Green hydrogen, generated by splitting water with renewable electricity, is a carbon-emission-free fuel applicable in industries such as steel and oil refineries, as well as for automotive fuel, producing water upon combustion.
"Companies with backward integration are the only ones who will be able to provide the world with affordable green molecules. The cost of production of green hydrogen must decline from the current $3-5 per kilogramme (kg) towards USD 1/kg for widespread adoption," Adani said.
Adani said that green hydrogen has the potential to be a viable alternative to fossil fuels, especially considering the intermittent nature of renewable energy sources. He proposed that vertical integration, where a company oversees all upstream and downstream activities associated with its primary offering, could substantially lower green hydrogen production costs.
“For India, the equitable solution is not to replace one fossil fuel with another but to leapfrog to renewables and green hydrogen. The decrease in solar costs can be replicated with green hydrogen. This shift will help India achieve energy security and improve air quality in its cities," Adani said.
"It will also contribute to food security by eliminating the uncertainties of imported ammonia prices, a crucial component in fertilisers. Most importantly, it will offer the world a chance to avert the adverse impacts of climate change," he added.
The inaugural project by Adani New Industries Limited (ANIL) is set to produce 1 million metric tonnes per annum (MMTPA) of green hydrogen in Gujarat, with the initial phase expected to begin production by the fiscal year 2027. ANIL aims to increase its capacity to up to 3 MMTPA of green hydrogen within the next decade, requiring an investment of about USD 50 billion.