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Green Hydrogen: Transforming India’s Steel Industry Towards Net Zero
Apr 23, 2025
EY-Parthenon's report highlights the transformative potential of green hydrogen in decarbonizing India’s steel industry. Among various hydrogen production methods, alkaline electrolysis stands out as the most suitable for India, with a balance of efficiency (60–70%) and cost ($3.7/kg), but feedstock limitations hinder scalability.
In steel production, the Gas-based DRI-EAF route shows the highest emissions reduction (53%) using 65 kg of green hydrogen per ton of steel. In a net-zero scenario by 2070, hydrogen-based DRI-EAF could account for 41% of India's crude steel output, up from 11% by FY40, requiring 15.15 MMTPA of green hydrogen. This transition is fueled by falling hydrogen costs (projected $1.8/kg by 2040) and rising carbon pricing.
Despite high initial CAPEX ($297B for 245 MMTPA by FY70), production costs are expected to drop significantly ($600/t to $421/t by 2040), making green hydrogen economically viable. Recommendations include promoting alkaline electrolysis, enabling public-private partnerships, developing hydrogen hubs and pipelines, and introducing carbon pricing to accelerate green hydrogen adoption in steelmaking.