen pipeline network would consist of transmission pipelines that transport hydrogen from production facilities to each city centre and high-pressure distribution pipelines.

On refuelling costs, the study took into account total capital costs of construction as well as operational and maintenance costs over a ten-year lifespan.

“Recent advancements in hydrogen technology... have enhanced the feasibility of greater hydrogen use in transportation” ICCT

Tariffs likely to be levied on hydrogen include a pipeline transport tax and a 12.5pc central excise tariff.

India’s National Hydrogen Mission sets a goal of 5mn t/yr of green hydrogen production by 2030.

An energy conservation bill, currently moving through the legislative process, contains measures that, if passed, will help boost the sector, including mandating hydrogen use targets in certain sectors.

A separate analysis by Swiss bank Credit Suisse found that hydrogen vehicles could reach diesel cost parity as soon as 2028 in China, where the sector is more developed and the country’s hydrogen strategy aims to have 50,000 fuel-cell electric vehicles in use by 2025.

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Author: Tom Young