India takes baby steps in Green Steel Production

As part of the National Green Hydrogen Mission, the Indian Government has sanctioned three pilot projects for the use of Hydrogen in steel production.

Steel production is one of the potential sectors where Green Hydrogen can replace fossil fuels. With the falling costs of renewable energy and electrolysers, it is expected that Green-Hydrogen-based steel can become cost-competitive over the next few years.

The provision of carbon credits and imposition of market barriers on carbon-intensive steel, in European regions, is likely to enhance the viability of Green Hydrogen-based steel.

Considering the higher costs of Green Hydrogen at present, Steel plants can begin by blending a small percentage of Green Hydrogen in their processes. The blending proportion can be increased gradually as cost economics improves and technology advances.

Earlier the Ministry of New and Renewable Energy had issued guidelines for the Implementation of Pilot projects in the Steel Sector under this Mission. The objectives of the scheme were to identify advanced technologies for utilizing green hydrogen in steelmaking through pilot projects.

Further, upcoming steel plants should be capable of operating with Green Hydrogen. This would ensure these plants can participate in future global low-carbon Steel markets.

These pilot projects can demonstrate safe and secure operations of green hydrogen-based steel-making processes, validating technical feasibility and performance, and evaluating their economic viability thereby leading to low-carbon iron and steel production.

To assess the potential for the use of Green Hydrogen in the steel industry, the Mission supports the setting up of pilot projects in the steel sector. These pilot projects will be implemented through the Ministry of Steel (MOS) and the Scheme Implementing Agencies (SIAs) as elaborated under this scheme.

The focus areas under this scheme for providing support for the utilization of hydrogen in the steel sector, are as follows:

1. Pilot project to produce direct reduction process (DRI) using 100 percent Hydrogen using a vertical shaft. Steel made using a direct reduction process is comparatively energy efficient as it requires significantly less fuel than a traditional blast furnace.

2. The Use of Hydrogen in Blast Furnaces to reduce coal or coke consumption.

3. Injection of Hydrogen in vertical shaft-based DRI-making unit.

Based on the evaluations of the proposals received, the Ministry of New and Renewable Energy has sanctioned a total of three pilot projects in the steel sector –

(a) Matrix Gas and Renewables Ltd (Consortium members: Gensol Engineering Ltd, Indian Institute of Technology Bhubaneswar, Metsol AB, Sweden) with pilot plant capacity 50 ton-per-day (TPD)

(b) Simplex Castings Ltd (Consortium member: BSBK Pvt. Ltd., Ten Eight Investment, IIT Bhilai) with a pilot plant capacity of 40 TPD

The total financial support made available will be Rs. 347 Crore (~US$ 43 million) from the Government of India. These pilot projects are likely to be commissioned in the next 3 years, paving the way to the scaleup of such technologies in India.

However, India’s leading steel manufacturing company, TATA Steel has already set the ball rolling in October 2023 with a low-carbon green steel plant in Ludhiana. The company plans to invest Rs. 2,600 crores (~US$ 305 million) in the first phase of the project and is expected to be commissioned by March 2025.