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Green Hydrogen Gets a Shot in the Arm: India Paves Way for Steel Decarbonization

13 Feb 2024

Blending, Innovation, and Support for SMEs: A Multi-Pronged Approach to Cleaner Steel Production

Key Takeaways:

  • Government Announces Scheme and Budget: Rs 455 crore allocated for pilot green hydrogen projects in the steel sector under National Green Hydrogen Mission (NGHM).

  • Focus on Blending and Innovation: Supports blending green hydrogen in existing processes and development of new technologies.

  • Addressing High Costs: Initiative initially targets limited green hydrogen use, scaling up as economics improve.

  • Multiple Pathways Supported: Scheme covers hydrogen use in direct reduced iron (DRI), blast furnaces, and other innovative methods.

  • Global Context: Announcement aligns with India's LEAD-IT partnership with Sweden and global push for green steel production.

  • Domestic Initiatives: Companies like Tata Steel and ArcelorMittal Nippon Steel India explore hydrogen adoption.

  • Emphasis on Small and Medium Enterprises: Guidelines consider supporting technological innovation and fuel switching in smaller DRI-EAF units.

  • Long-Term Vision: While current focus is on BF-BOF route, green hydrogen holds promise for future steel production in India.

  • Call for Demand-Based Incentives: Experts suggest government involvement to accelerate green hydrogen adoption through public procurement initiatives.

India's steel sector, a major contributor to greenhouse gas emissions, is taking a significant step towards decarbonization with the government's announcement of a Rs 455 crore scheme for pilot green hydrogen projects. This initiative, part of the NGHM, marks a crucial move towards cleaner steel production and aligns with India's global commitments.

Key Features of the Scheme:

  • Supports blending green hydrogen in existing processes like DRI and blast furnaces.

  • Encourages development and validation of new hydrogen-based technologies for the steel industry.

  • Offers flexibility for exploring various innovative approaches to reduce emissions.

  • Considers providing support to small and medium enterprises in the sector.

Challenges and Opportunities:

  • High cost of green hydrogen is a hurdle, addressed by the initial focus on blending and gradual scaling up.

  • Transition from the coal-based DRI sector to cleaner alternatives requires technological advancements and supportive policies.

  • Demand-side incentives like public procurement of green steel can accelerate adoption.

The green hydrogen initiative, along with ongoing domestic efforts by steel companies, demonstrates India's commitment to a cleaner future. Continued progress in this direction will require not only technological innovation but also supportive policies and market mechanisms. By addressing these challenges, India can position itself as a leader in green steel production, contributing to global climate goals and ensuring a sustainable steel industry for the future.

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