TotalEnergies Partners With Adani Enterprises To Develop World's Largest Green Hydrogen Ecosystem

French multi-energy company TotalEnergies has entered into an agreement with Adani Enterprises Limited (AEL) to acquire a 25 per cent interest in Adani New Industries Limited (ANIL) to develop the green hydrogen ecosystem. The deal marks the largest ever investment by any foreign entity in an Indian energy firm.

"Adani and energy supermajor TotalEnergies of France, have entered into a new partnership to jointly create the world’s largest green hydrogen ecosystem. In this strategic alliance, TotalEnergies will acquire a 25 per cent minority interest in Adani New Industries Ltd (ANIL) from Adani Enterprises Ltd (AEL)," said a joint statement by Adani Enterprises and TotalEnergies.

ANIL will be the exclusive platform of AEL and TotalEnergies for the production and commercialisation of green hydrogen in India. Initially, ANIL will target a production of one million metric tonnes of green hydrogen per year (MTPA) by 2030, supported by around 30 gigawatts (GW) of new renewable power generation capacity.

“The strategic value of the Adani-TotalEnergies relationship is immense at both the business level and the ambition level,” said Gautam Adani, chairman, Adani Group.

“In our journey to become the largest green hydrogen player in the world, the partnership with TotalEnergies adds several dimensions that include R&D, market reach and an understanding of the end consumer. This fundamentally allows us to shape market demand. This is why I find the continued extension of our partnership to hold such great value. Our confidence in our ability to produce the world’s least expensive electron is what will drive our ability to produce the world’s least expensive green hydrogen. This partnership will open up a number of exciting downstream pathways,” the statement added.

“TotalEnergies’ entry into ANIL is a major milestone in implementing our renewable and low carbon hydrogen strategy, where we want to not only decarbonise the hydrogen used in our European refineries by 2030, but also pioneer the mass production of green hydrogen to meet demand, as the market will take off by the end of this decade,” said Patrick Pouyanne, chairman and chief executive officer, TotalEnergies.

“We are also very pleased with this agreement, which further strengthens our alliance with the Adani Group in India and contributes to the valorisation of India’s abundant low-cost renewable power potential. This future production capacity of 1 million tonne per annum of green hydrogen will be a major step in increasing TotalEnergies’ share of new decarbonised molecules including biofuels, biogas, hydrogen, and e-fuels to 25 per cent of its energy production and sales by 2050,” he added.

The Plan

According to the joint press release by the two companies, while Adani will lend its deep knowledge of the Indian market, execution capabilities, and operations and capital management excellence to the partnership, TotalEnergies will bring its understanding of the global markets, expertise in renewable technologies and large-scale industrial projects, and financial strength to lower the financing costs.

The complementary strengths of the partners will help ANIL deliver the largest green hydrogen ecosystem in the world, which will enable the lowest green hydrogen cost to the consumer.

In order to control green hydrogen production costs, ANIL will be integrated along the value chain, from the manufacturing of equipment needed to generate renewable power and produce green hydrogen, to the production of green hydrogen itself and its transformation into derivatives, including nitrogenous fertilisers and methanol, both for the domestic market and export.

To start with, ANIL intends to develop a project to produce 1.3 MTPA of urea derived from green hydrogen for the Indian domestic market, as a substitution to current urea imports, and will invest around $5 billion in a 2 GW electrolyser fed by renewable power from a 4 GW solar and wind farm.

Energy Transition At TotalEnergies

TotalEnergies is a global multi-energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables and electricity. The deal to acquire a minority stake in ANIL is the attempt by the energy major to use renewable and low-carbon hydrogen in its energy transition goal.

The company is working with its suppliers and partners to decarbonise all the hydrogen used in its European refineries by 2030. This represents a reduction in CO2 emissions of 3 million tonnes per year. Further out, TotalEnergies aims to pioneer the mass production of renewable and low carbon hydrogen to meet demand for hydrogen fuel as soon as the market takes off, notably to help decarbonise heavy transport.

For TotalEnergies, which has been enhancing its focus on clean energy over the past two years, the agreement with Adani could act as a major step in increasing its share of new decarbonised molecules including biofuels, biogas, hydrogen, and e-fuels to 25 per cent of its energy production and sales by 2050, according to the French energy giant's chief.

The Alliance

This is the fourth partnership between the two companies with earlier ones focused on LNG terminals, city gas distribution and solar power.

In 2018, TotalEnergies and Adani Group embarked on an energy partnership with the development of a joint LNG business — from re-gas terminals to LNG marketing — and an investment by TotalEnergies in Adani Total Gas Limited, a city gas distribution business.

In 2020, TotalEnergies and Adani Group deepened their relationship with the acquisition by TotalEnergies of a 20 per cent minority interest in Adani Green Energy Limited (AGEL), then the largest solar developer in the world, along with a 50 per cent stake in a 2.35 GW portfolio of operating solar assets owned by AGEL, for a total investment of $2.5 billion.

ANIL

The logistics-to-energy conglomerate had incorporated a wholly-owned subsidiary, Adani New Industries Ltd (ANIL), in January 2022 to undertake new energy and low carbon initiatives of the group, as it looks to become the world's largest renewable energy company and produce the cheapest hydrogen.

The company, in a regulatory filing had said, “it will undertake business of developing and operating projects for the synthesis of low carbon fuels and chemicals, generation of low carbon electricity and the manufacture of key components/material for projects including generation of green hydrogen, related downstream products, electricity generation, and manufacture of wind turbines.”

ANIL will also manufacture solar modules, batteries, electrolysers, associated upstream manufacturing as well as ancillary industries and undertake all such activities associated therewith in this regard, it added.

Also Read: Green Hydrogen Market In India Likely To Reach $340 Billion By 2050: NITI Aayog Report