Why Green Hydrogen Could Revolutionize Clean Energy
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In today’s edition of The Daily Brief:
Why Green Hydrogen Matters in the Energy Transition
From Setback to Strategy: Adani’s Petrochemical Journey
Why Green Hydrogen Matters in the Energy Transition
Imagine a fuel that doesn’t release harmful gases—gases linked to one in five deaths worldwide—when it’s burned. Instead, it produces something as harmless and useful as drinkable water. That’s the big promise of hydrogen energy. With everyone looking for alternatives to fossil fuels, hydrogen is quickly becoming a hot topic. Even major players like Adani and Ambani are betting big on it.
We wanted to break down hydrogen energy in a simple way—why it matters, how it works, the problems it might solve, whether it can really work on a big scale, and what the future could hold. We’re not experts, but this is our best shot at explaining it in plain, easy-to-follow language.
So, let’s start with the basics—what is hydrogen energy?
In simple terms, it’s about using hydrogen gas (H₂) as a fuel. You might remember from school that hydrogen is the most common element in the universe. But here’s the catch: unlike coal, oil, or natural gas, you can’t just dig up a bunch of hydrogen on Earth. It’s not hanging around ready to use. To make hydrogen energy, you first have to produce hydrogen gas—kind of like how we have to generate electricity before using it.
Just like electricity is created using things like fossil fuels, wind, or solar power, hydrogen also needs a starting point. The process of making hydrogen determines its “color”—and yes, hydrogen comes in a rainbow of colors depending on how it’s produced. There’s black, brown, green, pink, purple, gray, blue—you name it.
The one everyone’s talking about is green hydrogen. It’s made by using renewable energy, like wind or solar power, to split water into hydrogen and oxygen through a process called electrolysis. Since it uses clean energy and water, green hydrogen is often seen as the cleanest option. Plus, it doesn’t release any harmful emissions while being produced.
Now that we’ve covered the basics, you might be wondering, “Why do we even need hydrogen for the green transition?”
We all know that tackling climate change means moving away from fossil fuels, which still make up about 80% of global energy use. At first glance, the obvious answer seems to be switching to renewable or low-carbon electricity—like powering electric cars or heat pumps directly. That feels simpler than using renewable energy to make “green” hydrogen, only to burn that hydrogen later.
And for the most part, that’s true. Hydrogen is much less efficient, according to most estimates. Take electric vehicles (EVs), for example. Even with a 5% energy loss during transport and another 10% while charging and discharging batteries, EVs are still about 80% efficient overall. In comparison, hydrogen vehicles lose 30% to 40% of the renewable energy during hydrogen production and then another 40% when the hydrogen is used in a fuel cell.
Basically, it takes more energy to produce hydrogen through electrolysis than the hydrogen gives back when it’s converted to usable energy.
So, why are we still talking about hydrogen if it's so inefficient?
Because hydrogen still plays an important role in industries and transportation where using electricity isn’t practical, affordable, or even possible with today’s technology. These are often called the “hard-to-electrify” or “hard-to-abate” sectors.
Think about high-temperature industrial processes like making steel or cement. These typically rely on coal, and electric furnaces just don’t get the job done. Or consider heavy-duty, long-distance transport, where massive battery packs aren’t practical or cost-effective because they don’t store enough energy for the weight.
These sectors are responsible for a big chunk of CO₂ emissions. So, while green hydrogen isn’t a perfect solution for everything, it can still play an important role in the broader move to cleaner energy.
So, what’s the world doing about it?
According to the World Energy Outlook 2024, about 97 million tonnes of hydrogen were produced globally in 2023. To put that into perspective, we’ll need around 500 million tonnes by 2050 to meet 10% of the world’s energy needs, according to the Financial Times.
The problem is, that most of today’s hydrogen is made by burning fossil fuels without capturing the carbon emissions. About 63% comes from natural gas, and another 20% is made using coal.
In 2023, less than 1 million tonnes of hydrogen could actually be considered “low-emissions,” and even most of that was still made using fossil fuels, just with carbon capture technology. Carbon capture works by trapping carbon dioxide (CO₂) from power plants or factories before it escapes into the atmosphere. Once captured, the CO₂ is either stored underground or used in other processes—like making certain products—so it doesn’t add to global warming.
As for hydrogen made by splitting water (electrolysis), it was less than 100,000 tonnes in 2023, and most of it came from China.
The bottom line? The dream of a green hydrogen future—where renewable energy is used to make hydrogen from water—is still far from reality. Right now, most hydrogen is still being made the old-fashioned way, using fossil fuels.
Now, let’s talk about India’s stance on hydrogen.
In January 2023, India launched the National Green Hydrogen Mission. The goal is to produce 5 million tonnes of renewable hydrogen by 2030 and to become a leading manufacturer of electrolyzers.
Indian companies aren’t holding back either. Here are a few examples:
Reliance Industries (RIL) plans to become a net-zero carbon company by 2035 and invest nearly ₹750 billion over the next three years in renewable energy, with green hydrogen being a major focus.
Indian Oil is setting up India’s first green hydrogen unit at its Mathura refinery, where it will be used to process crude oil.
Adani Group is starting India’s largest hydrogen blending project in natural gas.
But it’s not all smooth sailing with green hydrogen. Many critics have raised concerns:
High Production Costs and Energy Needs
Producing green hydrogen through electrolysis requires a lot of renewable electricity, making it much more expensive than fossil-based hydrogen.
Infrastructure Challenges
Transporting, storing, and distributing hydrogen needs specialized infrastructure, like pressurized tanks and pipelines, which is still underdeveloped and expensive to build.
Efficiency Losses
Turning electricity into hydrogen (and back into electricity, if used in fuel cells) involves a lot of energy loss, making the system less efficient overall.
We know this is a complex topic, and there’s a good chance we’ve missed some important details or oversimplified things. If you’re an expert and have insights to share—or if you notice any gaps in our explanation—please share your thoughts in the comments. We’d love to learn from you!
From Setback to Strategy: Adani’s Petrochemical Journey
Adani is back in the petrochemicals game. They’ve just announced a joint venture with Thailand’s Indorama Resources to create Valor Petrochemicals Ltd, with plans to build large-scale petrochemical plants in India. It’s a bold move for a company that’s had a few false starts in this sector.
Back in 2021, Adani revealed plans for a massive ₹34,900 crore coal-to-PVC plant in Mundra, Gujarat. The goal was to produce 2 million tonnes of PVC each year and cut down on India’s reliance on imports, which currently meet nearly 60% of the country’s PVC demand. But things stalled in 2023 after the Hindenburg report brought financial scrutiny to the group, forcing them to put the project on hold. They had even tried to secure ₹15,000 crore in funding from SBI, but that didn’t go anywhere.
Now, with Indorama’s expertise, Adani seems ready to finally get this project off the ground.
But what exactly are petrochemicals? And why is Adani getting into this space where Reliance is already the biggest player?
Petrochemicals are chemical products made from hydrocarbons, which usually come from crude oil or natural gas. In simple terms, they’re the building blocks of modern life.
We use petrochemicals every day—they’re in plastics, textiles, packaging, medicines, electronics, detergents, construction materials, and so many other things we rely on.
Here’s how it works: when crude oil is refined, the main goal is to make fuels like petrol, diesel, and aviation fuel. But this process also creates byproducts like naphtha, ethane, and propane. These byproducts are the raw materials for petrochemicals. They’re processed further to produce things like ethylene, propylene, and benzene, which are essential for making plastics, synthetic rubber, and a lot more.
Take Indian Oil Corporation, for example. They’ve been focusing on increasing their “petrochemical intensity,” which simply means converting more of their crude oil into petrochemicals instead of low-margin fuels. Reliance Industries has already perfected this approach. Their Jamnagar facility isn’t just the world’s largest refinery—it’s also a fully integrated petrochemical complex with a massive capacity of 30 million tonnes per year.
This is why refineries and petrochemical plants are increasingly being built together. It’s cheaper, more efficient, and makes good business sense.
India is in a great position for a petrochemical boom. Right now, the country’s per capita petrochemical consumption is just 10 kilograms—only one-third of the global average of 30 kilograms.
This gap highlights the huge potential for growth as incomes rise, cities expand, and industries grow. Sectors like packaging, textiles, construction, and automotive are driving this demand.
The Indian government is well aware of the opportunity. Plans are already underway to double India’s petrochemical capacity to 46 million tonnes per year by 2030. This isn’t just about meeting domestic demand but also reducing reliance on imports. Right now, India imports 60% of its PVC needs and spends around $87 billion annually on chemical imports.
But this growth doesn’t come without challenges. India heavily depends on refinery-integrated petrochemical production, which makes up 80% of its output. While this approach is cost-efficient, it also means India still imports many high-value specialty chemicals that are used in downstream industries.
The petrochemical industry is attractive because it’s far more profitable than refining crude oil into fuels like petrol and diesel, which is a low-margin business. Turning feedstocks like naphtha into ethylene and propylene, on the other hand, offers much better returns. This is why oil refiners worldwide are shifting their focus to petrochemicals. According to a study by McKinsey, petrochemicals could make up as much as 80% of new refining capacity investments globally as companies prepare for the future.
The International Energy Agency (IEA) predicts that petrochemicals will be the fastest-growing segment of oil demand through 2030. While the demand for fuels is slowing down due to electric vehicles and renewable energy, petrochemicals are essential. From the plastic casing of your smartphone to the polymers in wind turbine blades, petrochemicals are the backbone of modern manufacturing.
India’s petrochemical ambitions, however, face tough competition. The Middle East has a natural advantage with abundant natural gas for feedstock, and China is a dominant player both in production and consumption. But China’s recent economic slowdown has created excess capacity, leading to cheaper exports that often flood markets like India.
A report by ICRA highlights how overseas producers dumping cheaper products in the Indian market has put pressure on the margins of Indian manufacturers.
At the same time, sustainability is reshaping the petrochemical industry. The global push for a circular economy—reducing plastic waste and reusing materials—is driving companies to innovate. For India, this presents both a challenge and an opportunity to move toward more sustainable petrochemical production.
For companies like Reliance, Indian Oil Corporation, and now Adani, expanding into petrochemicals makes perfect sense. With demand for transport fuels leveling off, these firms are using their existing refinery infrastructure to produce higher-margin petrochemicals. Reliance’s Jamnagar complex is a prime example of this strategy, combining refining and petrochemical production to maximize profits.
Adani’s new venture with Indorama follows this trend. By focusing on petrochemicals, the group isn’t just diversifying its business but also positioning itself in a high-growth industry.
Tidbits:
Vegetarian thali prices rose 6% year-on-year to ₹31.60 in December, while non-vegetarian thali prices jumped 12% to ₹63.30. This increase was mainly due to higher costs of potatoes, tomatoes, and chicken. On a month-to-month basis, veg thali prices dropped 3%, but non-veg thali went up by 3%, reflecting ongoing food inflation challenges.
The second phase of the PLI Scheme for Specialty Steel, with a budget of ₹6,322 crore, aims to reduce imports and boost self-reliance. By lowering investment requirements, the scheme focuses on increasing downstream production capacity and positioning India as a global leader in this sector.
Nuvoco Vistas has acquired Vadraj Cement, adding 6 million tonnes per annum (mtpa) to its capacity, bringing the total to 31 mtpa. With phased refurbishments planned, this deal strengthens Nuvoco’s position as India’s fifth-largest cement producer.
-This edition of the newsletter was written by Kashish and Krishna
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Thank you kashish and krishna
Many Thanks to Zerodha, Kashish and Krishna for filling the gap between loads of headlines to summarized narration of impact making stories. Thank you so much!!!