India is making significant strides in the green energy sector, with a focus on utilizing hydrogen in the iron and steel industry. The country has called for proposals for pilot projects that aim to incorporate hydrogen in various processes within the sector, with funding available through the National Green Hydrogen Mission.
The Request For Proposal (RFP) outlines potential pilot projects, such as using hydrogen in direct reduced iron (DRI) pilot plants, existing blast furnaces, and DRI vertical shafts. The funding for these projects can cover up to 70% of the total project cost, excluding the production cost of hydrogen and land expenses.
The National Green Hydrogen Mission, which was launched in January 2023, has allocated a substantial budget for the steel sector to promote the production and usage of green hydrogen. With the decreasing costs of renewable energy and electrolysers, it is anticipated that green hydrogen-based steel production can become more cost-competitive in the coming years.
Furthermore, the implementation of carbon credits and market restrictions on carbon-intensive steel production in certain countries could enhance the viability of green hydrogen in steel manufacturing processes.
Indian steel industry currently contributes to about 2% of the country’s GDP, according to the Institute for Energy Economics and Financial Analysis (IEEFA). With around 12% of India’s CO2 emissions coming from the sector, there is a growing need to adopt cleaner technologies like green hydrogen to reduce the environmental impact.
The announcement of the pilot projects in the steel sector comes as Tata Steel, one of the leading steel producers in India, signed a partnership with Monash University to focus on decarbonization and advanced manufacturing technologies. With these initiatives, India is taking proactive steps towards a more sustainable and environmentally friendly future in the steel industry.
