Green hydrogen, derived from renewable sources like solar and wind, can significantly cut
global carbon emissions, potentially achieving 10% of the mid-century reduction targets.
Unlike grey hydrogen, which is produced from fossil fuels, green hydrogen can replace coal
and natural gas in industries such as shipping and steelmaking.
India, aiming for net-zero emissions by 2070, sees hydrogen as crucial for its clean energy
transition. However, establishing a hydrogen pipeline network for large-scale transport and
use poses significant financial challenges. Innovative financing models are essential to bridge
this gap.
A dedicated hydrogen pipeline network is necessary for efficient long-range transport, linking
production hubs to consumption centers. Building this network requires substantial upfront
investments, and traditional lenders may be hesitant due to the emerging nature of hydrogen
infrastructure and uncertain market demand.
Several innovative financing models can address these challenges. Public-Private
Partnerships (PPPs) can leverage government and private sector expertise and funds.
Revenue-sharing models allow private companies to build and operate pipelines, recovering
costs through user fees from hydrogen producers and consumers. Climate funds, such as
green bonds and dedicated investment funds, can also support these projects, attracting
investors interested in sustainable energy.
International collaboration can further aid India’s hydrogen ambitions. Partnerships with
countries leading the hydrogen transition can provide valuable knowledge, technology, and
co-financing opportunities. Learning from global experiences, such as the EU’s hydrogen
strategy, can be particularly beneficial.
De-risking measures can boost investor confidence. Establishing clear standards and
regulations, aggregating demand through long-term offtake agreements, and implementing
risk-sharing mechanisms like government guarantees can make hydrogen projects more
attractive to investors.
Building a robust hydrogen pipeline network is essential for India’s clean energy future. By
embracing innovative financing models, international collaboration, and de-risking strategies,
India can unlock hydrogen’s potential, fostering sustainable economic growth and job
creation.
