Huge subsidies by some developed nations on green hydrogen distorting trade - India minister

By Shivangi Acharya

New Delhi (Reuters) -India believes huge subsidies announced by some developed countries for their green hydrogen sector can distort trade and is in violation of World Trade Organization (WTO) norms, power minister R.K. Singh said on Thursday.

Speaking at a press conference, Singh said that the big subsidies is a challenge for the industry in India as it aims to emerge as 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 help cut its emissions, and enable it to reach its target of achieving 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 incentive plan to promote green hydrogen.

Speaking about Thursday's announcement, Singh said that the country 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 common sense to replace grey hydrogen with green hydrogen," he said.

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.

In comparison, grey hydrogen is made using fossil fuels, and is currently consumed by fertilizer, refining, and iron and steel units.

(Writing by Sakshi Dayal; editing by Sudipto Ganguly)