Shri. D.L.N. Sastri, Director (Oil, Refining & Marketing) FIPI, welcomed all the esteemed speakers and distinguished participants from Oil & Gas industry at the webinar on 'Green Hydrogen'.
Mr. Kapil Bansal, Ms. Neetu Vinayek, Mr. Bhavesh Thakkar & Mr. Emil Thomas from EY gave over view of international and domestic landscape in the area of green hydrogen. They also shared their views on Oil & Gas industry’s significant role in energy transition, increased investments in clean energy & how Green Hydrogen is emerging as an alternative to fossil fuel.
Shri. Vivekanand, Director (Finance, Taxations & Legal) FIPI, in his vote of thanks recapitulated the key message from presentation that major countries and companies are targeting Net Zero target by 2050 and actions they are taking in this regard.
The Federation of Indian Petroleum Industry (FIPI) in association with EY organized a webinar on ‘Green Hydrogen’ on 28th June 2023. The webinar was conducted in order to shed a light on the approaches that have been adopted by companies globally, along with key opportunities and challenges in enabling India’s hydrogen transition. The webinar witnessed an overwhelming response with participation of around 400 professionals working across the oil and gas value chain.
Mr. DLN Sastri, Director (Oil Refining & Marketing), FIPI began the session with the opening remarks. He spoke that with need to combat climate change, the oil and gas industry today, is transitioning towards more clean energy initiatives and opportunities. He mentioned that while oil and gas companies are deploying into key renewable energy options such as offshore wind, solar, etc; they are, at the same time also investing into key capital-intensive clean energy technologies – such as carbon capture, utilisation and storage and green hydrogen. He talked about the importance of National Green Hydrogen Mission announced by Honorable Prime Minister, Shri Narendra Modi, in making India a hub for production and export of green hydrogen. He said such government initiatives will help India achieve net-zero carbon neutrality by 2070 and also ensure energy security.
Mr. Kapil Bansal, Partner EY talked about the growing energy demand that needs to be catered while keeping carbon goals in mind. He gave the references of major oil companies such as Shell, bp, Chevron, ExxonMobil, and their net zero targets to achieve carbon neutrality. He emphasized the role of green hydrogen and ammonia for application in fertilizer & refineries, for decarbonizing Hard-to-abate sectors and heavy-duty mobility & shipping, in addition to utilizing it as a power storage. He also talked about the stakeholder initiatives undertaken by EY in helping its clients build hydrogen ecosystem.
He then talked about the initiatives taken by oil and gas sector globally in harnessing green hydrogen as a low carbon fuel. Many countries like US and Australia, in order to achieve their net zero targets have allocated subsidies to support green technologies like the US Inflation Act (USD 369 bn) and AU$ 300 mn. Further he mentioned that global oil and gas companies’ investments in clean energy businesses have increased tenfold over the last seven years and is expected to rise even more in the next decade. For instance, bp plans its average annual investments in bio-energy, EV charging, renewables, and hydrogen by 2030 (US$7b–US$9b) compared with 2022 (US$4.9b). In order to achieve net zero target by 2050, Petronas has formed a separate venture to focus on renewable energy and green hydrogen initiatives. However, he mentioned that these global oil and gas players will have to focus simultaneously on optimizing operations as well as managing cost and sustainability to achieve their end goal.
Mr. Emil Thomas, Senior Manager, EY gave Indian perspective on how government policy initiatives are shaping the hydrogen ecosystem in India. He mentioned that the government outlay of Rs. 19,744 cr is critical in achieving the 5 MMTPA target of green hydrogen production by 2030. Achieving of the target, will result in multiple benefits viz, 50 MMT reduction in greenhouse emissions and ~Rs. 1 lakh cr reduction in fossil fuel imports. He mentioned that while India’s hydrogen demand as a feedstock is driven by mature H2 markets such as refineries & fertilizer, the end-use applications are also expected to increase in the form of Power generation (ammonia co-firing, fuel cells), Fuel cell electric vehicles, industrial heating etc. Lastly, he said that with an interplay of electrolyser efficiency improvements, longer equipment life, attaining economies of scale and acquiring lower cost of financing, can result in achieving the green hydrogen production cost to USD 1.7 – USD 2/kg from the existing level of USD 4.2/kg.
Ms. Neetu Vinayek, Partner at EY talked about the direct tax and policy interventions that would help in transforming India into a hydrogen hub. She mentioned that the concessional tax rate of 17.16% is available for new manufacturing / producing company which commence activity before 31 March 2024. Further she added that to encourage R&D in the country capital, revenue expenditure incurred may be considered for weighted deduction for tax purposes. Mr. Bhavesh Thakkar, Partner at EY talked about the state level incentives such as stamp duty exemption on capital transaction, interest subsidy etc. Further he mentioned a series of considerations for government in order to promote deployment of green hydrogen in the country viz, revamp of the present duty structure, concessional duty structure for import of capital goods required for setting-up the production unit, clarity on the GST rates applicable on production of green hydrogen, SEZ Act (DESH bill) to be extended for setting-up a production unit as a SEZ, introducing carbon credit scheme in India etc.
The presentations were followed by conducting a Q&A session wherein various queries posted by our participants were well addressed by our panellists.
Lastly, Mr. Vivekanand, Director (Finance, Taxation & Legal), FIPI in his vote of thanks, emphasized the key message from presentation that major countries and companies are targeting net zero target by 2050 and actions they are taking in this regard. He complimented the EY team for giving insight on fiscal and non-fiscal incentives granted as well as required to promote green hydrogen in India. He thanked the EY and FIPI team who worked hard to make this event successful. He also thanked the participants from energy industry for their active and interactive participation during the event.