Examine the role of green hydrogen in decarbonising India's hard-to-abate industries. What are the key supply-side and cost challenges?

Hard-to-abate industries — steel, cement, refining and fertilisers — resist direct electrification because they need very high-temperature heat and carbon as a chemical reductant. Green hydrogen, produced by electrolysis of water using renewable power, is the principal substitute India is betting on, though it remains at pilot scale.

Role in decarbonisation

• Feedstock substitution: hydrogen replaces coking coal in reducing iron ore. MNRE's pilot guidelines (2 February 2024) fund 100% hydrogen-based DRI in vertical shafts and hydrogen injection in blast furnaces, with ₹455 crore till FY2029-30 [2].
• Mission scale: the National Green Hydrogen Mission (approved January 2023, outlay ₹19,744 crore) targets 5 MMT per annum by 2030, expected to avert nearly 50 MMT of CO2 annually [1].
• One of several levers: the Ministry of Steel's Greening the Steel Sector: Roadmap and Action Plan, based on 14 Task Forces, places green hydrogen alongside energy efficiency, renewables, material efficiency and CCUS [3].
• Refineries and fertiliser units can displace grey hydrogen immediately, offering the cheapest early demand [1].
• Demand pull: India's Green Steel Taxonomy (December 2024) — the world's first — defines green steel below 2.2 tCO2e per tonne, enabling green public procurement and export certification [4].

Supply-side challenges

• Producing 5 MMT requires about 125 GW of additional renewable capacity, raising land, grid-integration and round-the-clock supply problems for continuously-run plants [1].
• Domestic electrolyser manufacturing is nascent, addressed only through SIGHT incentives; critical-mineral dependence persists [1].
• No dedicated hydrogen storage, pipeline or transport network; deployment is still a handful of pilots [2].

Cost challenges

• Green hydrogen remains costlier than coal-based routes; cost reduction is an explicit government priority [5].
• The resulting "green premium" on steel demands procurement mandates and PLI-type support for offtake [4].
• Retrofitting or replacing recently-built blast furnaces risks stranded assets [3].

Green hydrogen is therefore necessary but not sufficient. Sequencing it with energy efficiency, scrap-based electric arc furnaces and CCUS, while scaling renewables and electrolysers, can align industrial growth with India's net-zero-by-2070 pledge.