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TotalEnergies picks up 25% stake in Adani New Industries for green hydrogen business

Adani New Industries (ANIL)will be the exclusive platform of Adani Enterprises (AEL) and TotalEnergies for the production and commercialisation of green hydrogen in India.

TotalEnergies, a global oil major has entered into an agreement with Adani Enterprises (AEL) to acquire a 25 per cent interest in Adani New Industries (ANIL). 

ANIL will be the exclusive platform of AEL and TotalEnergies for the production and commercialisation of green hydrogen in India. ANIL will target the production of 1 million metric tons of green hydrogen per year (Mtpa) by 2030, underpinned by around 30 gigawatts (GW) of new renewable power generation capacity, as its first milestone.

In order to control green hydrogen production costs, ANIL will integrate 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 begin with, ANIL will develop a project to produce 1.3 Mtpa of urea derived from green hydrogen for the Indian domestic market, as a substitution for current urea imports, and will invest around $5 billion (Rs 38,785 crore) in a 2 GW electrolyser fed by renewable power from a 4 GW solar and wind farm.

Adani’s portfolio will contribute its deep knowledge of the Indian market, execution capabilities, and operations and capital management excellence, while TotalEnergies will offer its thorough understanding of the global markets, expertise in renewable technologies and large-scale industrial projects, and financial strength, enabling ANIL to lower its financing cost. 

Patrick Pouyanne, Chairman and CEO, TotalEnergies said: “TotalEnergies’ entry into ANIL is a major milestone in implementing our low carbon hydrogen strategy, where we want not only to decarbonise the hydrogen used in our European refineries by 2030 but also to pioneer the mass production of green hydrogen to meet demand, as the market will take off by the end of this decade. 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 Mtpa of green hydrogen will be a major step in increasing TotalEnergies’ share of new decarbonized molecules – including biofuels, biogas, hydrogen, and e-fuels – to 25 per cent of its energy production and sales by 2050.” 

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

In 2018, TotalEnergies and Adani Group embarked on an energy partnership with the development of a joint LNG business – from regas terminals to LNG marketing – and investment by TotalEnergies in Adani Total Gas, 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 (AGEL), then the largest solar developer in the world, along with a 50 per cent stake in a 2.35 GWac1 portfolio of operating solar assets owned by AGEL, for a total investment of $2.5 billion (Rs 19,392 crore).

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