The Steel That Doesn't Burn Coal
How Green Hydrogen Is Rewriting India's Carbon Equation
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Every Tuesday, I Try to Write About Something Safe
Every Tuesday, when I sit down to write about technology in real estate, I make myself the same promise:
"This week, Arindam… keep it simple. One material. One technology. One clean thread."
And every Tuesday, without fail,
that promise collapses.
Because construction and real estate refuse to behave like normal industries.
They are collision zones.
Where materials science crashes into climate policy.
Where manufacturing meets molecular chemistry.
Where buildings become carbon decisions before the first brick is laid.
Last week, it was carbon-eating concrete — buildings that sequester CO₂.
Before that, active building skins that generate power.
Before that, mycelium — fungus that grows itself into walls.
This week, I thought I was being sensible.
I picked something foundational. Industrial. Unglamorous.
Steel.
Just steel.
How complicated could steel be?
But within minutes, I fell — again — into the rabbit hole.
Because steel is not just steel anymore.
Steel is now a hydrogen question.
And hydrogen, it turns out, is not a fuel source.
It is a carbon exit strategy for an industry that cannot decarbonize any other way.
This is the story of green hydrogen in steelmaking —
the technology that allows India to manufacture steel without burning coal —
and why it may become the defining industrial transition of the next two decades.
The Problem: Steel's Carbon Trap
Steel built the modern world.
Every bridge. Every tower. Every rail line. Every car. Every turbine.
Two billion tons of steel are produced globally every year.
And the process is filthy.
The steel industry is responsible for 7–9% of the world's carbon emissions.
In India, it's even more concentrated:
Steel manufacturing accounts for 35% of all greenhouse gas emissions from the manufacturing sector.
That's not operational energy. That's not logistics. That's not inefficiency.
That's chemistry.
Why Renewables Can't Save Traditional Steel
Here's the trap:
To make steel, you need to extract iron from iron ore.
Iron ore is iron oxide — literally, rusted iron.
To "un-rust" it, you need a reducing agent that strips away the oxygen.
For thousands of years, that reducing agent has been carbon — in the form of coal and coke.
When carbon combines with oxygen from the ore, it creates CO₂.
This is not a side effect.
This is the reaction itself.
You can't eliminate it by switching to solar panels or wind turbines.
You can't efficiency-engineer it away.
You can't offset it with better insulation.
The chemistry demands carbon.
Unless…
You replace carbon with something else.
The Solution: Hydrogen as the New Reducing Agent
Hydrogen does what carbon does — but cleaner.
When hydrogen (H₂) reacts with iron oxide, it strips away the oxygen and produces:
- Pure iron
- Water vapor (H₂O)
Not CO₂.
Water.
That single substitution — carbon for hydrogen — eliminates up to 90% of emissions from primary steelmaking.
This is not incremental improvement.
This is a complete molecular rewrite of how steel is made.
The Technology: How Hydrogen-Based Steel Actually Works
The dominant pathway emerging globally is:
Hydrogen-based Direct Reduced Iron (H-DRI) + Electric Arc Furnace (EAF)
Step 1: Direct Reduction with Hydrogen
Instead of a blast furnace (which uses coke and coal), steel plants use a shaft furnace that:
- Heats iron ore and hydrogen to 800–1000°C
- Hydrogen strips oxygen from the ore
- Produces sponge iron (DRI) + water vapor
Step 2: Melting in an Electric Arc Furnace
The sponge iron is then melted in an EAF — powered by electricity (ideally renewable) — to produce liquid steel.
Total emissions?
If the hydrogen is green (produced via electrolysis using renewable power):
Near-zero.
If the electricity is renewable:
Zero.
The Hydrogen Consumption Reality
To produce 1 ton of steel, you need approximately:
- 50–53 kg of hydrogen
- 4–5 MWh of electricity (for shaft furnace + EAF)
For context:
- Producing 50 kg of green hydrogen requires 2,500–2,650 kWh of electricity
- Total electricity demand: 6,500–7,500 kWh per ton of steel
Compare that to traditional blast furnace steelmaking:
- 350 kWh per ton of electricity
- But 600–800 kg of coal per ton (which releases 1.9 tons of CO₂)
The trade-off is clear:
Hydrogen steel uses more electricity but eliminates fossil fuel combustion entirely.
The Economics: When Does Green Steel Become Viable?
Here's where it gets real.
Green hydrogen steel is not economically competitive today.
But the trajectory is clear — and India has mapped it precisely.
The India Timeline (Based on CEEW Study)
A detailed feasibility study by the Council on Energy, Environment and Water (CEEW) modeled green hydrogen steel production at wind-solar hybrid (WSH) locations like Bellary (Karnataka) and Kutch (Gujarat).
Key Findings:
| Year | Hydrogen Blend | Production Cost (USD/ton) | Benchmark (BF-BOF) | Status |
|---|---|---|---|---|
| 2020 | 9% green H₂ | $443 | $400–442 | Breaks even with upper range of BF-BOF |
| 2030 | 60% green H₂ | $424 | $400–442 | Competitive with average BF-BOF cost |
| 2040 | 100% green H₂ | $386 | $400–442 | Cheaper than traditional steel |
| 2050 | 100% green H₂ | $366 | $400–442 | Clear cost advantage |
(Assuming green hydrogen costs decline from $6/kg today to $2–3/kg by 2040. Numbers adapted from CEEW’s Bellary wind‑solar hybrid case, which models levelized cost of steel under different hydrogen blends and technology cost decline assumptions)
The 2025 Reality: Blending Is the Bridge
The breakthrough insight: You don't need to go 100% green hydrogen on Day One.
India's optimal transition pathway:
2025 (Today):
Blend 9% green hydrogen with grey hydrogen (from natural gas)
- Achieves 0.75 tons CO₂/ton steel (vs. 2.3 tons for coal-based)
- Already competitive with upper-range blast furnace costs
2030:
Scale to 60% green hydrogen blend
- Achieves 0.41 tons CO₂/ton steel
- Competitive with average blast furnace costs
2040:
Achieve 100% green hydrogen
- Achieves 0.25 tons CO₂/ton steel (near-zero)
- Cheaper than conventional steel
This blending strategy allows India to transition gradually while building out hydrogen infrastructure, electrolyzer capacity, and renewable energy generation.
Real-World Projects: Green Steel Is Already Being Made
This is not theory.
1. HYBRIT (Sweden) — World's First Fossil-Free Steel
Partners: SSAB, LKAB, Vattenfall
Achievement: Produced the world's first fossil-free steel in 2021
Technology: 100% hydrogen-based DRI + EAF
Goal: Commercial-scale production by 2026
Impact: First vehicle made with fossil-free steel delivered to Volvo in 2022
2. H2 Green Steel (Sweden) — $5 Billion Hydrogen Steel Plant%202.jpg)
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Capacity: 5 million tons/year by 2030
Power Requirement: 1.3 GW of renewable electricity
Funding: Backed by global investors including Schneider Electric
Status: Under construction, expected online by 2025–2026
Significance: One of the largest green steel projects globally
3. ArcelorMittal (Global) — Hydrogen Injection Trials%20%E2%80%94%20Hydrogen%20Injection%20Trials.webp)
%20%E2%80%94%20Hydrogen%20Injection%20Trials.webp)
Location: Multiple plants across Europe and North America
Technology: Hydrogen injection into existing blast furnaces
Achievement: Demonstrated 20–30% CO₂ reduction with partial hydrogen replacement
Timeline: Piloting 100% hydrogen DRI by 2030
4. Tata Steel (India) — Hydrogen Steelmaking Trials%20%E2%80%94%20Hydrogen%20Steelmaking%20Trials.webp)
%20%E2%80%94%20Hydrogen%20Steelmaking%20Trials.webp)
Location: Jamshedpur, India
Technology: Hydrogen injection into blast furnace
Result: 7–10% reduction in CO₂ emissions demonstrated
Next Phase: Exploring full H-DRI implementation with government support
5. Boston Metal (USA) — Molten Oxide Electrolysis%20%E2%80%94%20Molten%20Oxide%20Electrolysis.jpg)
%20%E2%80%94%20Molten%20Oxide%20Electrolysis.jpg)
Technology: Direct electrolysis of iron ore (no hydrogen needed)
Funding: $120 million raised (investors include ArcelorMittal, Microsoft)
Status: Demo plant planned for 2024, commercial by 2026
Advantage: Uses electricity directly, bypassing hydrogen production
India's Strategic Position: Why This Matters Now
India is not a bystander in this transition.
India is positioning itself as a global green hydrogen hub.
National Green Hydrogen Mission
Announced: 2023
Budget: ₹19,744 crore
Target: 5 million tons of green hydrogen production capacity by 2030
Expected Investment: ₹8 lakh crore
Job Creation: 600,000+ jobs
Emissions Reduction: 50 million tons of CO₂ annually
SIGHT Program (Strategic Interventions for Green Hydrogen Transition)
Total Allocation: ₹17,490 crore
Component 1: ₹4,440 crore for electrolyzer manufacturing
Component 2: ₹13,050 crore for green hydrogen production incentives
Goal: Make India self-reliant in electrolyzer manufacturing and green hydrogen production
Why India Has a Structural Advantage
India is uniquely positioned to lead green hydrogen steel because:
- Abundant renewable energy resources (solar + wind potential)
- Low-cost renewable electricity (already among cheapest globally)
- Existing DRI infrastructure (India is the world's largest DRI producer)
- Policy support (PLI schemes, National Hydrogen Mission, tax incentives)
- Domestic demand (India is the world's 2nd largest steel producer)
India produces 120 million tons of steel annually.
If even 20% transitions to green hydrogen by 2035, that's:
- 24 million tons of green steel
- 40–50 million tons of CO₂ avoided annually
- A $25+ billion market for green hydrogen in steel alone
The Market: How Big Is This Opportunity?
Global Green Steel Market
| Projection | Market Size | Source |
|---|---|---|
| 2024 | $718 billion | Grand View Research |
| 2030 | $766 billion | (CAGR 6.0%) |
| 2034 | $1.3 trillion | Market Research Reports |
India Green Hydrogen Market
| Year | Market Size | Growth |
|---|---|---|
| 2024 | $1.4 billion | Base year |
| 2033 | $25.3 billion | CAGR 39.5% |
Key Drivers:
- Government mandates
- Renewable energy targets
- Declining electrolysis costs
- Rising demand in refineries, fertilizers, and steel
- Push for energy security
- Export potential
The Infrastructure Challenge: What Must Happen First
Transitioning India's steel sector to green hydrogen is not just a technology problem.
It's an infrastructure problem.
For 0.5 Million Tons of Green Steel Production, You Need:
| Resource | Requirement |
|---|---|
| Solar Capacity | 1,157 MW |
| Wind Capacity | 207 MW |
| Electrolyzer Capacity | 25–433 MW (depending on year/blend) |
| Land | 5,259–15,641 acres |
| Water | 2.93 tons per ton of steel |
| Capital Investment | $538 million–$694 million (2020–2040) |
To produce 111 million tons of green steel (India's 2019 output):
- 264 GW of solar capacity (59% of India's 450 GW renewable target by 2030)
- 325 million tons of water annually (16% of Gujarat's annual supply)
- 3.4 million acres of land (7% of Gujarat's land area)
These are not trivial numbers.
But they are achievable — if India treats green hydrogen infrastructure as national priority, not industrial afterthought.
The Cement Connection: Why This Matters for Real Estate
Steel and cement are the twin carbon giants of construction.
If steel transitions to green hydrogen,
and cement transitions to carbon capture (as we covered last week),
the embodied carbon of Indian buildings could drop 60–80% by 2040.
That is the difference between:
- Buildings that contribute to climate collapse
- Buildings that enable Net Zero 2070
For real estate developers, this means:
- Lower embodied carbon = Better IGBC/GRIHA ratings
- Green steel certification = Access to green financing
- Early adoption = Brand differentiation + regulatory advantage
When IGBC Net Zero Carbon ratings become mandatory (not just aspirational), the buildings using green steel will have a 10-year head start.
The Challenge for You — The Reader
If green hydrogen truly has the power to eliminate 35% of India's manufacturing emissions…
What breakthrough do you think must happen first for it to scale?
Is it:
- Cheaper electrolyzers (below $300/kW)?
- Grid-scale renewable energy (dedicated to hydrogen)?
- A hydrogen pipeline network (like natural gas)?
- Government-backed offtake agreements (guaranteeing demand)?
- A Tata/JSW/SAIL commitment to 100% green hydrogen steel by 2035?
- Carbon border taxes (making dirty steel uncompetitive)?
Comment your answer —
and let's see where the industry thinks the real bottleneck is.
Conclusion: The Steel That Rewrites the Carbon Equation
Hydrogen is not just a cleaner fuel.
Hydrogen is a molecular replacement for the chemistry that built the industrial world.
Steel made from coal is not just dirty. It is chemically incompatible with Net Zero.
Green hydrogen steel is not just a sustainability upgrade.
It is the only pathway that allows India to keep building without burning the planet.
The economics are close.
The technology is proven.
The infrastructure is being built.
The policy is in place.
The only question left is speed.
Because the next 200 million tons of steel India produces will either lock in emissions for the next 30 years —
or erase them entirely.
This was my Technology Tuesday rabbit hole.
Next week?
I'll make myself the same promise:
"Keep it simple, Arindam."
And once again,
I know I'll fail.
Beautifully.
— Arindam Bose
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If buildings can now eat carbon and walls can generate power, what happens when the steel inside them stops burning coal? Welcome to the new construction equation.
→ Read how concrete captures carbon: The Building That Eats Carbon- Arindam Bose
→ Read how walls generate power: Invisible Energy: Active Building Skins and Solar Glass for Sustainable Real Estate- By Arindam Bose
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