Recently, Steel Minister Ram Chandra Prasad Singh has advised the Indian
Steel Industry to adopt hydrogen in a big way. “Acknowledging the concerns regarding environment and emissions generated by steel sector, I advise the industry to move towards adoption of using hydrogen in a big way,” said Ram Chandra Prasad Singh. Also, the Union government is planning to implement the
Green Hydrogen Consumption Obligation (GHCO) in fertilizer production and petroleum refining. It is similar to what was done with Renewable Purchase Obligations (RPO).
Saves Time of Steel Plants
It is a well-known fact that the way steel is manufactured has not changed significantly in the past 150 years. Iron ore is smelted in the huge blast furnaces that use carbon rich coal as a reducing agent to convert the iron into steel. Those blast furnaces expel out the large amount of carbon dioxide. This is not the only time when iron ore just shows up at the furnaces unaided, mining it and transporting it creates lot more carbon emissions as well as it consumes a lot of time.
Hydrogen has the potential to become a viable option and reduce the emissions during steel manufacturing. Hydrogen is capable enough to do everything that coal does in the steel making process and that too in less time. In fact, the technology to make fossil free steel is already currently operating with natural gas in many parts of the world. Experts believe that if policy was in place, the country could start producing green steel within a decade.
Reduction of Carbon dioxide Emissions
Iron ore which is used for the manufacturing of steel comprises of iron and oxygen. That process involves the use of coal to separate oxygen from iron. The carbon present in the coal combines with oxygen and form carbon dioxide which ultimately leads to emissions. In the past, many cases have come where people working near the emitting source in the steel plant have faced serious breathing issues.
By adopting the new production process that uses hydrogen instead of coke, which also reacts with the oxygen inside the iron ore, the final result is water vapour rather than carbon dioxide.
Since the production of hydrogen itself is climate-neutral with electricity from renewables, this process would ultimately produce genuine green steel. As well as, this process could reduce the carbon dioxide emissions of the entire country by up to ten percent. The government is planning to build big capacities of green hydrogen in the country and ensuring that there is a level playing field for all entrants and that the policy regime is stable.
Blast Furnaces Redundancy at Steel Plants
As the process of melting coal and iron ore in a single blast furnace is no longer needed, the facilities attached with it such as coke plant and blast furnace will be eliminated which will ultimately save the cost of steel plant. Hydrogen based Steel making does not require a blast furnace or a converter. The raw materials, that is iron ore and hydrogen goes into the fluidized reduction furnace and comes out as DRI (Direct Reduced Iron). This Direct Reduced Iron is then converted into molten steel through an electric furnace to create steel products. The reducing agent used in this entire process is pure hydrogen.
Cost Competitive
There are expectations that use of clean hydrogen will be demonstrated by 2030 and this adoption will gain momentum by the year 2035 in the Steel Industry, where hydrogen can be used to reduce iron ore to iron. The key drivers that will drive the adoption of hydrogen in the steel industry are cost competitiveness, decarbonisation and strong demand outlook for steel in the years to come. Experts believe that dedicated use of hydrogen as 100 percent fuel or green hydrogen as a reducing agent in the furnace could lead to a 15 times increase in the demand of hydrogen by 2050.
Challenges faced by Steel Industry in Adopting Hydrogen
There is no doubt in the fact that the transition from coal to hydrogen would be beneficial in the long run as it can play a significant role in other sectors as well such as transport, process industry, agriculture and long term energy storage which makes it easier to achieve economies of scale. Despite these benefits, there are some barriers in achieving hydrogen dependent steel industry. The first and foremost challenge is that hydrogen based DRI plant requires the high upfront capital cost. Since, the steel is traded on the global platform, these capital costs are difficult for the industry to absorb. There is a capital burden on each steel plant which pulls them back from emission-free steel manufacturing.
The Road Ahead
Hydrogen is found in abundant amount in the environment be it in water, hydrocarbons and other organic matter. Therefore, the transition of Indian Steel Industry to hydrogen would reduce India’s geopolitical dependencies as its reliance on imports of coal and natural gas will be reduced. To retain the edge for India as one of the leading steel producers globally, the Indian Government should provide incentives to the steel industry through policies for the adoption of hydrogen.
