Green hydrogen subsidies by developed nations distort trade: India minister
THE huge subsidies announced by some developed countries for their green hydrogen sectors can distort trade and are in violation of World Trade Organization (WTO) norms, India’s power minister RK Singh said on Thursday (Jan 5).
He told reporters that the big subsidies were a challenge for the industry in India, as the country aimed to become the most cost-competitive source of green hydrogen in the world.
As one of the world’s biggest greenhouse-gas emitters, India is betting on green hydrogen to cut its emissions, and so enable it to reach its target of net-zero carbon emissions by 2070.
“The only challenge I face, which our industry faces, is huge subsidies announced by some developed countries on manufacturing green hydrogen,” Singh said.
“We believe that to be a trade-distorting step, which I think is actionable under the WTO rules.”
His comments came a day after the Indian government approved a 174.9 billion rupee (S$2.8 billion) incentive plan to promote green hydrogen.
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However, he said that India would not impose any green-hydrogen consumption obligations on the industry.
“The obligation was necessary when grey hydrogen was cheaper than green hydrogen. Today, because of the huge rise in petroleum prices and natural-gas prices, grey hydrogen is more expensive than green hydrogen, so now it makes sense to replace grey hydrogen with green hydrogen.”
Hydrogen is made by splitting water through the process of electrolysis, and can be used as a fuel. When electrolysers, the devices that facilitate this process, are powered using renewable energy, the end product is called green hydrogen.
Grey hydrogen, on the other hand, is made using fossil fuels, and consumed by fertiliser, refining, and iron and steel units. REUTERS
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