Hydrogen key to decarbonising India’s steel industry, as 2030 global capacity projections hit 21 MTPA
Examining different countries’ net-zero challenges and their corresponding actions offers valuable insights for addressing global climate goals. And few countries are more illuminating than India, given its rapidly expanding economy.
According to a report from the Confederation of Indian Industry (CII) and EY., global clean hydrogen production capacity is anticipated to grow to 21 million metric tonnes per annum (MTPA) by 2030, marking a fivefold expansion compared to the projections made in 2021.
In 2021, global hydrogen demand stood at 94 million tonnes which is projected to double to 185 million tonnes by 2030, aligning with net zero emissions goals.
Within this demand, clean hydrogen, the environmentally friendly iteration, is expected to account for 63 million tonnes. as international calls are being made to accelerate overall progress of the hydrogen industry.
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The growth certainly appears to be underpinned by a rising number of nations enacting policies to promote investment in hydrogen, and hydrogen-related technologies. The European Union’s efforts to reduce its reliance on Russian gas have also bolstered the trend further.
In March 2022, the European Commission unveiled its ‘REPowerEU’ strategy, designed to broaden the sources of energy imports and boost the use of renewable energy. As part of the initiative, they set an objective to generate 10 million tonnes of green hydrogen by 2030, alongside importing a further 10 mt. To achieve the target Europe needs to add 50GW-60GW of extra electrolyser capacity, to supplement the existing 44GW.
The 2022 Breakthrough Agenda report, jointly published by UN Climate Change High-Level Champions, the International Energy Agency, and the International Renewable Energy Agency (IRENA), highlights the need for hydrogen production to achieve near-zero carbon by 2030. Numerous international standards have been established to cap the carbon emissions caused by hydrogen production.
What is clear is that hydrogen is assuming an increasingly crucial role in the decarbonisation of heavy industry, as a clean and sustainable energy source that can mitigate the greenhouse gas emissions in manufacturing operations.
The steel industry in India is responsible for a significant 12% of the country’s total CO2 emissions, emitting 2.55 tonnes of CO2 for every tonne of steel produced, in contrast to the global average of 1.85 tonnes.
In a report titled “India Steel 2023 Amrit Kaal journey: Facilitating the Indian growth story” by Deloitte, it is suggested that hydrogen may offer the solution to India’s decarbonisation challenge in their massive steel industry.
According to the report, the steel industry in India is responsible for a significant 12% of the country’s total CO2 emissions, emitting 2.55 tonnes of CO2 for every tonne of steel produced, in contrast to the global average of 1.85 tonnes.
Given that India’s steel industry presently accounts for around 240 million tonnes of annual carbon emissions, a figure anticipated to double by 2030 considering the Indian government’s infrastructure development goals, it shows the pressing need for steel producers to implement decarbonisation strategies.
The government has pinpointed green hydrogen-based Direct Reduction Iron (DRI) as the most efficient substitute for conventional steelmaking processes that depend on fossil fuels, predominantly coal and natural gas.
Estimates point towards expansion of hydrogen technology hinging on reaching a cost of approximately $1-2 per kilogram, whilst also putting a carbon levy of approximately $50 per tonne of emissions on steel produced using conventional techniques. This would make green steel economically competitive and encourage a transition of up to 150 million tonnes from coal-based to hydrogen-based steel production.
According to Deloitte’s industry experts, substituting hydrogen for fossil fuels in the DRI process has the potential to slash emissions by as much as 90%.
This all aligns with the Indian Government’s National Green Hydrogen Mission, which seeks to leverage the opportunity by supporting the growth of hydrogen infrastructure.
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