The Indian government has set aside a significant sum of Rs 455 crore for Central Financial Assistance until fiscal year 2029-30 to promote the use of green hydrogen in the steel sector. On February 2, 2024, the Ministry of New and Renewable Energy issued scheme guidelines as part of the National Green Hydrogen Mission, intending to accelerate the use of green hydrogen in different steel industry processes.

The concept primarily aims to incorporate 100% hydrogen into the Direct Reduced Ironmaking process and use hydrogen in Blast Furnace operations. Furthermore, it intends to gradually replace fossil fuels with green hydrogen in the DRI process, promoting the decarbonization of iron and steel manufacturing. The National Green Hydrogen Mission aims to improve technologies and skills, overcoming current gaps and facilitating the implementation of green hydrogen and its derivatives via pilot projects.

The primary focus is tackling operational difficulties and finding gaps in technological readiness, regulations, implementation techniques, infrastructure, and supply chains. These pilot projects, carried out by agencies recognized by the Steel Ministry, would provide vital insights for scaling up and commercializing green hydrogen in the iron and steel sector.

The allocated budget will be drawn from the provisions of the National Green Hydrogen Mission Head. The program expects infrastructure development in the steel sector, including refuelling stations, storage, and distribution networks, to create a full green hydrogen ecosystem. The predicted decrease in the cost of producing green hydrogen over time will likely encourage increasing utilization in the steel sector.