Can H2 Replace Coal to Power the Green Steel Revolution?

Hydrogen-Based Steelmaking in India: Can H2 Replace Coal to Power the Green Steel Revolution?

Introduction: The Global Shift to Hydrogen-Based Steelmaking

The global steel industry is undergoing a transformation. Countries like the European Union and Japan are aggressively moving towards hydrogen-based steelmaking as part of their decarbonization strategies. The shift is driven by the urgent need to cut carbon emissions, with the steel sector accounting for nearly 7-9% of global CO₂ emissions.

For India, the world’s second-largest steel producer, embracing hydrogen steelmaking is not just an option—it’s a necessity. The country aims to achieve net-zero emissions by 2070, and cleaning up its steel sector is critical to this goal. But can India replace coal with hydrogen and usher in the era of green steel?

India’s Challenge: Coal Dependency in Blast Furnaces

Steel production in India is heavily dependent on coal-based blast furnaces, accounting for nearly 70% of total steel output. Traditional blast furnace-basic oxygen furnace (BF-BOF) routes rely on coking coal to reduce iron ore into molten iron, releasing vast amounts of CO₂.

The key challenges of this coal dependency include:

High Carbon Emissions: Coal-based steelmaking remains one of the largest industrial carbon polluters in India.
Energy Security Concerns: India imports nearly 85% of its coking coal, making the sector vulnerable to price fluctuations.
Global Market Pressure: As countries implement carbon border taxes, Indian steel faces competitiveness risks if it remains carbon-intensive.

For India to stay competitive and meet climate commitments, a hydrogen-based alternative must be explored.

The Opportunity: Direct Reduction & Hydrogen Adaptation

A promising solution lies in Direct Reduction (DR) plants, which use natural gas or hydrogen to reduce iron ore into Direct Reduced Iron (DRI). India already has the world’s largest DRI production capacity, making it well-positioned for a transition to hydrogen steelmaking.

Paul Wurth’s strategy provides a relevant example—by adapting DR technology to run entirely on green hydrogen, the steelmaking process can become 100% fossil-free. Indian steelmakers can leverage this model to scale up hydrogen-based DRI and integrate it with Electric Arc Furnaces (EAFs), which offer a cleaner alternative to traditional blast furnaces.

Hurdles to Hydrogen Steelmaking in India

While the opportunity is clear, several challenges remain:

1. High Cost of Green Hydrogen Production

Green hydrogen costs $4-6 per kg in India, significantly higher than the $1-2 per kg needed for economic viability.
Scaling up electrolyzer technology and using renewable energy can help bring costs down.

2. Infrastructure Gaps

India lacks the necessary hydrogen storage, transportation, and distribution networks.
Massive investments in pipeline infrastructure and hydrogen hubs are needed.

3. Scalability and Industrial Adoption

Existing DR plants need modifications to run entirely on hydrogen.
Industrial-scale demonstration projects are required to prove economic feasibility.

Case Study: Tata Steel & JSW’s Hydrogen Steelmaking Initiatives

Leading Indian steelmakers are already taking steps to explore hydrogen-based solutions:

Tata Steel has initiated pilot projects at its Jamshedpur plant, testing hydrogen injection in blast furnaces.
JSW Steel has partnered with renewable energy firms to explore green hydrogen integration in steel production.
Government-backed R&D programs and industry collaborations are accelerating feasibility studies.

These efforts highlight India’s commitment but also underscore the need for policy support and financial incentives to scale up hydrogen steelmaking.

Policy Support & Investment

For hydrogen steelmaking to take off in India, strong policy measures are required. Key initiatives that can support this transition include:

Production-Linked Incentive (PLI) Schemes
- Expanding incentives for green hydrogen production and electrolyzer manufacturing.
National Green Hydrogen Mission
- The ₹19,744 crore ($2.3 billion) initiative aims to cut green hydrogen costs and build infrastructure.
Carbon Pricing & Green Public Procurement
- Implementing a carbon pricing mechanism will make green steel more competitive.
- Government mandates for using low-carbon steel in infrastructure projects can drive demand.

FAQ: Is Hydrogen Steelmaking Viable for India by 2030?

Q: Can India realistically transition to hydrogen-based steelmaking by 2030?

A: Achieving large-scale hydrogen steel production by 2030 will be challenging but not impossible. Key factors that will determine viability include:

Cost reductions in green hydrogen production (targeting $1-2/kg by 2030).
Rapid expansion of hydrogen infrastructure and DR plants.
Policy interventions to incentivize industrial adoption.
Global collaborations for technology transfer and investment.

With the right mix of innovation, policy, and industry action, India can pave the way for a hydrogen-powered steel revolution, ensuring both economic growth and climate resilience.

Conclusion

India stands at a crucial juncture—either continue with carbon-heavy steelmaking or embrace hydrogen as the fuel of the future. By leveraging its existing DR capacity, investing in green hydrogen, and fostering strong policy support, India can emerge as a global leader in green steel. The time to act is now.