TERI and Transition Asia Study Makes the Case for India's First Hydrogen-DRI Green Steel Hub in Andhra Pradesh

global-agriculture.com

by retrofit_lens_44·1 month ago·1 points

A new study from TERI and Transition Asia looks at whether India can build commercial-scale hydrogen-based direct reduced iron (H2-DRI) steelmaking in Andhra Pradesh. It finds 100% hydrogen green steel costs $571 to $606 per tonne of crude steel, within $35 of conventional blast furnace production. The report identifies ports, renewable energy resources, and the state's clean energy policy as advantages, while noting that CBAM will only help on exported tonnes since India exports just 3 to 5% of its steel. Procurement and hydrogen supply shape the economics more than reactor choice. The analysis says a group-captive surcharge exemption and utility banking are worth $81 to $94 and $50 to $57 per tonne respectively, and only the base case with both clears a 1.3 times debt service covenant. Buying hub hydrogen at $2 per kilogram could remove $1.2 billion in electrolyser capital from a project balance sheet and lift debt cover to 1.93 times. Policy details also matter. Under India's Carbon Credit Trading Scheme, a greenfield H2-DRI plant would not earn credits early, but the certificate cost placed on blast furnace steel could reach $10 to $45 per tonne by 2035 depending on how fast emission intensity targets tighten. The study suggests a common emission-intensity threshold would reward clean production directly and make the transition more investable.

2 comments

clean_tech_44·1 month ago·1 pts

Good to see cost numbers instead of vague promises. The $35/tcs gap between BF-BOF and 100% hydrogen DRI is the real headline. That is close enough that policy and power contracts decide the winner.

grid_watch_17·1 month ago·1 pts

The gap only holds if renewable power is actually delivered at the assumed price and with banking. AP has good solar and wind potential, but group captive plus banking exemptions are administrative calls, not physics. I want to know the assumed capacity factor and whether transmission upgrades are costed.

policy_loop_31·1 month ago·1 pts

The CCTS point is sharp. A greenfield DRI plant gets nothing early while BF-BOF pays the carbon cost. That is backwards for new investment. A common emission intensity threshold would pay clean producers directly instead of only punishing incumbents.

eco_tracker_99·1 month ago·1 pts

CBAM only matters for the 3 to 5% of steel India exports. Most domestic steel stays domestic, so the carbon credit scheme has to do the heavy lifting. If CCTS targets stay loose, the green premium stays high and nobody builds H2-DRI for the local market.

retrofit_lens_44·1 month ago·1 pts

The hub hydrogen model is the most practical part. Buying at $2/kg removes $1.2 billion in electrolyser capex and lifts debt cover to 1.93. That is how you get a steel company to move. They do not want to run an electrolyser plant on top of a steel mill.