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Asia’s Hydrogen Sector has lessons to learn from Adani-Snam deal

Companies aim to collaborate in hydrogen space

Adani may expand in both blue, green hydrogen

Deal could trigger more tie-ups with European companies

The move by India’s Adani Group to seal a strategic deal in the hydrogen space with Italy’s Snam may serve as a wake-up call for other energy firms in the region to increasingly tap the expertise of companies in Europe, where the push toward the carbon-free fuel is moving at a much faster pace than in Asia.

Adani’s move comes at a time when New Delhi is aiming to speed up the energy transition process through policy incentives while the economy slowly recovers from COVID-19. Analysts believe this might be the right time for commodity and energy corporate houses to join the bandwagon as any recovery packages and policies might increasingly have clean fuel clauses attached to them.

“I see Adani playing a big role in both blue hydrogen and green hydrogen in India, given how aggressively they are moving both in the gas and in the renewable space,” Ravinder Kumar Malhotra, president of the Hydrogen Association of India, told S&P Global Platts.

Adani in early November announced a strategic collaboration with Snam to explore opportunities in the hydrogen space as well as other cleaner fuels. 

The collaboration comes as part of efforts between Indian prime minister Narendra Modi and Italian prime minister Giuseppe Conte to boost energy ties and jointly explore the hydrogen value chain in India and global markets, as well as the development of bio-gas, bio-methane, and low-carbon mobility.

“Both Adani Group and Snam have strong interest in exploring the promise of green hydrogen. While Snam has been a strong proponent of hydrogen adoption in Europe, green hydrogen is a natural extension to the Adani Group’s ambitious renewable portfolio,” Adani said in a statement.

Joining the bandwagon

Adani joins other Indian energy companies, such as Reliance Industries and Indian Oil Corp., which have made their intentions clear about embracing hydrogen, which they say has an edge over other non-fossil fuel sources.

Adani Group chairman Gautam Adani said that, in line with India’s target of 450 GW of renewable energy by 2030, the company had embarked on an ambitious carbon offset program, adding that India would be one of the most attractive transition markets for low carbon electricity technologies.

“We intend to play an essential role in this energy mix transition,” Adani said, adding that the company was growing sharply in the solar power space and would continue to diversify its energy portfolio.

Adani said that its partnership with Snam would help to leverage scale and technology to produce 100% green hydrogen using renewable energy in an economical and cleaner way to serve end-users and industrial clusters.

“India doesn’t have a significant homegrown technology base for hydrogen. Corporates will look outside for expertise and technology for hydrogen,” said Edgare Kerkwijk, board member of the Asia-Pacific Hydrogen Association.

Malhotra said that Asia would see more firms tying with European companies in the future given their technological advancement.

“There is no need for Asia to spend time in developing technologies when you can have some proven technologies already available in Europe. Europe has the technology and Asia has the demand potential. Collaborating with European companies would be ideal for Asia,” he added.

Other companies keen

As part of the recent energy ties with Italy, a non-binding agreement has been signed between Adani Gas Ltd. — a joint venture company of Adani Group and Total — and Snam to create a joint venture for setting up a compressor manufacturing facility in India, relying on the technology of Cubogas, a Snam4Mobility company.

The compressors would be installed in existing refueling stations and in those under development. This would help in promoting the development of refueling infrastructure for sustainable mobility and fostering the use of natural gas, Snam said.

Snam has also signed an agreement with Greenko, one of the largest renewable companies in the country, to cooperate in supporting the development of the hydrogen value chain in India.

Through the agreement, the two companies would collaborate on the study of hydrogen production methods from renewables, on the design of hydrogen-ready infrastructure, and on the potential final applications in both industry and transport, including fuel cell mobility.

Snam has also signed a memorandum of understanding with Indian Oil Corp. for possible joint initiatives in energy transition and in the natural gas infrastructure value chain, particularly for storage and regasification.

“The entry into the Indian market is a new milestone in our internationalization path,” Snam CEO Marco Alver√† said. “These agreements aim at promoting the growth of green hydrogen in India and other countries to help decarbonize industry and transport and at further developing natural gas and hydrogen mobility in a huge market”.

Indian officials recently said that New Delhi would soon come out with a clear roadmap on hydrogen, joining other countries in the Asia-Pacific region — like Japan, South Korea and Australia — that have come out with their long-term visions and targets for the next few decades.

Reliance has pledged to be a net carbon-zero company by 2035. IOC earlier in October launched its reformer plant that will produce hydrogen-spiked compressed natural gas, or H-CNG.

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