Hydrogen Storage Safety and Liability Regulation

Hydrogen storage is a legally sensitive area because hydrogen is highly flammable, has a low ignition energy, can leak readily, and is commonly stored either as a high-pressure gas or as liquefied hydrogen at very low temperatures. Consequently, regulation must address not only the technical integrity of storage vessels but also licensing, site planning, emergency response, insurance, environmental protection, worker safety and compensation for third-party harm.

In India, this regulatory framework is developing through the interaction of the Gas Cylinders Rules, 2016; SMPV(U) Rules, 2016; Manufacture, Storage and Import of Hazardous Chemical Rules, 1989; Environment (Protection) Act, 1986; Public Liability Insurance Act, 1991; Factories legislation; and PESO approvals. PESO is the principal national authority dealing with safety aspects of compressed gases and hazardous substances. (Peso)

1. Nature of Hydrogen-Storage Risk

Hydrogen storage creates several distinct legal risks:

Fire and explosion — hydrogen can form flammable mixtures with air.

High-pressure failure — compressed hydrogen vessels can fail because of material degradation, over-pressure or mechanical damage.

Cryogenic hazards — liquefied hydrogen requires extremely low temperatures and specially designed containment.

Leakage — hydrogen's small molecular size makes containment particularly important.

Ignition and electrical hazards — equipment must be designed for hazardous environments.

Third-party harm — an accident can affect workers, neighbouring communities and property.

Environmental consequences — although hydrogen itself does not produce carbon emissions when burned, an industrial hydrogen facility may involve associated chemicals, cooling systems and contaminated firefighting water.

Transportation interface — storage facilities may receive hydrogen through pipelines, tube trailers or cryogenic tankers, creating additional regulatory responsibilities.

Modern technical standards recognise these characteristics. For example, ISO/TS 15916:2026 provides basic safety considerations for gaseous and liquid hydrogen systems and hydrogen storage, identifying hazards and risk considerations while leaving application-specific requirements to other standards. (ISO)

2. Licensing and Regulatory Control in India

A hydrogen storage facility cannot be treated simply as an ordinary warehouse. Depending upon the form and quantity of hydrogen and the equipment used, regulatory permissions can arise under the petroleum and explosives safety framework.

PESO administers responsibilities delegated under the Explosives Act, 1884 and Petroleum Act, 1934, together with rules concerning compressed gases and storage. Its mandate covers manufacture, possession, use, sale, transportation, import/export and storage of regulated hazardous substances. (Peso)

The Gas Cylinders Rules, 2016 are particularly relevant to hydrogen cylinders and cascades. PESO has also issued hydrogen-specific amendments and regulatory material. (Peso)

For larger pressure-vessel installations, the Static and Mobile Pressure Vessels (Unfired) Rules, 2016 [SMPV(U)] become important.

A particularly significant development is India's 2025 amendment concerning liquefied hydrogen. The rules specify, among other things, that liquefied hydrogen is to be stored in above-ground pressure vessels; storage vessels, pumps, vaporizers, dispensers, piping and fittings must be suitable for liquefied-hydrogen service; storage vessels cannot be installed within buildings or sheds; and prescribed safety distances must be maintained. (Peso)

Thus, hydrogen-storage regulation increasingly follows a facility-specific safety architecture, rather than relying upon one general hydrogen statute.

3. Safety Management Duties

The operator of a hydrogen-storage facility should maintain a comprehensive safety-management system covering:

A. Design safety

Storage vessels should be appropriately designed for:

pressure;

temperature;

hydrogen compatibility;

corrosion and embrittlement;

pressure relief;

emergency isolation;

ventilation;

leak detection;

fire protection; and

separation distances.

B. Inspection and testing

Regulation should ensure periodic examination of:

cylinders;

pressure vessels;

valves;

pressure-relief devices;

manifolds;

pipelines;

compressors;

dispensers;

electrical systems; and

emergency equipment.

C. Operational controls

Facilities should have procedures governing:

filling and unloading;

maintenance;

isolation;

hot work;

access control;

ignition-source management;

emergency shutdown;

hydrogen detection; and

personnel training.

D. Emergency planning

Emergency planning is particularly important because an uncontrolled hydrogen release may escalate rapidly into a fire or explosion.

The European Seveso III Directive, for example, requires operators covered by the major-accident regime to take all necessary measures to prevent major accidents and limit their consequences to human health and the environment. It expressly treats storage of dangerous substances as part of the regulated establishment framework. (EUR-Lex)

This provides a useful comparative model for hydrogen regulation.

4. Major-Accident Regulation

Where hydrogen quantities reach applicable thresholds, major-accident legislation can impose additional duties.

India's Manufacture, Storage and Import of Hazardous Chemical Rules, 1989 (MSIHC Rules) establish requirements concerning hazardous chemical management, accident reporting and emergency planning. (India Code)

The importance of this regime can be seen in Aryavart Foundation v. Yashyashvi Rasayan Pvt. Ltd. (2021). The case concerned a major industrial accident involving chemical storage, with hydrogen cylinders present at the facility. Investigations found issues concerning hydrogen-cylinder storage, including the absence of the required licence for storage of the hydrogen cylinder cascades. PESO subsequently took regulatory action. (Indian Kanoon)

Although the case was not exclusively about a hydrogen-storage accident, it demonstrates an important legal principle: possession and storage of hydrogen equipment without the required regulatory approval can itself become a significant compliance issue, independently of whether the hydrogen ultimately causes the accident.

5. Liability for Hydrogen-Storage Accidents

Liability may arise through several overlapping mechanisms:

5.1 Negligence

Traditional negligence requires proof of:

a duty of care;

breach of that duty;

causation; and

damage.

For example, failure to inspect a pressure vessel, maintain safety valves or control ignition sources may establish negligence if it causes foreseeable harm.

5.2 Strict liability

The traditional Rylands v. Fletcher principle imposes liability for certain dangerous accumulations escaping from land, subject to recognised exceptions.

However, Indian law has developed considerably beyond this approach.

5.3 Absolute liability

The landmark Indian doctrine is the Supreme Court's decision in:

M.C. Mehta v. Union of India, (1987) 1 SCC 395 — Oleum Gas Leak Case.

The Supreme Court held that an enterprise carrying on a hazardous or inherently dangerous activity owes an absolute and non-delegable duty to the community. If harm results from that activity, the enterprise may be absolutely liable, even where it argues that reasonable care was taken. (Indian Kanoon)

This doctrine is particularly relevant to hydrogen storage because industrial-scale hydrogen storage is inherently associated with significant fire, pressure and explosion risks.

The Court expressly distinguished this rule from the older Rylands principle and rejected the traditional exceptions applicable to strict liability. (Indian Kanoon)

6. Application of Absolute Liability to Hydrogen Storage

Suppose a hydrogen-storage operator:

has a defective storage vessel;

experiences a hydrogen leak;

the leaked hydrogen ignites;

neighbouring property is damaged; and

persons suffer injury.

Under ordinary negligence principles, victims might need to establish precisely how the operator breached its duty.

Under the M.C. Mehta principle, however, the central legal question becomes whether the harm resulted from the hazardous or inherently dangerous activity undertaken by the enterprise.

This is significant because accidents involving complex hydrogen systems can make it difficult for an injured person to identify the precise technical failure.

The Supreme Court reasoned that enterprises engaging in hazardous activities must internalise the social cost of accidents and that compensation should have a deterrent effect. (Indian Kanoon)

Therefore, hydrogen-storage operators should regard risk prevention, financial capacity and insurance as integral components of legal compliance, rather than merely commercial precautions.

7. Hydrogen-Specific Indian Case Law

A particularly relevant decision is:

Smt. Krishna Devi v. Haryana State Electricity Board (2001)

The case involved an accident at a facility where hydrogen gas was stored. The plaintiffs alleged negligence and argued that the operator should bear absolute liability because hydrogen storage constituted an inherently dangerous activity.

The court examined:

the hazardous nature of hydrogen;

plant design;

access restrictions;

safety measures;

the circumstances of the explosion; and

the alleged negligence of the deceased.

On the evidence, the court did not ultimately impose liability on the operator because it found that the relevant duty had been discharged and that the circumstances did not establish the defendant's negligence. (Indian Kanoon)

The case is important because it demonstrates that hydrogen's hazardous character does not eliminate the need to establish the legally relevant causal and factual circumstances in every claim. It also illustrates the importance of site security, plant design and evidence concerning the cause of the accident.

8. Public Liability Insurance

The Public Liability Insurance Act, 1991 is another important component of India's liability framework.

Its purpose is to provide immediate relief to persons affected by accidents occurring while hazardous substances are being handled. The Act defines "handling" broadly to include activities such as manufacture, processing, treatment, packaging, storage, transportation and use. (India Code)

The legislation was specifically enacted because victims of hazardous-industry accidents could otherwise face lengthy litigation before receiving compensation. It therefore adopts a no-fault mechanism for immediate relief, while preserving the possibility of pursuing larger compensation through other legal avenues. (India Code)

For hydrogen-storage operators, this creates two distinct concepts:

Regulatory safety liability → compliance with storage, pressure-vessel and safety requirements.

Public liability compensation → financial protection for persons affected by an accident.

These should not be confused. Insurance does not replace the operator's underlying safety obligations.

9. Environmental Liability

Hydrogen-storage accidents can also generate environmental claims.

For example, an industrial fire may require large quantities of water or firefighting chemicals, potentially carrying contaminants into drains, soil or water bodies.

In Aryavart Foundation v. Yashyashvi Rasayan Pvt. Ltd., the court considered environmental consequences following an industrial fire and examined issues concerning hazardous chemicals, regulatory violations and environmental damage. (Indian Kanoon)

Indian environmental jurisprudence also recognises the polluter-pays principle, meaning that an enterprise responsible for environmental harm may be required to bear the costs associated with remediation and compensation.

Consequently, a future hydrogen-storage liability framework should address not merely deaths and physical injuries but also:

property damage;

ecological damage;

contamination;

emergency response costs;

remediation;

restoration; and

long-term monitoring.

10. Constitutional Dimension

Hydrogen-storage regulation also has a constitutional dimension in India.

Article 21 jurisprudence has developed a right to protection of life and a healthy environment. The Supreme Court's hazardous-industry jurisprudence connects environmental protection with protection of human life.

The M.C. Mehta doctrine therefore has significance beyond ordinary private tort law. It establishes a public-law approach under which enterprises conducting hazardous activities must meet exceptionally high safety responsibilities. Recent Indian judicial decisions continue to cite the Oleum Gas Leak principle when considering liability for hazardous activities. (Indian Kanoon)

11. Allocation of Liability Among Different Actors

A modern hydrogen-storage project may involve:

Producer → transporter → storage operator → equipment manufacturer → maintenance contractor → dispenser/operator → customer.

An accident may therefore involve multiple potential contributors.

A comprehensive legal framework should distinguish:

Contractual allocation of risk is useful, but it should not be assumed that a private contract can eliminate statutory or absolute liability owed to third parties.

12. Key Case Laws

1. M.C. Mehta v. Union of India, (1987) 1 SCC 395

Established India's doctrine of absolute liability for hazardous and inherently dangerous activities. (Indian Kanoon)

2. Smt. Krishna Devi v. Haryana State Electricity Board (2001)

Directly relevant to an accident involving a hydrogen plant; demonstrates the importance of evidence concerning safety measures, access, causation and negligence. (Indian Kanoon)

3. Aryavart Foundation v. Yashyashvi Rasayan Pvt. Ltd. (2021)

Important for hazardous chemical storage, regulatory licensing, hydrogen-cylinder storage and environmental consequences of industrial accidents. (Indian Kanoon)

4. Indian Council for Enviro-Legal Action v. Union of India

Important for the polluter-pays principle and environmental remediation liability.

5. Rylands v. Fletcher (1868)

The classical English strict-liability foundation, subsequently distinguished and significantly extended by India's absolute-liability doctrine.

13. Emerging Legal Framework for Hydrogen Storage

A mature hydrogen-storage regime should integrate five layers:

Layer 1 — Licensing:
PESO and other applicable statutory approvals before construction and operation.

Layer 2 — Technical safety:
Pressure-vessel integrity, hydrogen-compatible materials, leak detection, fire protection and separation distances.

Layer 3 — Operational safety:
Training, inspection, maintenance, emergency procedures and incident reporting.

Layer 4 — Liability:
Absolute liability principles, statutory no-fault compensation, tort liability and environmental liability.

Layer 5 — Financial security:
Mandatory insurance, adequate financial capacity, compensation mechanisms and environmental remediation funds.

This layered model is increasingly important as hydrogen projects move from small industrial installations to large-scale storage facilities, hydrogen hubs, underground storage, liquefied-hydrogen terminals and integrated energy systems.

Conclusion

Hydrogen Storage Safety and Liability Regulation is fundamentally based on the principle that the economic benefits of hydrogen cannot be separated from responsibility for the risks created by storing it. Indian law already provides a substantial foundation through PESO regulation, pressure-vessel and cylinder rules, hazardous-chemical regulation, environmental legislation and the Public Liability Insurance Act.

The most important judicial principle is the absolute-liability rule established in M.C. Mehta v. Union of India. For enterprises conducting hazardous or inherently dangerous activities, the duty to protect the community is absolute and non-delegable, and compensation may be required even without conventional proof of negligence. (Indian Kanoon)

For hydrogen storage specifically, the future legal framework is likely to require increasingly detailed rules concerning high-pressure storage, liquefied hydrogen, underground storage, hydrogen embrittlement, emergency shutdown systems, safety distances, certification, third-party liability, mandatory insurance and environmental remediation. India's recent hydrogen-related amendments and PESO regulatory activity indicate that this framework is continuing to evolve. (Peso)