The Ministry of New & Renewable Energy (MNRE) has issued guidelines to undertake pilot projects for use of Green hydrogen in the steel sector. Named as "Scheme Guidelines for implementation of Pilot projects for use of Green Hydrogen in the Steel Sector under the National Green Hydrogen Mission," the guidelines will be implemented along with other initiatives to replace fossil fuels and fossil fuel-based feedstock with Green Hydrogen and its derivatives.
These pilot projects will be implemented through the Ministry of Steel and the implementing agencies nominated under the scheme. The scheme will be implemented with a total budgetary outlay of ₹455 crores till FY 2029-30.
Three areas have been identified as thrust areas for the pilot projects in the steel sector, namely: use of Hydrogen in Direct Reduced Ironmaking process; use of Hydrogen in Blast Furnaces and substitution of fossil fuels with Green Hydrogen in a gradual manner. The scheme will also support pilot projects involving any other innovative use of hydrogen for reducing carbon emissions in iron and steel production.
The scheme envisages that considering the higher costs of Green Hydrogen at present, steel plants could begin by blending a small percentage of Green Hydrogen in their processes, 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 use of Green Hydrogen and its derivatives in the steel sector, through the proposed pilot projects, aims to lead to the development of necessary infrastructure for use of Green Hydrogen in the iron & steel industry and establish a Green Hydrogen ecosystem in the steel sector.
The utilisation of green hydrogen in the steel industry is expected to increase over the years, with the expected reduction in its production cost. The National Green Hydrogen Mission was launched on January 4, 2023, with an outlay of ₹19,744 crores up to FY 2029-30.
