The Indian government has allocated 4.5bn rupees ($55m) to setting up pilot green steel plants that use renewable H2 in the production process.

Funding will come from the National Green Hydrogen Mission, for which an “initial” 197.44bn rupees of government money was set aside in early January, including 14.66bn rupees for pilot projects “in emerging end-use sectors and production pathways”.

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A letter posted on the website of the Ministry of Steel, signed by a senior civil servant, states that the 4.5bn rupees “could employed for Research, Development and Demonstration (RD&D) and setting up of pilot plants for production & utilization of hydrogen in the iron & steel making processes”.

It sets out four possible uses of hydrogen that would be eligible for funding:

  • Hydrogen-based direct iron reduction (DRI), in which hydrogen is used instead of coking coal to extract iron from iron oxide ore, removing oxygen in the process
  • Redesigning electric arc furnaces to allow the transfer of hot hydrogen-derived iron to the furnace
  • Adapting existing DRI plants that use natural gas
  • “Design, technology and machinery modification if H2 is to be used in Blast Furnace”.
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Funding could be awarded for simulation models; designing and testing machinery or retrofitting existing equipment; “hydrogen logistics in the steel making environment for hazard mitigation”, and “pilot plans”, although that could be a spelling mistake as the top line of the document is about setting up “pilot plants”.

“It is therefore requested that proposals covering the above be submitted to Ministry of Steel for consideration before the formal process of floating is scheme is undertaken”, the letter states.

“An indicative budget/financial support required may be given to help design an appropriate Scheme for the sector under the Green Hydrogen Mission.”

The letter has apparently been sent to steel companies, academic institutions, research laboratories, equipment manufacturers and design & engineering companies.

India is the second-largest steel producer in the world after China, and the industry is so important to the national economy that it has its own ministry.