India To Explore Bilateral Agreements for Carbon Credits in Green Hydrogen Push

According to sources from the Indian government and industry, India is considering bilateral agreements with countries like Japan to enable them to utilize carbon credits linked to green hydrogen production in India. In return, these countries would provide investment and purchase deals. This move comes as part of India’s efforts to reduce carbon dioxide emissions and establish itself as a significant exporter in the green hydrogen sector. Earlier this year, India approved a 174.9 billion rupee ($2.13 billion) incentive plan to promote green hydrogen.

Companies such as Reliance Industries, Indian Oil, and Adani Enterprises in India have ambitious plans for green hydrogen, which is generated using renewable energy sources. By engaging in carbon credit trading, which involves projects aimed at reducing greenhouse gas emissions, India hopes to attract more investments and secure assured offtake for its green hydrogen production.

The discussions between India and Japan have resulted in a preliminary agreement to establish a joint crediting system for decarbonization under Article 6 of the Paris Agreement. This agreement allows for the sharing of carbon credits between countries and private companies. By participating in this system, buyers of green hydrogen can also receive carbon emissions credits associated with its production, which would otherwise be credited to the producers.

While Japan already has similar agreements with several countries, India is also exploring opportunities with other nations. The Indian ministries of environment, renewable energy, and external affairs have held discussions on the proposed carbon-trading agreements, along with industry representatives. The Solar Power Developers Association, an Indian industry body, has urged the government to leverage provisions of international treaties and commitments from developed nations to compete with the well-supported green hydrogen industry in the United States.

As India prepares to host an international summit on green hydrogen, it aims to harness the expertise and technology of developed nations in conjunction with its own potential for green development, thereby driving impactful climate action. However, official responses from the concerned ministries and the Japanese embassy in India are awaited.