IOCL scraps first green hydrogen tender as industry body moves to court

Indian Oil Corporation (IOCL) has cancelled its first tender for manufacturing green hydrogen after an industry association dragged the state-run company to the Delhi High Court alleging conflict of interest.

The country’s largest oil marketing company (OMC) cancelled the tender for setting up a green hydrogen manufacturing unit of 10 kilo tonnes per annum (KTPA) capacity at its Panipat refinery and petrochemicals complex on a build, own, operate, transfer (BOOT) basis. No reason was given for the cancellation.

The tender, which was floated last year with the last date for submitting bids as November 29, put the contract period at 25 years. The successful bidder had to supply green hydrogen within 30 months from receiving the letter of award (LoA).

Independent Green Hydrogen Producers Association (IGHPA), an industry body created by Azure Power, Acme Group, Fortum India, O2 Power, Sprng Energy and SunEdison Infrastructure, challenged the IOCL tender in the Delhi High Court last year in November.

The petition challenged Clause19 of the Notice Inviting Tender (NIT) issued by IOCL on August 28, 2023, which creates a Right of First Refusal in favour of the IOCL JV (GH4India). It also challenged Clause 20 (xix) and (xvi), which permits IOC to not accept the lowest bid and also exempts the IOCL JV from submitting Earnest Money Deposit (EMD).

GH4India is a joint venture (JV) firm of IOCL, L&T and ReNew, which was incorporated on August 25 last year and has been created for producing green hydrogen and its derivatives.

“They submit that the government cannot arbitrarily choose any person it likes for entering into a commercial relationship thereby discriminating between similarly situated persons. They further submit that the Supreme Court has repeatedly warned against specific clauses in tenders which have the effect of favouring a single tenderer,” the petitioner said in High Court.

IOCL did not respond to queries from businessline. The next date of hearing in the High Court is on March 28.

The development assumes importance as green hydrogen is a critical transition fuel, which is important to decarbonise heavy duty long distance commercial transportation, steel, refineries among other sectors.

The IOCL tender was the first big step towards manufacturing green hydrogen in the country and for discovering the commercial price for producing the commodity.

The Ministry of New and Renewable Energy (MNRE) is implementing the National Green Hydrogen Mission with an outlay of ₹19,744 crore. The overarching objective of the Mission is to make India the Global Hub for production, usage and export of Green Hydrogen and its derivatives.