Interaction with German Delegation and Indian Green Hydrogen Industry

New Delhi, 18th June 2024: In 2023, with the aim to make a bold move towards India’s clean energy future, the Sustainable Projects Developers Association (SPDA) spearheaded a critical discussion on green hydrogen. The Association highlighted the importance of Article 6.2 of the Paris Agreement to key ministries like the Ministry of New and Renewable Energy (MNRE) and Ministry of External Affairs (MEA) which brought this topic into spotlight. This led to a series of activities, leading to an interaction between the German delegation and leading Indian green hydrogen industry representatives at MNRE. The discussion was aimed to explore collaboration and address key concerns related to green hydrogen procurement and utilization of Internationally Transferred Mitigation Outcomes or ITMOs.

The German delegation, with representative from Federal Ministry BMWK, KFW and a Consultant assisting the Ministry on Article 6 and Carbon Credits, expressed interest in procuring ITMOs generated within India. Their primary worries focused on avoiding double counting of emission reductions and the need for a standardised baseline for green hydrogen emissions to determine ITMO value per kilogram.

Indian industry including prominent figures from Acme, Avaada Group, Enfinity, Greenko, Gentari, NTPC, Renew, Hygenco, Sembcorp, Ocior, and many others, highlighted and explained the importance of off take agreements along with ITMOs. Long term off-take agreements are critical for supply at competent rates considering the price difference between Green ammonia and Grey Ammonia. The importance of viability gap funding to bridge the cost disparity between grey and green hydrogen solutions was vividly highlighted. Industry representatives also advocated for a more realistic ITMO price reflecting existing market prices and a linkage to established global carbon markets like the EU Emissions Trading System (EU ETS). Bankers and lenders expressed reservations about financing projects relying on low-priced ITMOs, further strengthening the industry’s support for the bundled offtake and ITMO model as the most viable and preferred pathway to drive the green hydrogen revolution forward.

This key interaction underscores the ongoing discussions and complexities involved in establishing a mutually beneficial partnership between India and Germany in the green hydrogen space. Both nations are committed to finding a solution that accelerates the global green energy transition while prioritising economic and environmental considerations. This collaborative effort will help in underscoring a shared vision and dedication to driving sustainable innovation on an international scale. The discussions will continue to take place in the near future.

“This interaction marks a significant step forward in our mission to lead the global green energy transition. By collaborating with international partners and addressing critical issues like emission reductions and market viability, we can pave the way for sustainable innovation and economic growth. At SPDA, our effort has always been that such schemes achieve their intended objectives for which they have been developed. We look forward to agreements between India and other countries under Article 6.2 of the Paris Agreement. Our commitment to a greener future is stronger than ever, and we are excited about the potential this partnership holds.” Says Mr. Shekhar Dutt, Director General, SPDA.