Top India Oil Refiner Follows Billionaires in Green Hydrogen Bet

(Bloomberg) -- Indian Oil Corp. Ltd., the country’s biggest oil refiner and a large user of hydrogen, will partner with top renewable energy producer ReNew Power and Larsen & Toubro Ltd. to produce green hydrogen that’s fast gaining momentum in the South Asian nation’s clean push.

The three companies have signed a binding term sheet to jointly develop green hydrogen projects, while the state-run refiner and the engineering major will form a separate partnership for making electrolyzers for green hydrogen, according to a joint statement from the three firms. The partnership will focus on green hydrogen projects at Indian Oil’s Mathura and Panipat refineries in northern India.

Green hydrogen, produced from water and green electricity and considered the cleanest form of fuel, is a potential path to decarbonize heavy industries, such as steel, cement and oil refineries. India, the world’s third-biggest emitter of greenhouse gases, plans to take the lead and has won support from its richest billionaires, Mukesh Ambani and Gautam Adani. India aims to produce 5 million tons of green hydrogen by 2030, when its demand for hydrogen is estimated at 12 million tons.

India’s refineries consume about two million tons of hydrogen annually, much of it by the Indian Oil group, which holds a third of the nation’s oil processing capacity. Indian Oil is already working toward producing 70,000 tons a year of green hydrogen by 2030, which will account for 10% of its overall consumption by that time. Refineries typically use hydrogen for the removal of sulfur from fuels like diesel.

ReNew Power, backed by investors such as Goldman Sachs Group Inc., and Larsen & Toubro, announced a joint venture in December to develop and operate green hydrogen projects in India, which could attract more than $60 billion in investment. India plans as much as 15 gigawatts of electrolyzer-making capacity and is considering production-linked incentives to encourage local manufacturing to produce some of the world’s cheapest green hydrogen.

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