NEECA drafts 'concept proposal' for support request

The National Energy Efficient and Conservation Authority (NEECA) has drafted a concept note to solicit technical support from global development partners for crafting a Green Hydrogen Policy and Framework for Pakistan. This move comes as the United Nations Industrial Development Organisation (UNIDO) has agreed to provide $14 million in funding for clean hydrogen initiatives, according to official sources reported by Business Recorder.

With assistance from the Asian Development Bank (ADB), NEECA has finalized a "pre-feasibility study on Pakistan Green Hydrogen Energy," unveiled on January 18, 2024. Following directives from a Working Group meeting of the SIFC, NEECA is to present a Concept Note to the Economic Affairs Division (EAD) to seek further technical guidance on developing a robust Green Hydrogen Policy and Framework.

Investor interest in Punjab's Green Hydrogen projects has surged to approximately $4.3 billion, showcasing a competitive production cost of $1.2/kg on the global stage. However, existing Power Purchase Agreements (PPAs) with power plants present challenges in supplying electricity for Green Hydrogen production. Thus, projects incorporating Renewable Energy (RE) infrastructure are given priority.

Pakistan's reliance on imported fossil fuels, comprising about 85% of its primary energy mix, has led to high energy costs and increased greenhouse gas emissions. Transitioning to indigenous RE resources presents a cost-effective solution, with Green Hydrogen playing a crucial role due to its high energy content and environmental compatibility.

Despite facing significant challenges in shifting to a sustainable energy model, Pakistan's development of a comprehensive Policy and Regulatory Framework for Green Hydrogen could mark a significant step forward. This initiative aims to assess Pakistan's RE potential, particularly for solar and wind resources, identify current policy gaps, engage stakeholders for inclusive policy development, and formulate guidelines to promote Green Hydrogen Technologies. The goals of this collaboration with International Development Partners include establishing a clear policy framework, raising awareness of Green Hydrogen benefits, mobilizing investment for its deployment, strengthening institutional capacities for governance, and enhancing international cooperation for technology transfer and capacity building.

Pakistan's Ambassador in Vienna reported UNIDO's positive response to Pakistan's efforts to introduce new technologies for industrial and energy transitions, with a focus on Green Hydrogen. A proposed project titled "accelerating de-carbonization in the industrial sector of Pakistan for sustainable energy transition through innovative technologies" has been drafted, featuring a $14 million budget with contributions from the Global Environment Facility (GEF) and other sources. The project aims to develop Green Hydrogen and ammonia, providing technical assistance and promoting investments for decarbonization in the industrial sector, with involvement from UNIDO, the Ministry of Climate Change, the Ministry of Industries, and the private sector.