Green Hydrogen in Steelmaking
Green hydrogen production for steelmaking in India is currently expensive, costing nearly double compared to conventional methods. However, costs are expected to decrease significantly by 2030 due to economies of scale and technological advancements, as per EY India.
Challenges in Transitioning to Green Steel
- High Costs: Green hydrogen is priced at approximately $4–5 per kilogram, making low-carbon methods economically unviable without subsidies or carbon pricing.
- Infrastructure Gaps:
- Insufficient hydrogen storage and distribution networks.
- Weak scrap collection systems.
- Scarce natural gas pipelines.
Technological Advancements
The National Green Hydrogen Mission and other incentives are promoting the adoption of hydrogen-based Direct Reduced Iron (DRI), Electric Arc Furnace (EAF), biochar use, and Carbon Capture, Utilisation and Storage (CCUS) technologies.
Steel Decarbonisation Roadmap
These technologies are part of India's steel decarbonisation roadmap, which aims for net-zero emissions in the steel sector by 2070 while ensuring energy security and industrial competitiveness.
Market Pressures and Mindset Inertia
Companies often hesitate to adopt costlier, unfamiliar technologies unless influenced by external forces like the EU's Carbon Border Adjustment Mechanism (CBAM) and internal policy support such as the National Green Hydrogen Mission.
Partial Substitution as a Near-Term Step
Experts suggest that partially substituting coal or fossil fuels with green hydrogen in existing furnaces can reduce carbon dioxide emissions by 20–30% in the near term, without the need for a complete infrastructure overhaul.