India's Green Hydrogen Initiative for Steel Sector: Funding and Implementation Guidelines
Key Ideas
  • The Ministry of New and Renewable Energy in India issued Scheme Guidelines for implementing Pilot projects using Green Hydrogen in the Steel Sector to reduce carbon emissions and promote sustainability.
  • Pilot projects will be supported for technology replication in steel manufacturing, overseen by the Ministry of Steel and accompanied by transparent selection frameworks.
  • Funding for projects will cover capital equipment but not hydrogen production costs, with a total budgetary outlay of INR 455 crore until 2029-30.
  • Entities eligible for funding include public and private sector undertakings, research institutions, and joint ventures, with disbursement of funds based on project milestones.
The Ministry of New and Renewable Energy in India introduced the 'Scheme Guidelines for implementation of Pilot projects for use of Green Hydrogen in Steel Sector' to encourage the adoption of green hydrogen as an eco-friendly energy source. The initiative aims to enhance energy efficiency and sustainability in steel manufacturing processes by reducing carbon emissions. The scheme primarily focuses on funding capital equipment necessary for integrating green hydrogen technology into iron and steel production processes. However, costs related to hydrogen production and land will not be covered by the scheme's financial assistance. The total budget allocated for implementing these pilot projects is set at INR 455 crore until the financial year 2029-30. The implementation approach includes selecting entities through calls for proposals issued by the Ministry of Steel and the respective Sectoral Implementing Agencies (SIAs). Eligible entities for funding encompass a wide range, from public and private sector undertakings to research institutions and joint ventures. The funding for approved projects will not exceed 50% of the total project cost, with the possibility of an increase to 70% for specific entities subject to PAC approval. Moreover, the disbursement of funds will follow a structured approach, with 20% issued upon award, 70% based on project milestones, and the remaining 10% upon project completion. The process also entails stringent monitoring by the Project Approval Committee (PAC) to ensure that projects adhere to the objectives and provisions outlined in the scheme. The Scheme for Steel Sector highlights the importance of safeguarding intellectual property rights that may arise from the funded projects, with guidelines to be issued by the Ministry of Steel. Overall, this initiative signifies a positive step towards fostering green hydrogen adoption in the Indian steel industry and promoting sustainable practices.
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