NEW DELHI: The steel ministry has roped in an in-house consultancy to explore the use of green hydrogen in the direct reduction of iron (DRI) and blast furnaces, the ministry told Moneycontrol when asked about its plans for decarbonising the sector.
Iron and steel is the most emissions-intensive industry and reducing its carbon footprint is vital to the government’s ambitious net zero target.
“… ministry of steel has appointed MECON as the scheme implementing agency (SIA) for the scheme. MECON has prepared the draft RFP, which is under consideration of ministry of steel,” it said in an emailed statement on June 5.
MECON operates under the steel ministry and provides a range of services, primarily in the fields of engineering, consultancy, and project management across sectors.
The ministry’s statement was referring to the government’s green hydrogen pilot scheme.
A few months ago, the ministry of new and renewable energy issued guidelines for green hydrogen pilots in the steel sector. The pilots to be implemented through the steel ministry received budgetary outlay of Rs. 455 crore till FY 2029-30.
Under the scheme, financial support is to be provided to promote three approaches to use hydrogen in iron and steel production.
These include the gradual substitution of natural gas with hydrogen in vertical shaft-based DRI, the injection of hydrogen into blast furnaces to decrease coal and coke consumption, and a pilot to produce DRI using 100 percent hydrogen in a consortium model.
The direct reduced iron (DRI) process is a method of producing iron without melting the ore. Instead, it reduces iron ore in its solid state using reducing gases, hence is less carbon intensive.
In 2023, the renewable energy ministry launched the National Green Hydrogen Mission to make India a global hub for production, use and export of Green Hydrogen and its derivatives.
“This is a priority project of the government with a step towards decarbonising the iron and steel sector,” the ministry added.
So far, 14 task forces have been set up by the ministry on different facets of more eco-friendly steel production, touching upon aspects such as raw materials, technology, and policy frameworks.
The steel sector accounts for about 12 percent of India’s carbon dioxide emissions, with an emission intensity of 2.55 tonnes of CO2 a tonne of crude steel (tCO2/tcs) compared with the global average emission intensity of 1.85 tCO2/tcs, according to the Institute for Energy Economics and Financial Analysis (IEEFA).
India aims for an annual production of 5 million metric tons of green hydrogen by 2030, which would cut about 50 million metric tons of carbon emissions and save more than $12 billion in fossil fuel imports.
The challenge, however, is that green hydrogen is more expensive to produce compared to the hydrogen made from fossil fuels, with a price difference of approximately $2 a er kilogram.
Renewable energy is not available continuously, and battery storage remains uneconomical.
Green hydrogen is the hydrogen generated from electrolysis of water, with the entire process based on renewable energy. It is being touted as the enabler of transition to sustainable energy.
Source: Money Control