The government of India has recently issued guidelines for pilot projects to use green hydrogen in the steel sector under the National Green Hydrogen Mission (NGHM). The aim is to gradually replace fossil fuels and feedstock with green hydrogen and its derivatives, and to develop the necessary infrastructure and supply chains for green hydrogen production and utilization in the hard-to-abate iron and steel industry.
Green hydrogen is hydrogen produced from renewable energy sources, such as solar, wind, or hydro power, through electrolysis of water. It is considered a clean and sustainable alternative to fossil fuels, as it does not emit any greenhouse gases or pollutants when used. Green hydrogen can be used as a fuel or a feedstock for various industrial processes, such as steelmaking, refining, fertilizers, chemicals, and transportation.
The steel sector is one of the largest consumers of energy and emitters of carbon dioxide in India, accounting for about 18% of the country’s total energy consumption and 25% of its carbon emissions. The sector is also expected to grow significantly in the coming years, as India aims to increase its steel production capacity from 142 million tonnes per annum (MTPA) in 2020 to 300 MTPA by 2030.
The use of green hydrogen in the steel sector can help reduce its carbon footprint and enhance its competitiveness in the global market. According to the guidelines issued by the Ministry of New & Renewable Energy (MNRE), three areas have been identified as thrust areas for the pilot projects in the steel sector:
- Use of hydrogen in direct reduced ironmaking process: This involves using hydrogen as a reducing agent instead of natural gas or coal to produce sponge iron, which can then be used in electric arc furnaces or induction furnaces to produce steel.
- Use of hydrogen in blast furnace: This involves injecting hydrogen along with pulverized coal or coke into the blast furnace to reduce the amount of carbon monoxide and carbon dioxide produced during ironmaking.
- Substitution of fossil fuels with green hydrogen in a gradual manner: This involves blending a small percentage of green hydrogen with fossil fuels or feedstock used in various stages of steel production, such as reheating furnaces, rolling mills, annealing furnaces, etc., and increasing the blending proportion progressively with improvement in cost-economics and advancement of technology.
The guidelines also note that upcoming steel plants should be capable of operating with green hydrogen, thus ensuring that these plants are able to participate in future global low-carbon steel markets. The scheme will also consider greenfield projects aiming at 100% green steel.
The scheme will be implemented with a total budgetary outlay of Rs. 455 crores till FY 2029-30. The use of green hydrogen and its derivatives in the steel sector, through the proposed pilot projects, will lead to the development of a green hydrogen ecosystem in the steel sector, resulting in establishment of a green hydrogen value chain from production to end-use.
The National Green Hydrogen Mission was launched on 4th January 2023 with an outlay of Rs. 19,744 crores up to FY 2029-30. It will contribute to India’s goal to become self-reliant through clean energy and serve as an inspiration for the global clean energy transition.