IOCL, L&T and ReNew to set-up new JV for green hydrogen business

Indian Oil Corporation, Larsen & Toubro and renewable energy company ReNew Power (ReNew) have signed binding term sheet for the formation of a new joint venture company to develop green hydrogen in India.

Additionally, Indian Oil and L&T have signed a binding term sheet to form a JV with equity participation to manufacture and sell electrolysers used in the production of green hydrogen.

SN Subrahmanyan, CEO and MD, Larsen & Toubro said, “The Indian Oil-L&T-ReNew JV will focus on developing green hydrogen projects in a time-bound manner to supply green hydrogen at an industrial scale. While L&T will bring its strong EPC credentials to the table, IOC with extensive capabilities in chemical processes and refining has established deep R&D capabilities in many aspects of green hydrogen value chain and ReNew Power has in a short time established itself as a leading renewable energy supplier and has built itself a very strong reputation. Addressing another gap in the green hydrogen manufacturing chain, Indian Oil-L&T JV will focus on production and sale of Electrolyser.”

Shrikant M Vaidya, Chairman, Indian Oil, added, “To start with, this partnership will focus on green hydrogen projects at our Mathura and Panipat refineries. Alongside, other green hydrogen projects in India will also be evaluated. While the usage of hydrogen in the mobility sector will take its due time however, the refineries will be the pivot around which India’s green hydrogen revolution will materialise in a substantial way.”

Sumant Sinha, chairman and CEO, ReNew Power explained, “In alignment with the government’s broader strategic climate goals for 2030 and 2070 set by Prime Minister Narendra Modi, ReNew looks forward to working with L&T and Indian Oil to build the green hydrogen business in India. ReNew, as a leader in intelligent energy solutions and with advanced capability across renewable energy technologies, is well poised to complement the capabilities of our partners.”

While nearly all hydrogen produced in India today is grey, it is estimated that demand for Hydrogen will be 12 MMT by 2030 and around 40 percent of the element produced in the country (around 5 MMT) will be green, as per the draft National Hydrogen Mission guidelines.

By 2050, nearly 80 percent of India’s hydrogen is projected to be ‘green’ – produced by renewable electricity and electrolysis. Green hydrogen may become the most competitive route for hydrogen production by around 2030. This may be driven by potential cost declines in key production technologies and in clean energy technologies such as solar PV and wind turbines.

At present, hydrogen is mainly used in the refining, steel and fertiliser sectors, which will be the focus of the JVs’ initial efforts. The country’s refining sector consumes approximately 2 MMT of grey hydrogen every year, with Indian Oil owning one of the largest shares of its refining output.