06 · GS-III: Industrial Decarbonization, Steel Sector & Green Hydrogen
Decarbonizing Primary Steel Production: Green Hydrogen DRI, Electric Arc Furnaces and National Green Steel Policy
NEWS PEG
- The Ministry of Steel and the Ministry of New and Renewable Energy (MNRE) sanctioned pilot commercial projects with a budget of ₹455 crore to inject Green Hydrogen into existing blast furnaces and Direct Reduced Iron (DRI) shaft furnaces.
- The Indian steel sector currently accounts for over 12% of total national greenhouse gas emissions with an average carbon intensity of 2.55 tonnes of CO2 per tonne of crude steel (higher than global average of 1.85 t CO2/tcs), driven by coal-based blast furnace routes.
- The government finalized draft standards for the 'Green Steel Taxonomy' to define certified low-carbon steel, preparing domestic manufacturers for compliance with the European Union's Carbon Border Adjustment Mechanism (CBAM).
STATIC FOUNDATION
- Steel Production Pathways in India:
- Blast Furnace - Basic Oxygen Furnace (BF-BOF): Uses coking coal/coke as reducing agent and thermal source; highly carbon-intensive (~2.2–2.8 t CO2/tcs); accounts for ~45% of India's steel production.
- Direct Reduced Iron - Electric Arc Furnace (DRI-EAF): Uses coal/gas to reduce iron ore directly into sponge iron, followed by melting in EAF; accounts for ~55% of Indian steel.
- Green Hydrogen DRI Pathway: Replaces fossil carbon (coke/gas) with green hydrogen (H2) as the reducing gas; chemical reaction releases only water vapor (H2O) instead of CO2, reducing emissions by up to 95%.
- National Green Hydrogen Mission (2023): Aims to produce 5 MMT of green hydrogen per annum by 2030, with dedicated pilot allocations for steel, shipping, and heavy mobility.
PRELIMS TRAP & PYQ BRIDGE
MAINS ENHANCEMENT
- Export Competitiveness under CBAM: Decarbonizing Heavy Industry — Transitioning Indian steel mills to green hydrogen to avoid 20–35% carbon border adjustment tariffs in European markets.
- Securing Green Hydrogen Feedstocks: Electrolyzer Capex Subsidies (SIGHT Scheme) — Scaling domestic alkaline and PEM electrolyzer manufacturing to bring green hydrogen costs below $2/kg.
- Circular Steel Scrap Policy: Scrap-Based Electric Arc Furnaces — Expanding vehicle scrappage and domestic metal recycling to reduce raw iron ore smelting requirements.