India Launches Green Steel Pilot Projects Using Hydrogen

An ambitious tender for green steel pilot projects utilising hydrogen: A budget allocation of ₹4.55 billion ($54.4 million) up to 2030.

Diverse Approaches to Green Steel Production:

The auction details three types of steelmaking pilots that the government will support:

• 100% Hydrogen-Based Direct Reduced Iron (DRI) Production
• Hydrogen Injection in Existing Blast Furnaces aims to reduce coal consumption
• Blending Hydrogen with Natural Gas in Existing DRI Plants involves gradually displacing fossil fuels

While the government will support implementing these projects, no public funds will be allocated for the production of hydrogen itself.

Initial hydrogen requirements must be fulfilled using any source, but the final implementation will mandate green hydrogen usage.

This adaptability allows for the temporary use of hydrogen produced from natural gas without carbon capture, damage and storage.

Funding and Project Criteria:

For 100% hydrogen-based DRI pilots, the Indian government covers 70% of eligible costs and the other two projects will receive 50%, excluding the cost of hydrogen production and land utilised for all projects.

Companies are restricted to bidding on one project per pilot type.

Applications will be assessed based on the below-given criteria:

• The amount of green iron or steel the proposed plant can produce.
• The volume of hydrogen required per tonne of product.
• The overall cost of the facility.
• The amount of funding sought.

There is no strict deadline for the start-up of these pilot projects, though the budget is approved and will be provided up to the beginning of the next decade.

Role of MECON and Ministry of Steel:

MECON, the Scheme Implementing Agency (SIA), has issued a Request for Proposal (RFP) for these pilot projects. Bidders need to account for hydrogen production costs and indicate their annual hydrogen consumption.

These pilot projects will be implemented under the oversight of the Ministry of Steel (MoS) and the SIA, ensuring they align with national objectives for sustainable development.

JSW’s Pioneering Green Hydrogen Plant:

Indian steelmaker JSW’s energy subsidiary has initiated work on the country’s first green hydrogen plant for steelmaking.

This plant is located at Vijayanagar and is expected to produce 3,800 tonnes of hydrogen annually from its commissioning till the last quarter of 2025.

Government’s Broader Hydrogen Vision:

India’s Ministry of New & Renewable Energy (MNRE) announced plans to use green hydrogen in the shipping and steel sectors with a combined investment of ₹570 crores ($68.6 million).

This underscores the government’s commitment to integrating green hydrogen into various industrial sectors towards a sustainable and low-carbon economy.

Byline: Vidhathri Matety