Key Takeaways:
By 2070, India is focusing on achieving net-zero emissions.
Hydrogen and Carbon Capture Utilization and Storage (CCUS) will play a pivotal role in decarbonizing steel and power sectors.
High price of hydrogen has hampered the rapid adoption.
Market volatility raises concerns of high costs and project delays.
Beside National Green Hydrogen Mission more polices are needed to be framed to support the industry.
Major steel players and the government are taking steps to adopt hydrogen-based technology.
Introduction
India is making a decisive march towards a sustainable energy future. The commitment to achieve a net-zero by 2070 requires the highly carbon intensive sectors take extensive measures to accelerate the momentum in achieving the same.
India’s per capita CO2 emissions are about 1.9 tonnes per annum, which is less than 40% of the global average and about one-fourth of the China. Thus, India needs a sustainable solution for the decarbonization of the sectors that are highly carbon intensive contributing around 70 percent of emission. Thus, Hydrogen and Carbon Capture Utilization and Storage (CCUS) has an important and critical role to play in it, especially for India to accomplish net-zero by 2070. The growth of renewable power has been a key success towards clean energy transformation for India.
Role Of CCUS and Hydrogen
CCUS has an important and critical role to play in decarbonizing the industrial sector which is hard to abate, due to the use of fossil fuels not as a source of energy but within the process itself. CCUS has an important role to play in decarbonizing the power sector, given India’s present reliance on coal to meet its electricity demands.
On the other hand, the H₂–DRI–EAF (Hydrogen–Direct Reduced Iron–Electric Arc Furnace) route also represents a transformative shift in steelmaking by replacing coal with hydrogen as the reducing agent for iron ore . Alternatively, blue hydrogen generated from natural gas combined with carbon capture and storage (CCS) offers a cost-effective, lower-emission transitional option. The H₂–DRI–EAF pathway aligns well with the scale and configuration of India’s mid-sized steel plants, but several challenges remain—namely, high hydrogen costs, limited availability of renewable power at scale, and the requirement for pelletized iron ore rather than traditional feedstock. For existing BF–BOF setups, CCS retrofits offer a potential transitional solution. However, India currently lacks the infrastructure, regulatory policies, and CO₂ transport networks needed for effective deployment of CCS. Overcoming these hurdles will be critical for enabling a comprehensive low-carbon transition in the steel sector.
Impacts Due to Market Volatility
India’s transition to green steel is largely shaped by the cost of critical inputs such as hydrogen, electricity, coal, gas, and iron ore . Green hydrogen isare currently priced very high which needs to be reduced from ₹300–400/kg ($3.5–4.8/kg), to ₹100–150/kg ($1.5–2.0/kg) to compete with coal-based steel. While blue hydrogen is globally cheaper, it remains less viable in India due to high natural gas prices ($10–14/MMBtu).
The absence of a national carbon market limits domestic incentives, unlike Europe where carbon pricing (€75–90/t CO₂) makes green steel competitive. However, the EU’s Carbon Border Adjustment Mechanism (CBAM) poses a decarbonization imperative for Indian steel exports to avoid punitive tariffs.
For example, a surge in Brent crude oil prices from $70 to over $80 per barrel in July 2025 due to geopolitical tensions and sanctions on Russian exports, had impacted India'simpacted the India’s decarbonization trajectory. It has been analysed that Carbon capture and storage (CCS) operations getgets affected by higher energy costs for CO₂ transport and compression.
The other key commodities that are vital for hydrogen and CCS technologies have also experienced price surges. Nickel (up ~15%) due to Indonesian supply issues, copper (over $9,000/tonne) driven by global clean energy demand, and iridium (spiking 25% due to limited South African output) have all inflated the cost of electrolyzers. Such trends threaten India’s targets under the National Green Hydrogen Mission.
Policy Drivers & Market Trends
Government policy and market signals are beginning to favour decarbonized steel. India’s National Green Hydrogen Mission is the cornerstone of industrial decarbonization policy. Meanwhile, industry players (e.g., JSPL, SAIL, AMNS, JSW) are running feasibility studies for H₂–DRI plants and exploring consortiums for shared infrastructure.
Despite progress, India lacks a national steel decarbonization roadmap, dedicated green steel subsidies, and public investment in CCS. These are critical to support early-mover projects.
Undergoing Projects By Major Players and Government Authorities
| Project / Initiative | Partners / Stakeholders | Status / Scale |
| JSW Steel & JSW Energy Hydrogen DRI Pilot | JSW Steel, JSW Energy, LeadIT | 25 MW electrolyzer, 3,800 tpa H₂; pilot commissioning in 2025 |
| Jindal Steel & Power Ltd Green Hydrogen Facility | JSPL, Jindal Renewables | 4,500 tpa H₂ with 3 GW renewables; aim to half coal use by 2026 |
| Steel Authority of India Limited (SAIL) Hydrogen DRI Pilot | SAIL, Ministry of New and Renewable Energy (MNRE) | 3,200 tpd H₂-DRI plant pilot; Rs 347 crore funding; target commissioning by 2027 |
| Matrix Gas and Renewables Ltd Pilot Plant | Matrix Gas, IIT Bhubaneswar, Swedish partners | 50 tpd hydrogen DRI production; supported under National Green Hydrogen Mission (NGHM) |
| Simplex Castings Ltd Hydrogen Pilot | Simplex Castings, IIT Bhilai | 40 tpd hydrogen steel pilot under NGHM support |
Conclusion
Coal cannot be completely phased out in the near term, so it is essential to focus on cleaner technologies for its use. In this regard, coal gasification, carbon capture and storage (CCS), and hydrogen-fueled steelmaking represent promising pathways to reduce emissions. Achieving net-zero emissions is not impossible, but it requires a strategic approach, supportive policies, and a strong commitment to implementation and follow-through.
Along with it, the governments should expand carbon pricing schemes and provide green steel procurement mandates to stimulate demand. Industry players can collaborate on shared infrastructure (e.g., hydrogen hubs or CCS networks) to reduce capital intensity. Investors should prioritize flexible, modular projects with the potential to switch between feedstocks or integrate with renewable energy.
