India’s National Green Hydrogen Mission has spent its first years building the supply side: electrolyser manufacturing incentives, production incentives, and port-side hub planning. The demand side is now getting attention in the sector where it is hardest — and most consequential: steel.
The Ministry of New and Renewable Energy and the Ministry of Steel have invited bids for pilot projects using green hydrogen in steelmaking, seeking to demonstrate low-carbon production routes and chip away at emissions from one of India’s largest industrial emitters.
Why steel is the hard case
Steelmaking accounts for a substantial share of India’s industrial CO₂ output, and the country’s production is set to grow, not shrink, as infrastructure build-out continues. Conventional blast furnaces use coking coal both as fuel and as the chemical reducing agent — and hydrogen can, in principle, replace it in direct reduced iron (DRI) processes. India is already the world’s largest DRI producer, which makes it an unusually good laboratory for hydrogen-based routes.
The economics, however, remain brutal. Green hydrogen still costs a multiple of the grey hydrogen and coal it would displace, and steel margins are thin. Hence pilots: the goal at this stage is engineering experience and cost discovery, not commercial tonnage.
The pattern to watch
The playbook resembles early solar policy — small, subsidised demonstrations intended to build capability while costs fall. Alongside the steel pilots, the mission has run pilot rounds in refineries, fertiliser, shipping and transport, and the 2026–27 MNRE budget maintained funding for the mission within a substantially larger overall allocation.
Whether hydrogen-DRI reaches Indian commercial scale this decade will depend mostly on the price of electrolytic hydrogen — which loops back to the price of round-the-clock renewable power. Every rupee shaved off firm green power brings green steel closer. The pilots announced now are where those numbers start becoming real.