| |November 202119then converted into molten steel through an electric furnace to create steel products. The reducing agent used in this entire process is pure hydrogen.COST COMPETITIVEThere 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 HYDROGENThere 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 AHEADHydrogen 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.
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