India is inviting proposals for pilot projects on using hydrogen in the iron and steel sector, drawing on funding from the National Green Hydrogen Mission.
MECON, the Scheme Implementing Agency (SIA), has uploaded the Request For Proposal (RFP) for hydrogen injection in DRI pilot plants fully using hydrogen, existing blast furnaces to reduce coal/coke consumption and existing DRI vertical shafts to partially substitute natural gas and maximise hydrogen.
For the first one, funding will be up to 70% of the total project cost (excluding cost of production of hydrogen and land). For schemes B and C, regarding injection of hydrogen in existing plant, funding will be up to 50% of the capital cost excluding cost of production of hydrogen and land.
The National Green Hydrogen Mission, launched on 4th January 2023 with an outlay of Rs. 19,744 Crore, aims at to make India a global hub for production, usage and export of green hydrogen and its derivatives. A budgetary outlay of Rs. 455 crore has been allocated for the steel sector under the Mission until 2029-30.
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.
Provision of carbon credits and imposition of market barriers on carbon intensive steel, in some countries, is likely to further enhance the viability of green hydrogen in steel making processes.
Pilot projects will be implemented through the Ministry of Steel (MoS) and SIA.
Bidders may indicate the consumption of hydrogen on per annum basis for their selected scheme(s). Click here for more details.
India’s steel industry contributes to around 2% of GDP, according to the Institute for Energy Economics and Financial Analysis (IEEFA). In the fiscal year (FY) 2023, the production of finished steel in India was 122.3 million tonnes, an increase of about 7.6% over the previous year. The sector accounts for about 12% of India’s carbon dioxide (CO2) emissions, with an emission intensity of 2.55 tonne of CO2/tonne of crude steel (tCO2/tcs) compared with the global average emission intensity of 1.85 tCO2/tcs.
IEEFA reports the steel industry is responsible for around 240 million tonnes of CO2 emissions annually and we expect this to double at an exponential rate by 2030, considering the Indian government’s infrastructure development targets.
On the new lower intensity technologies, it says the green hydrogen-based route is the cleanest method of producing steel.
“However, green hydrogen is expensive and investing in the technology could render steelmakers uncompetitive as they sell a highly commoditised product,” it notes.
“For Indian steelmakers to switch from coal-based steelmaking to hydrogen-based steelmaking, the cost of green hydrogen needs to reduce and there needs to be a price penalty on carbon emissions.”
Yesterday (June 13), Tata Steel and Australia’s Monash University signed a Memorandum of Understanding (MoU) to set up a Centre for Innovation on Environment and Intelligent Manufacturing to collaborate on decarbonisation, resource recovery from sustainable sources, and technologies for advanced, additive, and data-driven manufacturing.
Tata Steel, targeting Net Zero by 2045, has an annual crude steel capacity of 35 million tonnes per annum (Mtpa). Its Jamshedpur Plant is the first site in India to receive ResponsibleSteelTM certification, and two LNG-based trailers were recently introduced at its Khopoli plant, transporting finished products from its downstream plant.