Indian Oil draws up green hydrogen fuel retail network plan

Sahney said that apart from captive consumption at its refineries, where Indian Oil would look at replacing grey hydrogen with green hydrogen, the company aims to eventually cater to the mobility demand in the country, thereby retailing green hydrogen fuel cells. 

He believes that due to critical safety requirements for hydrogen, separate and enhanced safety norms would be necessary for green hydrogen stations. This would require oil marketing companies (OMCs) to establish dedicated infrastructure for retail sales of the fuel.

The playbook is part of Indian Oil's $30 billion investment plan to achieve net zero by 2046, and involves the refiner to meet its captive demand, followed by catering to mobility requirements and exports. The plan being worked upon by the country’s largest refiner’s strategy group involves setting up these carbon emission-free fuel dispensing stations at new locations, and not at its current network points. 

Green hydrogen is used as a clean fuel for vehicles, especially in fuel cell electric vehicles, as a zero-emission alternative to fossil fuels.

Without divulging further detail of its retail plans for green hydrogen, Sahney said: "Everything is on our strategy table."

The plan involves selling green hydrogen from Indian Oil's 10,000 tonne per annum green hydrogen generation unit at Panipat refinery to be commissioned by December next year. 

Also Read: India's first green hydrogen tender meets a chaotic end 

Panipat refinery

Referring to the planned green hydrogen plant at its Panipat refinery, Sahney said: "First of all, I am putting up this plant at Panipat, I want to take it to its logical conclusion, that is increased use in mobility. Till the time mobility is there, I can use that in my refineries also. I can replace the grey hydrogen with the green one. Otherwise my ultimate aim will be to use it more and more towards mobility."

He noted that it would be the largest green hydrogen facility in the country. Recently, Indian Oil discovered the levelized cost of green hydrogen at $4.66 per kg for the proposed green hydrogen plant. This is a key breakthrough as the government has been eyeing green hydrogen prices to come below $5 per kg, with an eventual target of bringing it to $1 per kg. The development assumes significance in the backdrop of India targeting 5 million tonne annual green hydrogen production by 2030.

Noting that technology for use of green hydrogen in automobiles is already available and that the state-run OMC is supplying hydrogen to about 15 fuel cell buses in the national capital, he stressed on the need for having dispensing stations or retail outlets dedicated to supplying new-age fuel to customers.

"We don't have enough dispensing stations in India. I think only three or four dispensing stations are there. Two of them are with us - one in Gujarat and another in Faridabad...But with those four, you can't run a proper automobile (ecosystem), so it's a chicken and egg story. If I can develop an ecosystem, if I can develop green hydrogen first and then our number of dispensing stations in a particular area in a particular state in a particular distance, and then encourage people to buy those automobiles there. And then, maybe we can develop an ecosystem there," he said.

Another state-run major NTPC Ltd runs a green hydrogen refueling station in Leh.

Sahney also said that the company would be open to catering to export opportunities. On being asked if Indian Oil would look at exporting green hydrogen, he said: “Why not? If opportunity comes, why not?" He also said that with the growing energy requirement in India, new energy sources like green hydrogen or renewable energy would only complement the existing fossil fuel sources, rather than competing with the conventional fuels.

Under the National Green Hydrogen Mission, India also aims to become an export hub for the molecule. Other companies which have forayed in this business include Mukesh Ambani-led Reliance Industries, Greenko founders-backed AM Green, Adani Group, Larsen & Toubro, ReNew and Avaada.

In 2023, RIL Chairman Mukesh Ambani announced that it has come up with a roadmap to bring down green hydrogen cost to $1 per kg. Last month, Adani Group commissioned India's first off-grid 5 megawatt green hydrogen pilot plant in Kutch, Gujarat. AM Green is eyeing the export market and plans to begin production at green ammonia facility in Kakinada, Andhra Pradesh, in the second half of 2026, primarily targeting export markets in Europe. 

AM Green has already signed offtake agreements with major buyers including Uniper, Yara, and Keppel, supporting a range of green hydrogen applications.

Last year, Nasdaq-listed ReNew Energy Global plc signed an initial agreement with JERA Co., Inc, Japan’s largest power generation company, to jointly evaluate development of a green ammonia production project in India. In January, Avaada Group announced a partnership with Switzerland's Casale to build a green ammonia plant in Odisha.

Indian Oil also has a joint venture with L&T and ReNew to develop green hydrogen projects in the country, which they had launched in 2023.

Also Read | Grey to green: Emission-free hydrogen remains elusive

Amid a massive policy push by the government and capex announcements by energy companies both in the public and private sector, cost of green hydrogen has remained a concern for the growth of this emerging space.

In March, Union minister for road transport and highways Nitin Gadkari urged the industry to come up with innovative solution to bring the capital investment required for setting up hydrogen fuel stations. 

Noting that currently, the cost of setting up a hydrogen gas station goes to around ₹7 crore, he said: "Indian technology, innovation, and research are crucial for the future and we need to convert knowledge into wealth. To make hydrogen fuel stations widely accessible, the cost of setting up each station must be reduced to a maximum of ₹50 lakh."