Budgetary allocation of Rs 300 crores provision for H2 infra for commercial vehicles not enough say industry experts
As against a total commitment of Rs 19,700 crore for the National Green Hydrogen Mission the Rs 300 crore sanctioned in the Union Budget is far too minuscule as the squeeze in fund availability will directly delay infrastructure creation for transportation and storage for the fuel and further limit OEMs bandwidth to launch H2 models before 2030, said industry analyst tracking the sector.
Rating agency CRISIL as part of its assessment of the Union Budget said the 300 crores allocated in the current budget is “low” and such funds will be unable to fully kickstart the infrastructure for transportation and storage of green hydrogen and limit OEMs’ ability to introduce hydrogen specific models post 2030 only, the report has indicated.
Rajendra Petkar, Chief Technology Officer and President of ARAI at a recent event in Pune had said that creating the necessary infrastructure for hydrogen cannot be the task of a single OEM, but as it involves substantial investments from government and industry participants “a collaborative approach is required” Petkar said.
“Typically, if the government puts in more money for infrastructure development and scales up the infrastructure it sends a strong signal to the automakers to start their production for that specific fuel. This we have seen in CNG where the entire fleet of three-wheelers passenger vehicles and even commercial vehicles which have shifted to a greener fuel, once the availability has improved” said a CTO of another leading automaker.
CRISIL in its assessment says that till such time ” Most of the hydrogen produced is expected to replace grey hydrogen which will find its application in fertilizers and agriculture sector”.
Another side of the same development is the government has increased capital allocation for the Ministry of New and Renewable Energy to Rs 47,591 crore in fiscal 2024 from Rs 34,490 crore this fiscal 2023.
Analysts add that such higher allocation will speed up the transition to clean fuels, but “will such funds get diverted for green hydrogen” is not clear at the moment.
Based on such scenario ratings agency CRISIL has revised its forecast for domestic hydrogen consumption which is expected to touch 5MT by 2030 “Our estimates suggest only 1.0-1.5 MT of green hydrogen will be domestically consumed by 2030, and the remaining will be exported” the report further adds.