India's Steel Sector Transformation with Green Hydrogen
Key Ideas
- India is investing in green hydrogen infrastructure to transition from carbon-intensive hydrogen production methods to renewable-powered green hydrogen through electrolysis.
- Green hydrogen presents a transformative opportunity for India to decarbonize its steel sector, which is a major emitter of global CO2 emissions.
- Integration of green hydrogen into steel production offers significant decarbonization opportunities across various stages of production, with a projected growth in green hydrogen demand.
- A comprehensive National Green Hydrogen Policy is suggested to address infrastructure costs, incentivize investments, and establish adoption targets for a greener future in steel production.
India is focusing on clean energy transition by investing in green hydrogen infrastructure to shift away from carbon-intensive hydrogen production methods towards renewable-powered green hydrogen produced through electrolysis. A report by Ernst & Young (EY)-Parthenon in collaboration with WWF-India highlights the potential for green hydrogen to transform India's steel sector, which is responsible for 7 per cent of global CO2 emissions. The report emphasizes that integrating green hydrogen into steel production offers a sustainable alternative to traditional methods, with applications across various production stages.
The projected growth in green hydrogen demand in the steel sector is expected to contribute significantly to decarbonization efforts, with the potential to reach 41 per cent of India's crude steel output by FY70. However, challenges such as feedstock availability and infrastructure requirements need to be addressed. The report stresses the importance of technological advancements and supportive policy frameworks in driving a shift towards greener steel production.
To achieve a 245 MMTPA H2-DRI capacity by 2070, substantial investments of USD 297-USD 304 billion are deemed necessary. The report suggests that falling green hydrogen prices will make it a viable alternative in steel production, although barriers to widespread adoption remain. Government incentives, production-linked schemes, tax breaks, and public-private partnership models are recommended to overcome these barriers.
The report advocates for a comprehensive National Green Hydrogen Policy to reduce renewable power costs, establish adoption targets, and attract investments. The National Hydrogen Mission (NHM) launched in 2021 aims to position India as a global leader in green hydrogen production, targeting five million metric tons of annual green hydrogen production by 2030. These initiatives signal a positive outlook for India's green hydrogen journey in the steel sector.
Topics
India
Renewable Energy
Clean Energy
Investment
Decarbonisation
Environmental Sustainability
Technology Advancements
Steel Industry
Policy Frameworks
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