Page 161 - CW E-Magazine (10-6-2025)

Special Report

chemicals sector presents a timely in niche areas can sustain a small price share of hydrogen captively, while
opportunity. premium. surplus is sold to nearby chemical units.
Some volume is also earmarked for
There’s also strong sustainability Debunking the lack-of-scale myth local transport pilots, such as hydro-
pressure on chemical companies. While Green hydrogen policy has often gen-powered buses. (The cluster is not
most efforts have focused on renewable overlooked the chemical sector, wrongly yet operational).
electricity or biomass boilers, green perceived as too small to matter. But
hydrogen offers a relatively low-hanging this is misleading. The largest opera- The Pune model also demonstrates
fruit – and the price gap has never been tional non-China green hydrogen plant innovative integration: part of its hydro-
narrower. today is at BASF in Germany – a chemi- gen is produced from bio-ethanol via a
cal site. India’s biggest so far, GAIL’s catalytic process that co-generates ethyl
The discussion refl ected growing 10-MW unit at Vijapur, is also a perfect acetate as a green co-product. These
optimism among hydrogen producers. match for chemical-sector scale, niche processes are limited by co-pro-
The chemical sector, once overlooked especially in cluster confi gurations. duct demand, but valuable where viable.
due to smaller project sizes, is now
seen as a promising and commercially These are admittedly modest com- The roundtable also fl agged other
realistic end-use. pared to gigawatt-scale announcements creative cost-reduction ideas. Most
like Neom, Saudi Arabia (>2-GW) – green hydrogen plants currently vent
Who will pay for green hydrogen? but those remain on paper. The real the oxygen by-product, since bott-
Of course, chemical producers are message from current users is clear: ling it isn’t viable given the low cost
always under pricing pressure. It is not let’s focus on deployable, working pro- of oxygen produced by Atmospheric
reasonable to expect them to switch jects. While the megaprojects will need Separation Units (ASUs). However, if
from grey to green if the business case time to fructify, in the interim there’s a local chemical users can consume this
cannot be made – especially in diffi cult place for realistic, commercially viable oxygen stream, it could meaningfully
times like today’s market environment. projects of modest scale. reduce LCOH by valorising the entire
output. One such example is the new
The question is: Who pays for The sector is fi nally moving from HPCL green hydrogen project, which
“green” ultimately? hype to pragmatic deployment, and plans to explore this route.
that’s exactly what India’s green hydro-
Specialty chemicals products may gen ecosystem needs right now. Choosing the right sites for green
use only ~5% hydrogen by weight, so hydrogen pilot projects
the cost impact on consumer products Unlocking economies of scale via A key takeaway from the discussion
is minimal. Yet, this benefi t isn’t industrial clusters was the importance of site selection.
being passed upstream to hydrogen users. Pooling hydrogen demand across Green hydrogen is most competitive
Voluntary ‘Green Hydrogen’ certifi ca- multiple consumers in industrial clusters in plant expansions, where new hydrogen
tion or procurement pressure on B2C can signifi cantly improve commercial supply is needed and alternatives can
multinationals chasing 2030 net-zero viability. Centralized plants benefi t be evaluated on a level playing fi eld.
targets could help bridge this gap. If from economies of scale, lower LCOH,
B2C companies legitimately care about and streamlined regulatory approvals. However, location matters. In coastal
their net zero goals it is up to the chemi- For risk-averse chemical users, a Build- regions like Gujarat, by-product
cal sector to make th+em pay (a tiny bit!) Own-Operate (BOO) model – where hydrogen from chlor-alkali plants is
for green! Solvay is already setting up the technology vendor bears the perfor- abundant and cheap (~Rs. 200/kg).
a plant for green hydrogen peroxide mance risk – is often more acceptable. Within a 150-200 km radius of such
(Rosignano, Italy; commissioning sites, green H will struggle to compete
2
expected 2026) and the BASF’s green Another promising model involves on price. Inland users, who often pay
hydrogen unit is already functional at third-party industrial parks provid- more for trucked-in hydrogen, offer a
Ludwigshafen, Germany (commis- ing green hydrogen as a pay-per-use more realistic target.
sioned March 2025). utility, much like steam, electricity, or
water. The Pune Hydrogen Cluster, pre- Crucially, hydrogen prices vary
These projects give us optimism sented during the roundtable, is a live widely by source and scale, and pilot
that with some effort green products example: an anchor tenant uses a large project viability should not be judged

Chemical Weekly June 10, 2025 161

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