Indian energy minister offers more subsidies for green hydrogen-based steel

India’s minister for new and renewable energy, Raj Kumar Singh, yesterday told a meeting of government and industry representatives from the iron and steel sector that subsidies for the use of green hydrogen could be increased beyond the 4.55 billion rupees ($54.7m) already allocated, if necessary.

Steelmaking, which accounts for 7% of global emissions and around 12% of India’s CO₂, currently depends on coal-fired blast furnaces to smelt iron ore.

However, hydrogen can be used to directly reduce iron, which can then be processed via electric arc furnaces run on clean power to produce steel with almost zero emissions.

“Our idea is to help you to transition. If we use green hydrogen, then carbon content becomes low; so, we need to think of ways and means of doing that,” Singh said, adding that “some manufacturers have already begun to experiment using green hydrogen in [the] steel sector”.

Indian steelmaker JSW last year disclosed plans to build a 3,800-tonnes-a-year green hydrogen pilot plant in Rajasthan to supply its Vijayanagar steelworks in Karnataka, although it has not yet disclosed how this H₂ will be transported over the 1,600km distance between the two sites.

However, while Singh outlined the amount of funding for green steel available through the hydrogen pilots programme in September, an exact mechanism for how this will be allocated is yet to be published.

“The idea of this meeting is to decide the avenues in which the funds can be channelled to accelerate this transition, through a transparent selection process which also addresses the technology gaps which need to be addressed,” he said.

The minister had last year suggested that a mandate for industries, including steel, to use renewable hydrogen is on the table, although discussions with other affected ministries are ongoing.

Green steel production is said to be one of the most efficient uses for clean hydrogen, in terms of the emissions reduction per kg of H₂, and is also a potential export product for regions able to produce extremely cheap H₂ — instead of trying to ship the molecule either directly or through carriers.