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France’s Total Energies to buy stake in Adani’s hydrogen business

PALAK SHAH | | Updated on: May 23, 2022

(FILES) This file photo taken on May 28, 2021 shows the new TotalEnergies logo during its unveling ceremony, at a charging station in La Defense on the outskirts of Paris. - French energy giant TotalEnergies announced on January 21, 2022 that it was pulling out of Myanmar, where it was a partner and operator of the Yadana gas field, a long-standing demand of human rights NGOs after a military coup last year. (Photo by Christophe ARCHAMBAULT / AFP) | Photo Credit: CHRISTOPHE ARCHAMBAULT

Talks assume significance even as the Government has announced a National Hydrogen Policy

Total Energies, the French oil and gas major, is likely to pick up a minority stake of 10 per cent or more in Adani group’s hydrogen business under the newly formed company Adani New Industries Ltd (ANIL). The deal is in the final stages and an announcement is likely in the next few months, sources close to the development said.

In India, Total had earlier partnered with Adani in 2018 with investments in Adani Gas Limited, city gas distribution business, associated LNG terminal business and gas marketing business. Total acquired 37.4 per cent stake in Adani Gas Limited and 50 per cent stake in Dhamra LNG project. Then, Adani and Total had also agreed for an alliance into the wider sustainable energy space. Total and Adani agreed the acquisition of a 50 per cent stake in a 2.35 GWac portfolio of operating solar assets owned by Adani Gas and a 20 per cent stake in Adani Green Energy for a global investment of $2.5 billion.

National Hydrogen policy

The talks between Adani group and Total to expand the ongoing partnership comes even as the Government has announced a National Hydrogen Policy (NHP) that gives a slew of incentives to projects commissioned under it before 2025 and billionaires Gautam Adani and Mukesh Ambani will be competing with each other in the segment.

Adani and Total did not reply to queries sent by BusinessLine.

The NHP has envisaged an annual hydrogen production target of 5 million tons by 2030, for which it provides tax breaks and allots land to set up plants. Once India is able to build the capacity for green hydrogen and an ecosystem, the energy produced can be used to drive the global motor vehicle and power industry among many more uses. Also, the government has plans to mandate green hydrogen use for applications such as oil refining and fertilisers production to boost demand. Production-linked incentives are planned for electrolyser makers and subsidies may support up to 15 gigawatts of electrolysers.

Other incentives include waiver of inter-state transmission tariff for 25 years for projects commissioned before June 2025 and permitting open access for sourcing renewable energy within 15 days of receiving applications.

In addition, banking of renewable energy used for producing green hydrogen and green ammonia for 30 days has been allowed. Further, special manufacturing zones are to be set up by the government for stimulating production of green hydrogen and green ammonia. ANIL plans to undertake green hydrogen projects, manufacturing of wind turbines, electrolyser and solar modules batteries among other components to create an entire ecosystem for green energy. Adani had announced in November 2021 that his group will invest $70 billion to position itself as the world’s largest green energy company.

But the green hydrogen industry is still in its infancy and piloting plants to study the technology itself requires huge investments and hence the government subsidy, experts said. Water and cheap power are the two important resources needed to become a global green hydrogen player. India has a large coastline with access to seawater and ample sunlight for solar power.

What is driving Total to hydrogen?

Total Energies is looking to speed up on its quest to achieve a global carbon neutral footprint for which it is engaged in a fierce battle with other oil and gas giants in the US and Europe. The world’s top eight oil and gas companies have set a deadline of 2050 to achieve carbon neutral status. Their means is by investing in green energy companies and projects to achieve a balance with their polluting and high carbon intensity oil and gas businesses.

Published on May 23, 2022
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