Special Report
Green hydrogen in Indian refineries – challenges &
opportunities
T
Highlights of COP26
he UN Climate Change Con-
ference (COP26), held in the
year 2021 in the Scottish city of
Glasgow, stressed the need for immedi-
ate cut in global greenhouse gas emission
to preserve a livable climate. This con-
ference was described as the last chance
to combat the climate crisis before it is
too late. In the COP26, the countries
reaffirmed the Paris Agreement goal
of limiting the increase in the global
average temperature to well below 2°C
above pre-industrial level and pursuing
efforts to limit it to 1.5°C. Countries
also stressed the urgency of action “in
this critical decade” when carbon diox-
ide emissions must be reduced by 45%
to reach net zero around mid-century.
The countries agreed to a provision
calling for a phase-down of coal-based
power and a phase-out of “inefficient”
fossil fuel (oil and gas) subsidies. The
Glasgow conference also reaffirmed the
pledge and urged developed countries
to fully deliver on the US$100-bn goal
urgently. It called for a doubling of finance
Meet 50% of India’s cumulative
to support developing countries in adapt-
ing to the impacts of climate change and
building resilience. The countries agreed
Reduce the emission intensity of
to strengthen a network – known as San-
tiago Network – that connects vulnera-
ble countries with providers of technical
Put forward and further propagate
assistance, knowledge and resources to
address climate risks.
During the COP26 conference and
outside too, there were many significant
deals and announcements. 137 countries
took a landmark step forward by com-
mitting to halt and reverse forest loss and
land degradation by 2030. 103 countries,
including 15 major emitters, signed up to
the Global Methane Pledge, which aims
to limit methane emission by 30% by
2030, compared to 2020 levels. Over 30
192
countries and six major vehicle manufac-
turers set out their determination for all
new car and van sales to be zero-emission
vehicles by 2040 globally and 2035 in
leading markets. Private financial institu-
tions and central banks announced moves
to realign trillions of dollars towards
achieving global net zero emissions.
Highlights of COP27
COP27 was held in Sharm
el-Sheikh, Egypt in Nov, 2022. In the
summit, the countries, after two weeks
of hard-fought negotiations, estab-
lished a ‘loss & damage fund’ to aid
countries facing severe damage from
climate change. The countries were
also expected to make Global Goal on
Adaptation which is the Paris Agree-
ment’s equivalent to the 1.5°C target
for mitigation. However, it fell short
of defining the goal and instead estab-
lished a framework to guide its formu-
lation, which will be considered and
adopted at COP28 this year in Dubai.
The developing countries expressed
dissatisfaction with the way finance
is being provided, including the large
percentage coming as loans, increasing
the debt burden in already debt-stressed
countries, and the lack of accountabi-
lity and transparency. This required re-
form in the climate finance.
Net Zero target by countries
There are several countries who
have either enacted law, made policy
documents, announced net zero targets
or are in proposal stage of doing so.
According to the ‘Net Zero Tracker’
of the Energy and Climate Intelligence
Unit (Feb 2023 status), eight countries
have self-declared net zero or carbon
neutrality and 21 countries have en-
acted law for net zero target. 82 coun-
tries have policy document in place,
SUDHIR K KASHYAP
E-mail: sudhirkkashyap@hpcl.in
S.N. SHESHACHALA
S. SRIRAM
Hindustan Petroleum Corp. Ltd. (HPCL)
22 countries have announced the net
zero target and 52 countries have pro-
posal for net zero target. These com-
mitments by countries are testimony
of the potential climate crisis envis-
aged by the countries in near future, if
unattended.
During COP26, Indian Prime Minis-
ter Narendra Modi committed India to a
net zero carbon emission target by 2070.
As part of the net zero strategy, he pre-
sented ‘panchamrit’ (five elixirs) or goals
that would help the country to achieve
its target for net zero emission by 2070.
Building upon Prime Minister’s pledges
at COP26, including the target of net-
zero emissions by 2070, India updated its
Nationally Determined Contribution
(NDC) in August 2022 as follows:
electric power installed capacity
from non-fossil sources by 2030;
GDP by 45% below 2005 levels by
2030; and
a healthy and sustainable way of
living based on the traditions and
values of conservation and moder-
ation, including through a mass
movement for LiFE – Lifestyle for
Environment – as a key to combat-
ing climate change.
India’s actions on Net Zero
In Jan. 2023, the Ministry of New
and Renewable Energy, Government
of India released a ‘National Green
Hydrogen Mission’ document. The objec-
Chemical Weekly February 28, 2023

tive of the Mission is to make India a
global hub for green hydrogen produc-
tion, usage and export. The Mission
is expected to lead to significant de-
carbonization of the economy, reduce
dependence on fossil fuel imports and
Higher production cost of green
enable India to assume technology and
market leadership in green hydrogen.
Among various other specific objec-
Possibility of non-realisation of
tives of the Mission, one objective is
to replace grey hydrogen with green
hydrogen in petroleum refining and
Round-the-clock (RTC) availability
fertilizer industries gradually.
Additional plot area requirement;
Hydrogen requirement in Indian
Constraints in utility sourcing;
petroleum industry
Idling of existing grey hydrogen asset;
At present, Indian petroleum refin-
Higher capital investment require-
eries have total 1.4-mtpa of hydrogen
production from the Steam Methane
Several water electrolyser technolo-
Reforming (SMR) process. This pro-
duction is expected to reach 2.6-mtpa
by 2030 owing to new facilities &
hydro-processing units being added.
In addition to SMR, Continuous Cata-
lytic Reformer (CCR) is another major
unit producing hydrogen as by-product.
In a few refineries, there are hydrogen
recovery units from hydrogen-rich fuel
gas and offgas generated from hydro-
processing units. These hydrogen re-
covery units are predominantly based
on Pressure Swing Adsorption (PSA).
Considering that hydrogen production
from CCR and recovery from PSA are
minor contributors to the overall hydro-
gen production, requirement of new
SMR in India is significant, i.e., 1.2-mtpa
from now to 2030. This is 86% of the
current SMR capacity installed.
SMR based on natural gas or naphtha
is major contributor to carbon dioxide
(CO2) in petroleum refining industry.
One kg of hydrogen production can
emit 8-10 kg of CO2. Hence, hydrogen
production from naphtha or natural gas
is first unit to be targeted for decarboni-
zation in refineries.
The technological options for de-
carbonization of hydrogen production
Chemical Weekly February 28, 2023
are: (a) blue hydrogen; and (b) green
hydrogen. For Indian petroleum refin-
eries, blue hydrogen has its own per-
ceived challenges. The challenges are
technologies for CO2 capture; space
constraints for retrofitting within exist-
ing SMR; high capital and operating
cost for CO2 capture section; CO2 pipe-
line & transportation’ availability of
dry well nearby refineries for sequestra-
tion or availability of wells in vicinity
for enhanced oil recovery (EOR) etc.
CO2 capture section has significantly
high power consumption. It is also be-
lieved that additional power require-
ment for CCUS section needs to be ful-
filled from green source; otherwise, it
may not truly reduce CO2 from overall
hydrogen production unit point of view.
Considering this, blue hydrogen lacks
the buzz in Indian refineries.
Green hydrogen production can
be done through installation of water
electrolysers. It is independent of exist-
ing SMR and has zero CO2 emissions.
Power for water electrolyser has to
be sourced from renewable power.
India is poised at advantageous position
with respect to solar energy due to its
geographical location. In near future,
renewable power is expected to be sig-
nificantly cheaper than power produced
from thermal power plants. Consider-
ing this, adoption of green hydrogen is
comparatively easier in Indian refineries
than blue hydrogen.
Biomass gasification, which is
another method of producing green
hydrogen, is not considered for bulk
hydrogen production due to several
challenges related to aggregation of
biomass, higher capex, maturity of
overall process, etc.
Transitioning of Indian refineries
from grey hydrogen to green hydrogen
provides several challenges as well as
some opportunities. These are dis-
cussed in next section.
Special Report
Challenges for green hydrogen in
Indian refineries
Introduction of green hydrogen in
Indian refineries has several challenges.
Some of these are:
hydrogen as compared to grey
hydrogen;
benefit of low renewable energy
cost in future;
of reliable power;
ment, as compared to SMR; and
gies still under development.
Higher production cost of green
hydrogen as compared to grey hydrogen
In India, at present, green hydrogen is
estimated to cost around US$4.0-6.5/kg,
while grey hydrogen costs around
US$1.6-2.2/kg. Considering 10% re-
placement of grey hydrogen with green
hydrogen, Indian refineries need to
incur additional cost of US$377-mn
annually at present hydrogen consump-
tion. This cost will further increase to
US$695-mn per annum in 2030 due to
increase in hydrogen consumption.
In green hydrogen production,
77-90% of the operating cost is attribut-
able to green power. The balance cost
pertains to other utilities such as feed
water, repair & maintenance, cyclical
cost of cell stack replacement, etc. Any
reduction in green hydrogen cost will
require reduction in green power cost;
other cost may not make significant impact.
Possibility of non-realszation of
benefit of low renewable energy cost
in future
For any new green hydrogen faci-
lity, agreement with renewable power
provider needs to be established for
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 Special Report
sourcing the required green power.
Most of the renewable power providers
require to tie-up with refineries (user)
for long-term duration for supplying
power, say 20-25 years. Usually, renew-
able power providers ask for fixing the
power tariff for the complete duration
of the contract. This is due to upfront
capital investment by renewable power
providers for installing the power infra-
structure for current requirement.
In future, renewable power cost is
expected to fall for new installations
due to economy of scale, better tech-
nologies, efficient supply chain and
experience gaining by the providers.
However, benefit of these measures
and consequent lower power tariff will
not be available for the current green
hydrogen facilities. Due to this reason,
green hydrogen cost for the current
installation is not expected to decrease
during its complete life cycle.
At present, renewable power is
estimated to cost ~ Rs. 4 – 5.5/kW. In
future, the same is estimated to drop
gradually, depending on maturity of the
sector.
Round-the-clock (RTC) availability of
reliable power
India has primarily four types of
renewable energy (RE) installed: solar,
wind, bio and hydro. As of Jan. 2022,
the total RE installation in India stands
at 152-GW, which is 38.6% of the over-
all installed power in India. The contri-
butions of solar, wind, bio and hydro
in the overall RE output are 26%, 33%,
7% & 34% respectively.
The Government of India is targeting
about 450-GW of RE capacity by 2030.
Out of this, 280-GW (~60%) is targeted
from solar and 120-GW (25%) from
wind. The balance 50-70 GW is expected
from hydropower and others. Solar and
wind are the two prominent RE being
considered in India for installation.
194
RE has certain challenges with
respect to its round-the-clock avail-
ability. Due to its variability, sustained
power supply to the industrial users is
challenge.
As per a study, India’s Capacity
Utilization Factor (CUF) of solar photo-
voltaic is anywhere between 15-23%
depending on average radiation and
ambient conditions of the location.
In most locations CUF is 18%. This
means that power actually generated
from the plant will be only 18% of the
installed plant capacity. One of the major
limiting factors for this is availability of
solar radiation only during daytime,
typically 11 am to 4 pm.
Similarly, wind power generation
is dependent on wind speeds, which is
dependent on climatic patterns. Normally,
monsoon period is considered as peak
period for wind power generation in
India. Seven States in the southern and
western parts of the country contribute
~95% of India’s wind energy output.
This concentration is primarily due to
their geographical locations, due to
which they experience a large number
of healthy wind days in a year. In 2020,
wind energy generation in India was
24% lower in June, July, August and
September, as compared to the same
months in 2019. The primary reason for
this reduction was lower wind speed in
the region.
To overcome the issue of vari-
ability of RE sources, energy storage
systems such as Pumped Hydro Stor-
age (PSP) system and Battery Energy
Storage (BES) system are being con-
sidered. PSP has multiple benefits such
as: higher ramping capability; capabi-
lity to smoothen the fluctuations in RE
generation; support for frequency and
voltage deviations in the grid; etc. BES
has several challenges such as shorter
lifespan; higher capital cost; require-
ment of expensive materials such as
lithium, nickel, cobalt, etc. Although
PSP system is being gradually adopted
in India, the requirement is huge. Cur-
rently, India has only ~3.3-GW of PSP
system under operation.
Therefore, due to variability of RE
resources and non-availability of ade-
quate energy storage system, avail-
ability of RTC power is a challenge for
sustained green hydrogen production at
industrial scale.
Additional plot area requirement
Over the years, most of the Indian
refineries have undergone several
expansions in terms of crude capacity,
fuel quality improvements, etc. Many
refineries have further capacity expan-
sion plans to meet the growing need of
fuels in the country. In addition, Indian
refineries are also eyeing diversifica-
tion of their business into petrochemi-
cals and specialty chemicals for margin
improvement & sustenance over a lon-
ger period of time. These projects have
significantly occupied the plot area
available within refinery.
Installation of water electrolyser at
mega-scale capacity requires signifi-
cantly higher plot area, which is a chal-
lenge for already plot-constrained refin-
eries. Considering 10% green hydrogen
out of total hydrogen requirement,
Indian refineries need to install ~1,100-MW
of water electrolyser plants at present,
which will further increase to 2,000
MW by 2030 due to increase in hydro-
gen consumption. A 100-MW of water
electrolyser plant is estimated to require
total ~20,000-m2 of plot area including
auxiliary facilities.
As hydrogen is colourless, odour-
less and highly flammable gas, instal-
lation of water electrolyser plant too
far from refineries and transportation
through pipeline may not be feasible
due to safety & economic reasons. It
is essential to locate the plant either
Chemical Weekly February 28, 2023

within the refinery or in its vicinity for
safe operation. Also, locating the plant
near to refinery will reduce hydrogen
compression & transportation costs and
the plant can be operated in sync with
hydroprocessing units’ requirement
with convenient co-ordinations among
the crew.
Therefore, plot availability for
Meet future hydrogen requirement
green hydrogen plant within refinery
may pose challenge to the refineries
and/or limit their other expansion or
value added project plans.
Constraints in utility sourcing
Water electrolysers require various
utilities such as feed water, cooling
water, instrument air, nitrogen, etc. As per
an estimate, a 100 MW-plant requires
For producing other chemicals from
20-28-m3/hr of feed water. Requirement
of other utilities depends on the water
electrolyser technology selected. Water
is a scarce utility and there are various
refineries in India that are operating
with very limited water availability.
There have been instances of partial
shutdown of a few facilities or on
the verge of it due to water scarcity.
Additional water requirement for green
hydrogen production will put additional
stress on the already water-constrained
refineries. Coastal refineries have
opportunity to consider a seawater
desalination plant for availing feed
water though at higher cost, resulting
in higher green hydrogen cost. Land-
locked refineries will find certain chal-
lenges with respect to water availability
for feeding the water electrolysers.
Idling of existing grey hydrogen asset
Indian refineries have already
invested in SMR for meeting their cur-
rent hydrogen requirement. Use of cer-
tain percentage of green hydrogen in
the overall hydrogen requirement will
leave the existing hydrogen asset to be
partially unutilized. To compensate for
the loss on return on investment for the
idle capacity of the asset, refiners will
Chemical Weekly February 28, 2023
need to scout for alternate mechanism
to utilize the idle asset. Considering
10% green hydrogen in the total hydro-
gen requirement, 140-ktpa of current
SMR capacity will be idle at present.
Refiners have the opportunity to
utilize the idle asset for following pur-
poses:
Several water electrolyser technologies
of the refinery for any expansion or
new hydro-processing unit in case
mandate for increasing the green
hydrogen percentage in the overall
hydrogen requirement does not
increase significantly in future. This
scenario is unlikely considering
the net zero target of the individual
refiners and overall country.
Solid Oxide and AEM are still under
syngas and diversify product port-
folio. The idle capacity of the SMR
can be utilised to produce of metha-
nol, ammonia etc. Refiners need
to make separate techno-economic
analysis for these products. Refiners
will require government assistance
in policy and viability gap funding
for making these projects attractive
for the refiners.
Higher capital investment requirement
as compared to SMR
For future capacity expansion
and hydro-processing units’ require-
ments, refiners will essentially need
to consider green hydrogen signifi-
cantly. Water electrolysers are sig-
nificantly costlier than SMR plants
for the same capacity. For 50-ktpa
of hydrogen production, SMR is
expected to cost US$110-mn, whereas
the same capacity of water electroly-
ser is expected to cost US$440-mn.
Although cost of water electrolysers
is expected to reduce significantly
in future due to economy of scale,
the same needs careful observation.
There are apprehension of increas-
ing commodity prices and higher
demand of the water electrolyser
Special Report
system due to significant energy
transition measures being considered
by various organisations.
Higher capital requirement for a
green hydrogen facility will put finan-
cial stress on the refiners unless support
from the government is availed.
still under development
There are four main types of water
electrolyser technologies available for
green hydrogen production: Alkaline;
Proton Exchange Membrane (PEM);
Solid Oxide; and Anion Exchange
Membrane (AEM). Out of these,
Alkaline and PEM are industrialiaed
and installed for commercial uses.
development and yet to be deployed at
industrial level.
While Alkaline is the oldest tech-
nology for hydrogen production, there
are several challenges with respect to
the technology such as higher plot area,
lower current density, lower operating
pressure, lower hydrogen purity, cor-
rosion, susceptibility to power fluc-
tuations, etc. However, this is the most
widely used technology at present and
has lower capital cost requirement as
compared to other technologies.
PEM is an emerging technology and
being considered at lower scale, i.e.,
2-10 MW. It has several benefits over
Alkaline technology in terms of plot
area, current density, operating pres-
sure, hydrogen purity, etc. However, it
is yet to be competitive with Alkaline
technology if compared over complete
life of the water electrolyser system.
Solid Oxide has high electric effi-
ciency, which means higher hydrogen
production for the same amount of
electricity consumed by other technolo-
gies. However, as Solid Oxide oper-
ates at very high temperature, material
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 Special Report
used as components are thermally chal-
lenged. Also, it has complex fabrication
and relatively higher cost.
AEM is claimed to be an alternative
to PEM technology with lower cost due
to usage of steel in place of titanium.
Solid Oxide and AEM are claimed
to be advanced technologies compared
to Alkaline and PEM, however, further
development and adoption of these
technologies at industrial scale is yet to
be done.
As of now, Indian refiners have limi-
ted choice of Alkaline and PEM tech-
nologies for green hydrogen produc-
tion at mega scale to meet their huge
requirements. These technologies are
having some deficiencies or require
higher capital cost that need to be over-
come with better and economical tech-
nologies.
Opportunities for green hydrogen in
Indian refineries
While there are several challenges
for consideration of green hydrogen
in Indian refineries, there are several
opportunities as well. Consideration of
green hydrogen will help in decarboni-
zation of the refining industry. Indian
refineries are already setting target
to become net zero much earlier than
the country’s net zero target of 2070.
Activities in the direction of net zero by
Indian refiners will help in abating the
climate risk for shareholders, without
disruption of returns in the long term. It
also leverages benefits of higher reputa-
tion for serving climate conscious cus-
tomers.
Green hydrogen adoption by Indian
refiners provides opportunity to diverse
the business towards green. The fuel
products can be labelled partly green
with usage of green hydrogen.
Green hydrogen is proposed to be
196
used in shipping and transportation to be overcome. Challenges such as
industries. It can also be used in manu- higher cost of green hydrogen, non-
facturing industries such as steel and realization of benefit of low RE cost in
chemicals, where it can be used as future, round-the-clock RE availability,
raw material and/or fuel. Induction of plot & utility constraints, idling of
green hydrogen by Indian refiners will existing hydrogen assets, higher
provide them first mover advantage, capex requirements, etc., need to be
and the experience gained will be of overcome to meet the target. Green
immense help in utilizing it for other hydrogen adoption by refineries also
industries. provide them opportunities such as
decarbonization of the sector, first
Conclusion mover advantage, and diversification
Indian refiners are already in the of the business.
process of net zero announcements and
framing strategies to achieve the same. For initial kick-off and catalysing
Green hydrogen is one of the most the adoption of green hydrogen by
important levers to achieve net zero refiners, government needs to help in
by the refineries. Adoption of green suitable policy structuring and bridging
hydrogen by Indian refiners has certain the financial viability gap for at least
challenges on the ground that need the short term.
ABOUT THE AUTHORS
Sudhir K Kashyap is the Chief Manager – Commissioning,
at HPCL, Visakhapatnam. He has more than 15 years of experi-
ence in refinery project execution involving conceptualisation and
strategy, feasibility studies, technology selection and evaluation,
basic engineering, project execution and commissioning of refinery
units. Kashyap holds a BS degree in Chemical Engineering from
BIT Sindri and a post-graduate degree in oil and gas management from UPES,
Dehradun.
S.N. Sheshachala is a General Manager, R&D, at HPCL’s
Green R&D Center in Bengaluru. He has more than 30 years of
experience in operations, economics and production planning
at HPCL’s Visakh Refinery, as well as corporate functions like
crude procurement, refinery-wide optimization, R&D, process
engineering, modelling and simulation. He earned a BS degree in
Chemical Engineering from Bengaluru University. Sheshachala holds patents
in the area of PSA and rotating packed beds for gas treating applications.
S. Sriram is Head – R&D, at HPCL’s Green R&D Center in
Bengaluru. He has more than 30 years of experience in refinery
projects, process safety and environment, operations and process
analysis and design divisions. Sriram holds a BS degree in Chemi-
cal Engineering from TKM College of Engineering, Kollam,
Kerala.
Chemical Weekly February 28, 2023