Pathways for a Low-Carbon Technologies for DRI Process in India - A Country Level Analysis: Focus on Hydrogen Production, Storage and Distribution and Technologies to be Integrated in current DRI process

India’s steel sector is transitioning toward low-carbon direct reduced iron (DRI) production methods, propelled by decarbonization imperatives, government mandates, and increasing emphasis on green hydrogen. By 2025, several pilot initiatives and early commercial-scale projects are expected to employ hydrogen blends in conventional gas-based DRI processes, while forging the groundwork for full-hydrogen DRI routes. Simultaneously, expansions in green hydrogen production, storage, and transport infrastructure will reduce dependence on fossil-based reductants (i.e., natural gas or coal), aligning the Indian steel industry with emerging global decarbonization standards.

Over the longer term (2025-2034), India aims to scale domestic hydrogen production - predominantly from renewable energy - for large steelmaking clusters. Low-carbon DRI adoption will significantly curb carbon emissions, especially as ironmaking is one of the country’s highest-emitting industrial segments. Ongoing R&D around iron ore quality, reactor designs, and handling of 100% hydrogen further underscores the strategic importance of developing a robust hydrogen supply chain that links capture/compression, pipeline transport, and flexible consumption points within the DRI plants.

Infrastructure Requirements for Hydrogen Production, Storage, and Transportation

• Production Plants
• Analysis of Ongoing Production: Predominantly grey hydrogen from fossil sources, with incremental green capacity expansions.
• Production Type (Installed Capacities): Grey, green, others (blue or turquoise) under development.
• Upcoming Facilities and Technologies: Electrolyzers (alkaline, PEM, etc.), advanced SMR with carbon capture, novel advanced R&D projects.
• Key Companies and Technological Advancements: Partnerships among energy, steel majors, and startup ecosystems for cost reductions.
• Transportation & Storage
• Existing Infrastructure: Natural gas networks, some dedicated hydrogen pipelines.
• Improvements Needed: Pipeline repurposing or new builds, compressed or liquid hydrogen fleets, fueling stations.
• Investment Analysis: Public-private funding for production, distribution, and end-use integration, highlighting progressive government incentives and private capital flows.

India Hydrogen Storage & Transport Market

• Hydrogen Type
• Compressed Hydrogen: High-pressure tanks and transport solutions (Type 1, 2, 3, 4) for mobility or industrial delivery.
• Liquid Hydrogen: Emerging approach for large-scale, long-distance shipping, though still limited by cost and cryogenic complexity.
• Others: Novel carriers (e.g., ammonia, LOHC) under exploration.
• Products
• By Storage: Tanks (Types 1-5), bulk industrial tanks, fueling station storage.
• By Distribution: Towed trailers, tanker trucks, rail tank cars - transitioning from small pilot to large-scale networks.
• Consumers
• Industrial (Ammonia, Refining, Chemicals)
• Mobility: e.g., forklift fleets, heavy-duty trucking, future FCEV expansions.
• Geographical Variation: Demand hotspots in West (Gujarat, Maharashtra) and East (Odisha, Jharkhand) for steel/chemical hubs, North (Punjab, Haryana) for upcoming green hydrogen projects, South (Tamil Nadu, Andhra Pradesh) with renewable synergy.

Hydrogen and Natural Gas-Based DRI Process

• Technologies and Approaches
• Commercial DRI Processes (MIDREX®, Energiron®, others) that can integrate hydrogen with minimal modifications.
• Hydrogen-Enriched Natural Gas: Gradual H₂ blending for partial CO₂ reductions.
• 100% Hydrogen DRI (“Green DRI”): Achieves near-zero process emissions; requires large volumes of low-cost renewable hydrogen.
• Key Process Modifications
• Reforming vs. Direct H₂ Use: Balancing gas compositions, heat management, and reaction kinetics.
• Material & Safety Considerations: Handling hydrogen in hot, pressurized conditions, controlling final carbon content.
• Iron Ore Quality: DRI performance dependent on ore grade and reactivity.
• Comparative Analysis
• Energy Efficiency & CO₂ Reduction Potential: Pure hydrogen offers the greatest decarbonization benefits but with higher feedstock cost.
• Technical & Economic Viability: Upfront CapEx, operational complexities, supply chain readiness determine success.

Companies & Technology Providers

• DRI Technology Providers
• Midrex Technologies (Kobe Steel): Market leader offering gas-based DRI adaptable for hydrogen.
• Tenova & Danieli (Energiron): Flexible designs enabling incremental H₂ usage.
• Primetals (HYFOR): Fluidized-bed solutions supporting partial or full hydrogen use.
• Key Players in India’s DRI Transition: Domestic steel conglomerates (Tata Steel, JSW, SAIL, etc.) forging alliances with global technology firms.

Regulatory and Economic Aspects

• Regulations & Policies: Government-driven impetus (e.g., National Hydrogen Mission) drives R&D funding, lower green hydrogen costs, and demonstration of pilot plants.
• Economic Feasibility & Infrastructure
• Hydrogen Cost Analysis: Falling solar/wind LCOE brightens outlook for electrolytic hydrogen.
• Natural Gas Market: Pricing, supply constraints can hamper partial hydrogen transitions.
• CapEx and Investment: DRI retrofits or new greenfield hydrogen-based steel plants are capital-intensive, requiring robust financing solutions.
• Power Demand: Large renewable capacity expansions critical to ensure cost-competitive hydrogen.
• Future Outlook
• Adoption Projections: India’s steel capacity expansions, net-zero pledges create impetus for hydrogen-based ironmaking.
• Tech Innovations: Enhanced reactor designs, dynamic blending, advanced ore preprocessing to reduce required energy and emissions.

Trend in the Market

A key trend is hybrid DRI approaches - initially blending hydrogen with natural gas to gradually lower carbon intensity, followed by fully transitioning to 100% hydrogen once supply volumes and cost parameters permit. This stepwise approach eases technical, logistical, and financial risks.

Driver in the Market

India’s commitment to net-zero steelmaking is a major driver. The nation’s robust steel demand - coupled with international climate obligations - pushes policymakers and producers to explore viable low-carbon pathways, making green or hydrogen-enriched DRI the centerpiece of sustainable iron production.

Restraint in the Market

Despite broad momentum, high hydrogen production costs and limited infrastructure can constrain immediate widespread adoption. Electrolyzer capacity, pipeline networks, and proven storage solutions must scale significantly for pure hydrogen-based DRI processes to achieve cost parity with existing fossil-based methods.

Opportunity in the Market

Expanding renewable energy capacity in wind- and solar-rich Indian states presents a substantial opportunity. Integrated “green steel” hubs - co-locating renewable generation, electrolyzers, and steel plants - can drastically reduce supply chain costs and secure stable hydrogen supply, propelling India to a leading role in low-carbon ironmaking.

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