IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1-Assessment and Management of Environmental and Social Risks and Impacts
E&S Policy and Management Systems
The company has established an ESG Policy and an Environmental and Social Management System (ESMS) covering its entire business operations, which is assessed to be appropriate to the nature and scale of their business and commensurate with the level of its environmental and social risks and impacts (for new and operating projects). The company’s ESG Policy is aligned to requirements of IFC PS 2012, World Bank Group (WBG) General Environment Health and Safety (EHS) Guidelines and the International Labour Organization (ILO) conventions. The company adopted the Industrial Quality Management Standards (IQMS) based on the ISO 9001 system. The ESMS of the company is in line with ISO 14001:2015 and ISO 45001:2018. Under the IQMS, Hygenco has established Operational procedures, Technical Standards (for all equipment and technology) and Emergency procedures. These are supported by subsidiary and project level documents. Connecting all these is a Knowledge Management System (KMS) that enables access of the tiered documents to all employees based on need-to-know controls.
Identification of Risks and Impacts
Hygenco identifies and manages key E&S risks and impacts associated with its operations through compliance with applicable national standards and regulatory permits. Standalone GH Projects and RE Projects (Solar and Wind) are exempted from prior environmental clearance (EC) under Indian laws, however for GH Projects within Hygenco’s industrial clients’ sites, the original EC of such client needs to be amended to include the GH Project. Consents to Establish and Operate are sought for all GH Project and RE Project sites of Hygenco by the project Special Purpose Vehicle (SPVs). Design of storage and handling operations of hydrogen are assessed by the regulatory authority and built based on permit conditions. The company has engaged an ISO 9001 certified compliance management company to periodically identify and track all its regulatory compliances and conditions. Other applicable regulatory requirements are addressed in the ESMS / EHS manuals of the company.
Based on its ESMS, the company carries out ESIA studies for its GH Projects and RE Projects outside notified/licensed industrial zones. E&S screening and impact assessment is carried out before selection of land in addition to project feasibility studies and Detailed Project Report (DPR). Hygenco’s ESG officer visits proposed sites, conducts screening and maintains records. The company has carried out ESIA’s for its RE projects in Maharashtra. Formal assessments are not carried out when GH Project facilities are located in notified/licensed industrial zones or within industrial client’s licensed premises.
Hygenco carries out HAZOP and SIL studies for process risk assessment for the GH Projects. The process risk assessment also addresses procedure for safe venting for industrial gases in GH projects and need for additional quantitative risk assessment studies, as relevant. Hazard Identification and Risk Assessment (HIRA) is developed for project and O&M activities. The company does not yet conduct specialized process safety studies such as Quantitative Risk Assessments (QRA) and Fire & Explosion Safety Risk Assessment, however, plans to do so as part of the ESAP.
To improve compliance with IFC PS1 and address the EHS risks and improve the process safety management in line with Good International Industry Practice (GIIP), the company will implement the following ESAP actions:
ESAP #1: Hygenco will establish and implement a procedure as part of its ESMS for conducting an EHS risk assessment, for the GH Projects and RE Projects, located on industrial client sites or standalone sites within notified/licensed industrial zones.
ESAP #2: (i) Hygenco will update and revalidate its procedure on HAZOP and SIL assessments post-commissioning of the GH Projects to reflect their as-built status, based on IFC’s suggestions and GIIP requirements; (ii) Hygenco will establish a procedure as part of its ESMS to conduct Quantitative Risk Assessment (QRA) and Fire & Explosion Safety Risk Assessment for GH Projects; (iii) Hygenco will establish a procedure in their ESMS for developing and implementing a quantitative risk assessment for piped transport of hydrogen.
Management Programs
Hygenco develops project specific EHS management plans to mitigate key E&S risks and impacts of the operations. The company conducts pre-startup safety review (PSSR) before commencing operations.
As part of its ESMS and EHS Manual, Hygenco has established standard operational procedures (SOPs) and work instructions for operations and maintenance activities. These procedures address process activities such as chemical handling, charging and storing; startup / shutdown and safety checks / inspections on unit operations of DM plants / electrolyzers; hydrogen and oxygen venting, leak testing and monitoring, preventive and breakdown maintenance such as solar panel and battery replacement, calibration of equipment, etc.
ESAP #3: Hygenco will develop and implement an asset integrity management (AIM) plan at the project design stage for safety critical equipment in the operations of the GH Projects. SOPs will be updated accordingly for site specific GH Project operations.
Organizational Capacity and Competency
The company has a corporate level ESG officer supported by a senior EHS associate for assisting in project / plant level coordination. This team is responsible at present for overseeing E&S activities / studies across all projects of Hygenco, compliance management as well as implementing EHS programs across all project sites. The company engages technical staff at its GH Projects with chemical and electrical engineering background that are regularly trained on operations and process safety based on training needs analysis and an approved training calendar.
ESAP #4: Hygenco will enhance its ESG/EHS team at both corporate and project sites in alignment with its current operations and upcoming projects. Dedicated resources with relevant industry experience and competencies, such as (i) process / fire safety officer and (ii) social officer will also be engaged as required for GH Projects and RE Projects.
Emergency Preparedness and Response Plan
Hygenco has documented site specific emergency response plans for all site level project operations. In case of GH Projects on client sites, Hygenco’s EPRP is integrated with the client’s system. The roles and responsibilities for various teams responsible for evacuation, rescue, firefighting etc. are defined and displayed at various locations across the facilities. Fire alarm call points, evacuation route maps and hose reels have been placed at many locations. The compliance team periodically conducts mock drills and internal audits to verify implementation of fire safety measures. Contractual workers are trained in fire safety and operation of fire safety equipment every month, including construction workers. The company will update its EPRP to address emergency response and communication during hydrogen transport.
Monitoring and Review
As part of its requirements under ESMS and EHS site manual, periodic EHS reviews / audits monitor resource consumption / efficiency, wastewater and waste generation and disposal, near misses, incidents, health and safety issues, etc. Monitoring is carried out periodically based on regulatory requirements as well as its management systems. Workplace noise, air emissions and ambient air quality and wastewater monitoring records for the sites visited were within the applicable national standards and relevant WBG General EHS guidelines.
As part of the project level EHS management, the company monitors key performance indicators (KPIs) such as record of injuries, work permits, L&FS measures, usage of personal protective equipment (PPE), energy and water consumption, waste generation covering construction and operations. The KPIs are reported on regular basis to the compliance management team. All incidents are summarized and discussed in the management meetings and the team analyses the root causes and implements corrective action.
PS2- Labor and working conditions
HR Policies, Working Conditions and Terms of Employment /
As of October 2024, Hygenco had 110 direct employees. The proportion of women in the Hygenco workforce was 10%, five contract employees (all male) and three consultants distributed in its Gurugram and Pune offices. Contracted employees in various projects are engaged in construction and operational phases based on the scale of the project and components. Additional employees and contractual labor will be engaged as new projects materialize.
Hygenco has established HR policies that are applicable to their employees, contractors, suppliers, and third party service providers. The policies cover anti-bribery, anti-corruption, code of conduct, contract labor working conditions, grievance redress (internal and external), non-discrimination and equal employment opportunity, diversity, freedom of association, human rights, leave, prevention of sexual harassment of women at workplace (POSH), retrenchment, separation, whistleblower, and prohibition of child and forced labor. The HR policies and procedures are consistent with the national regulations and requirements of IFC PS2. The HR department notifies all employees by email on Hygenco’s HR policies and makes these available on the company’s HR portal to all employees. Each staff receives a written contract that describes the working conditions and terms of employment, and an employee handbook is also provided. An overtime policy will be formalized as necessary for larger projects with a larger workforce requiring work across shifts and updated as part of strengthening company’s HR policies to align with IFC PS2. Periodic training is carried out for all employees and contractual staff on relevant HR policies at corporate level as well as project sites.
Workers Organization
The company has established a policy on freedom of association aligned to IFC PS2 and ILO’s declaration on fundamental rights and principles at work, including the freedom of association and right to collective bargaining. The policy applies to all its employees, contractors, interns, and employees of its subsidiary companies (projects). Currently no worker organization or labor unions are active at the Corporate or on any of the project sites.
GRM for Workers
Hygenco has established a corporate and external grievance redress policies that are applicable to its employees as well as other external stakeholders including contractual workers. The purpose of this policy is to put in place a process of receiving, recording, and resolving grievances from employees (on-roll and on-contract including those from vulnerable groups) and to ensure that feedback, concerns and grievances are handled appropriately in a fair and transparent manner, aligned with the Hygenco's policies. This policy lays down the process for registering a grievance, role of HR, grievance committee and redressal mechanism and includes anonymous complaints / grievances.
GRM procedures are included in related training and awareness campaigns conducted by the Human Resource (HR) department. Internal Complaint Committee (ICC) meetings are conducted based on complaints received. The company has not reported any POSH cases at corporate or project level in the last four years of operation. Minor complaints related to routine operational issues have been reported and resolved satisfactorily. The company has also established an external grievance redress mechanism that addresses concerns from all interested parties and external stakeholders.
Occupational Health and Safety (OHS)
The company has formulated an EHS policy and manual based on ISO 45001 standard including Hazard Identification and Risk Assessment (HIRA) and operational controls. On client sites the company follows the client’s OHS system whereas on their own sites, Hygenco’s OHS policy and procedures are applied. Hygenco has developed a training calendar for EHS and PS based on needs assessment, as part of the ESMS. Employee health checks are done annually as per local laws. For GH Projects, the operational team collects the incident statistics on monthly basis from each site. In the last 4 years of operation there have been no fatal or major reportable incidents. The company has established Key Performance Indicators (KPIs), that are tracked and reported to the management on a monthly basis.
For GH Projects, Hygenco carries out studies such as Hazard and Operability (HAZOP) and Safety Integrity Levels (SIL) analysis to identify and mitigate process safety risks. Improvements in process safety studies and additional studies required are detailed in ESAP #2.
Workers engaged by third parties
For most project sites, Hygenco engages local third party contractors for civil, mechanical and electrical works. Hygenco has developed ESG guidelines for vendors and contractors that are implemented for project construction and operations on the sites. Based on the visit to the GH Projects, observations were made related to registration of contractor under Building and Other Construction Workers (BOCW) Act, provision of Personal Protective Equipment (PPE), site housekeeping and EHS upkeep, implementation of work permit system, maintenance of incident register, display of emergency numbers, vertigo testing for labor working at height, dedicated waste storage area, etc. None of Hygenco’s present sites have labor accommodation on sites and labor is transported by the contractor daily from local areas.
Supply Chain
Hygenco employs third party agencies for construction of the project sites and has established a procedure for assessment and monitoring of vendors and contractors, as part of its ESMS. Hygenco is not yet conducting monitoring of construction contractors based on this procedure.
ESAP #5 – Hygenco will conduct third party EHS and labor compliance audits of construction contractors at two select upcoming project sites and implement corrective actions, including application of labor accommodation standards as relevant. The lessons learnt from these audits will be internalized for subsequent project site audits.
Primary suppliers to the company provide critical items like solar panels / modules, wind turbine generators (WTGs), electrolyzer, rectifiers, battery energy storage systems (BESS), Engineering, Procurement and Construction (EPC) vendors, etc.
The environmental and safety impact of technologies used in the GH Projects and RE Projects, during and post-use, is considered during evaluation of the technology. However, ESG guidelines and assessments are not being carried out for suppliers, at present. Hygenco maintains relationships for all major items with OEMs directly. For smaller or bulk items, the company transacts only with authorized sellers. A preliminary assessment of the current suppliers of Hygenco did not indicate any adverse observations related to reputational risk.
ESAP #6 – Hygenco will establish a procedure in their ESMS to conduct E&S evaluation of primary suppliers (technology and equipment) and develop criteria for their selection, evaluation, contracting and performance monitoring based on IFC PS2 requirements. The procedure will be applied to the current and future suppliers.
PS3-Resource Efficiency and Pollution Prevention
GHG Emissions
Diesel based DG sets on project sites are used on case-to-case basis to generate power during project construction phase. Hygenco uses renewable energy for all its hydrogen production projects. For project operations, renewable energy is sourced from the following options as relevant: a) captive RE on client’s site; b) captive RE owned and open access; c) third-party RE on open access through offtake agreements with private RE producers; and/or d) purchase from green energy market segments (e.g. GDAM) from licensed electricity exchanges (e.g. IEX).
Greenhouse gas (GHG) emissions inventory is expected to be very low for GH Projects and RE Projects as burning of fossil fuels is avoided, except for emergency backup power generation for auxiliary activities. GHG emissions are expected during hydrogen transport by road. Aligned with its sustainability policy, the company is continuously implementing initiatives of developing and adopting sub-technologies that improve water and energy efficiency on a regular basis. The company does not use R22 or other refrigerants that have been phased out.
Water
Raw water required for generation of hydrogen (to generate about 9 L of demineralized water per kg of H2) will be sourced from client or the local industrial corporation/authority or local water utility and treated onsite to required quality specifications. HGEPL does not use ground water in any of its projects. Licensed water sources are identified as part of project feasibility studies. As a policy, Hygenco does not use groundwater in GH Projects or RE Projects. Aligned with its sustainability policy, the company is implementing initiatives such as monitoring consumption intensity, dry cooling, rainwater harvesting, zero liquid discharge and reuse in facility, to reduce water consumption on a regular basis.
Air Pollution and Noise
While GH Project operations are based on renewable energy (solar, wind, hybrid), during construction, temporary electrical connection for projects may be sought from the client / local distribution company. GH Projects may be provided with a diesel generator for backup power during emergency situations with grid outages and to meet requirements of fire safety protection. Project sites do not have any high noise generating operations.
Although not a pollutant, oxygen produced as a byproduct in green hydrogen production can lead to explosive environments. At the GH Projects, oxygen is released through safely designed vent lines, where client offtake of oxygen is not applicable. The company has developed an operating procedure for safe venting of oxygen and identified safety controls.
Wastewater
Hydrogen generation involves a generation of small quantities of process wastewater in the form of spent lye from the electrolyzer, reject from RO / DM plant bed regeneration, blowdown from cooling tower, backwash and condensates. Most of this wastewater has low COD but high TDS. This high TDS wastewater is disposed either through a client’s disposal system or through third party disposal agencies authorized by the State. Hygenco attempts to follow Zero Liquid Discharge (ZLD) policy for its GH Projects, as practically feasible. The RE projects do not generate wastewater except for cleaning of solar panels which do not need specific treatment as it is not contaminated.
Currently, Hygenco’s project sites are regularly monitored to improve energy and water conservation.
Some of the key performance indicators (KPIs) monitored include rainwater harvesting, high TDS wastewater generation, operational energy efficiency, hydrogen generation as a function of water and energy consumption.
Wastes
The company has hazardous and non-hazardous waste management procedures including a system of appropriate sorting, handling, storage and disposal which are consistent with applicable legal requirements. All hazardous and non-hazardous waste are collected for disposal by authorized public service agencies specializing in each type of waste. Hazardous waste such as used / spent oil, spent resin from ion exchange in water treatment and potassium hydroxide (KOH) lye are generated on a periodic basis and disposal is carried out either through client’s hazardous waste disposal system or through authorized agencies based on the project location. The company has established systems to identify, manage and dispose electrical and electronic waste from RE projects and battery storage systems in GH Projects based on National and State level regulations.
Hazardous Materials Management
Electrolyzers use KOH as the primary electrolyte media. SOPs have been established by Hygenco for safe handling and storage of KOH. Oxygen generated along with hydrogen, is also a hazardous material.
There are few chemicals (such as acids, alkali, liquid alkaline solution of potassium hydroxide, etc.) used in the production of hydrogen. Hygenco has established standard operating procedures (SOPs) for storage, handling, use and disposal of hazardous chemicals and related wastes. Industrial sheds, technology or other equipment used in green hydrogen production do not use asbestos or any other construction materials harmful to life. Other safety operational controls such as hydrogen leak detection, safe venting procedure for hydrogen and oxygen have also been provided.
PS4-Community Health, Safety and Security
Infrastructure and Equipment design and safety
Hygenco carries out evaluation of technology on EHS aspects such as construction materials and chemical usage. HAZOP studies are carried out and recommendations are implemented during design and execution phases considering health and safety risks. Statutory certifications are sought for critical process equipment to qualify their fitness; as applicable as well as internal predictive maintenance policies. Hygenco also undertakes stress testing studies for fitness of process equipment using competent and certified process safety vendors as per local regulations. The facilities manager for each site is trained on statutory requirements as applicable. Industrial buildings are constructed and maintained based on applicable regulation. Design safety provisions are incorporated from applicable standards of American Petroleum Institute (API), International Organization for Standardization (ISO) and relevant Indian regulations.
Hazardous Material Management and Safety
GH Projects of Hygenco are largely located within existing notified/licensed industrial zones and no significant additional impacts on the health, safety and security of the local community are expected. For GH Project facilities located in non-notified/licensed industrial zones, ESIA studies carried out by the company identify any risks and impacts related to community health and safety impact. QRAs and HAZOPs are carried out for each project of the company to address process safety. In one of the GH Projects visited by IFC team, community around the GH Project were informed of the risks of hydrogen generation / storage and precautions to be taken. They were also made aware of the EPRP and actions to be taken. Hygenco follows standard operating procedures (SOPs) for road transport of hydrogen including journey risk assessment, periodic driver training, speed limitation and control, live-GPS tracking and pre-designated safe vehicle parking and resting spots. Company’s ESMS will include a procedure to identify and assess the safety risks related to hydrogen transport through pipelines as discussed under ESAP#2 above.
Security
All third-party security agencies engaged by Hygenco on their project sites are compliant with national laws. None of the security personnel at any project sites are armed. Security personnel are included in periodic training related to code of conduct, Gender Based Violence and Harassment (GBVH), emergency response, traffic and vehicle management.
PS5-Land Acquisition and Involuntary Resettlement
Hygenco acquires or leases land for its GH Projects and RE Projects (if applicable). For GH Project facilities on client sites, the pre-licensed land is provided by the clients on long-term lease within their area. For GH Project facilities in notified/licensed industrial zones, land is primarily on long term lease from the relevant industrial corporation/authority. For GH Project facilities in non-notified/licensed industrial zone, land may be acquired or leased by Hygenco for its projects on a case-to-case basis.
Based on its policy, the company follows a Willing Seller Willing Buyer (WSWB) model for land acquisition. The company has developed a land selection process that screens out options with significant environmental and social risks including land and compensation related issues.
Based on Hygenco’s ESMS, IFC PS5 could be triggered in future projects, in case WSWB model is not feasible. The ESMS does not include at present a procedure on land acquisition and involuntary resettlement following IFC PS5. The company currently does not conduct post-acquisition audits to check if due process was followed based on WSWB or IFC PS5 requirements for projects.
ESAP #7 – (i) Hygenco will develop a Land Acquisition and Resettlement Framework (LARF) in its ESMS based on IFC PS5. The LARF will be triggered for acquiring land parcels, develop & implement a resettlement action plan and a livelihood restoration plan, where WSWB approach is not feasible: (ii)
Hygenco will conduct internal due diligence audit for projects before land is acquired on a willing seller willing buyer (WSWB) basis to establish that land markets or other opportunities for the productive investment of the sales income exist, the transaction took place with the seller’s informed consent; and that the seller was provided with fair compensation based on prevailing market values.
