ENVIRONMENTAL REGULATION OF HYDROGEN PROJECTS

Introduction

Hydrogen, particularly green hydrogen produced through renewable-powered electrolysis, is increasingly regarded as an important instrument for decarbonising industries such as steel, fertilizers, refining, transport and power generation. However, hydrogen projects are not environmentally impact-free. Their construction and operation can involve substantial water consumption, renewable-energy infrastructure, chemical processing, land acquisition, desalination, pipelines, storage facilities and risks associated with leakage, fire and explosions.

Environmental regulation of hydrogen projects therefore seeks to ensure that the climate advantages of hydrogen are achieved without transferring environmental costs to water resources, land, biodiversity, local communities or public health.

In India, hydrogen projects operate within the broader framework of environmental legislation, including the Environment (Protection) Act, 1986, EIA Notification 2006, Water (Prevention and Control of Pollution) Act, 1974, Air (Prevention and Control of Pollution) Act, 1981, Forest (Conservation) framework and environmental principles developed by the Supreme Court and National Green Tribunal.

1. Environmental Impact Assessment and Hydrogen Projects

A central regulatory question is whether the particular components of a hydrogen project fall within activities requiring prior Environmental Clearance (EC) under the EIA framework. This depends upon the project's nature, scale, associated industrial processes and infrastructure.

Where environmental clearance is legally required, environmental assessment can examine:

• land-use impacts;
• water requirements;
• wastewater generation;
• air emissions;
• hazardous substances;
• biodiversity effects;
• cumulative environmental impacts; and
• risks associated with storage and transportation.

The importance of prior, rather than merely retrospective, environmental assessment has repeatedly been emphasized in Indian environmental jurisprudence. The Supreme Court's environmental-clearance jurisprudence treats preventive assessment as a core element of environmental governance.

2. Water Regulation

Water is particularly important in green-hydrogen production because electrolysis separates water into hydrogen and oxygen.

Large hydrogen facilities may therefore generate concerns regarding freshwater availability, especially when located in water-stressed regions. Environmental regulators may need to assess whether water withdrawal could adversely affect drinking-water supplies, agriculture, groundwater levels or ecosystems.

Where desalinated seawater is used, additional environmental issues arise concerning energy consumption and the disposal of concentrated brine.

Consequently, hydrogen regulation should apply a water-energy nexus approach, examining hydrogen production not merely according to carbon emissions but according to its overall environmental footprint.

3. Pollution Control

Hydrogen itself does not produce carbon dioxide when used in a fuel cell, but the complete production chain may still create environmental pollution.

For example, hydrogen manufactured from fossil fuels may generate substantial greenhouse-gas emissions unless effective carbon capture is employed. Associated industrial facilities can also produce wastewater, chemical residues and conventional air pollutants.

The Water Act and Air Act therefore remain important parts of industrial environmental regulation. Contemporary NGT proceedings demonstrate the continuing legal importance of the relationship between environmental clearance and consent requirements under pollution-control legislation.

4. Land, Renewable Energy and Biodiversity

Green hydrogen requires large quantities of renewable electricity. Large hydrogen projects may therefore be associated with extensive solar parks, wind farms and transmission infrastructure.

The environmental footprint must consequently be assessed across the entire project chain:

Renewable generation → Transmission → Electrolysis → Hydrogen storage → Transportation → Final use

A project may have low operational carbon emissions while still creating significant ecological effects through land conversion, habitat fragmentation, transmission corridors or water consumption.

Environmental regulation should therefore consider cumulative impacts, rather than examining each component in isolation.

5. Safety and Environmental Risk

Hydrogen is highly flammable and requires carefully engineered storage and transportation systems. Leakage, accidental ignition and infrastructure failure can create risks for workers, surrounding communities and the environment.

Environmental governance therefore overlaps with industrial and technical safety regulation. Appropriate safeguards include risk assessments, emergency-response plans, leak-detection systems, safety distances, pipeline standards and appropriate storage requirements.

The broader principle is that promoting a clean-energy technology does not eliminate the State's obligation to regulate its environmental and safety externalities.

6. Precautionary Principle

The precautionary principle has particular relevance to emerging hydrogen technologies because environmental regulators may face scientific uncertainty regarding cumulative water use, leakage, ecosystem effects or new infrastructure risks.

In Vellore Citizens' Welfare Forum v. Union of India (1996), the Supreme Court held that the precautionary principle and polluter-pays principle are essential features of sustainable development and part of Indian environmental law. The Court explained that authorities should anticipate and prevent environmental degradation and that scientific uncertainty cannot justify postponing preventive measures where serious environmental harm is threatened.

Applied to hydrogen projects, this means technological novelty cannot itself justify weak environmental scrutiny.

7. Polluter Pays Principle

The same Vellore Citizens' Welfare Forum decision established that industries responsible for environmental damage may be required to bear not merely compensation payable to affected persons but also the costs of restoring damaged ecology.

Accordingly, if a hydrogen-production facility contaminates groundwater, improperly disposes of industrial waste or causes other environmental damage, its climate-friendly purpose would not exempt it from environmental liability.

8. Alembic Pharmaceuticals Ltd. v. Rohit Prajapati (2020)

This Supreme Court decision is particularly important for understanding prior environmental clearance. The Court rejected the normalisation of ex post facto environmental clearance, emphasizing that environmental assessment is fundamentally preventive.

The principle is directly relevant where a hydrogen or associated industrial project legally requires prior EC: developers cannot ordinarily treat environmental assessment as an administrative exercise that may simply be regularised after construction or operation has commenced. The Supreme Court's later environmental jurisprudence has continued to engage with the legality of post-facto clearance mechanisms.

9. Lafarge Umiam Mining Pvt. Ltd. v. Union of India (2011)

The Supreme Court's decision in Lafarge Umiam Mining is significant for sustainable-development reasoning, environmental decision-making and institutional scrutiny of projects involving ecological concerns. Its principles support careful balancing between development objectives and environmental protection.

For hydrogen infrastructure, this means the fact that a project contributes to decarbonisation is important, but it cannot automatically override requirements concerning forests, biodiversity, environmental assessment and lawful decision-making. The continuing relevance of Lafarge to environmental-clearance disputes is reflected in later NGT proceedings.

10. Sustainable Development and Hydrogen Governance

Hydrogen regulation ultimately requires application of the principle of sustainable development. Environmental governance should distinguish genuinely low-impact hydrogen from projects that merely relocate pollution.

A comprehensive regulatory assessment should therefore examine:

Carbon intensity + Water footprint + Land footprint + Biodiversity impact + Pollution + Safety + Social impact

This lifecycle perspective is especially important because describing hydrogen as "green" does not by itself establish that every associated project is environmentally sustainable.

Conclusion

Environmental regulation of hydrogen projects represents the intersection of energy transition law, pollution control, water governance, environmental impact assessment, industrial safety and climate policy. Green hydrogen can contribute substantially to decarbonisation, but its environmental legitimacy depends upon how electricity, water and land are obtained and how production, storage and transportation infrastructure is managed.

Indian environmental jurisprudence—particularly Vellore Citizens' Welfare Forum, Lafarge Umiam Mining and Alembic Pharmaceuticals—provides important principles for this emerging sector. The precautionary principle requires risks to be anticipated; the polluter-pays principle places environmental costs upon responsible actors; sustainable development requires reconciliation of development with ecological protection; and environmental-clearance jurisprudence emphasizes preventive assessment.

Thus, effective hydrogen governance should not simply ask whether hydrogen reduces carbon emissions, but whether the complete hydrogen value chain is environmentally sustainable, legally compliant and socially responsible.