Singapore-based Sembcorp is close to finalizing an offtake agreement with Japan's Kyushu Electric Power for its INR 36,238 crore green hydrogen facility planned inside the VOC Port complex in Thoothukudi. The project represents a trilateral clean energy partnership between India, Singapore, and Japan, with production targeted to begin in 2029.

Project Specifications and Timeline

The green hydrogen facility will span 160 acres within the VOC Port complex and is designed to produce 2 lakh tonnes of green ammonia annually. The first output from the facility is targeted for 2029. VOC Port chairman Susanta Kumar Purohit stated that the execution of the project will commence once the offtake agreement is signed.

Sembcorp will convert its green hydrogen into ammonia, with Kyushu Electric Power committing to purchase the fuel for use as a partial substitute for coal in its thermal plants. The project involves multiple international partners, with Sojitz Corporation acting as intermediary and NYK Line handling maritime transport responsibilities.

Partnership Structure and Agreements

A preliminary Heads of Terms agreement has already been signed among the four companies involved in the venture. The partnership structure positions the project as a trilateral clean energy collaboration between India, Singapore, and Japan, demonstrating international cooperation in the green energy sector. Despite the high-profile launch by Chief Minister MK Stalin nearly a year ago, progress on the ground has been limited.

Apart from a small pilot project at the port, Thoothukudi's green hydrogen ecosystem has yet to take shape.

Industry Challenges and Stalled Projects

Other mega projects in the green hydrogen sector in Tamil Nadu have also seen little progress. ACME Green Hydrogen and Chemicals' proposed INR 52,474-crore plant, announced in 2022, has made no headway. An INR 34,000-crore investment pledged by Malaysia's state-owned Petronas has likewise not materialized.

Analysts cite cost as the biggest hurdle facing the green hydrogen industry. Green hydrogen remains significantly more expensive than fossil fuels or even “grey hydrogen,” derived from natural gas, with India's levelized cost currently estimated at INR 400 per kg. Production requires significant clean power, large volumes of water, and precious metals such as platinum, while storage and transport add further expense.

New Research and Development Initiative

Despite the challenges, the state continues to court investment in the hydrogen sector. Hyundai Motor India, in partnership with IIT Madras and the state government, has announced an INR 180-crore HTWO Innovation Centre at IIT-M's Discovery Campus near Chennai. The research and development hub is due to open within two years and will focus on indigenous hydrogen technologies. Industries Minister TRB Rajaa described the initiative as “a crucial step towards building domestic hydrogen capability.”

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