The cost of producing green hydrogen is expected to fall to $2 per kilogram by 2032, a development that could help decarbonise India’s steel sector, said Abhay Bakre, Director of the National Green Hydrogen Mission, on Tuesday, reported Business Standard.
Speaking at an industry event, Bakre stressed that green hydrogen will play a crucial role in reducing emissions from heavy industries like steel and refineries. “If the current progress continues, by 2032 or 2035, green hydrogen could cost almost the same as other forms of hydrogen. That would make it the best option to clean up the steel sector,” he said.
The steel industry currently relies on coal to power furnaces, making it one of the country’s most carbon-intensive sectors. The urgency to adopt cleaner alternatives has grown, especially as the European Union plans to impose a carbon border tax on carbon-heavy imports such as steel and aluminium starting January 2026.
Bakre noted that the affordability challenge is similar to what solar energy once faced. “Solar costs dropped to around ₹2 per unit because large projects were supported by long-term contracts, favourable policies, and better infrastructure. A similar approach is needed for green hydrogen,” he said.
The National Green Hydrogen Mission, under the Ministry of New and Renewable Energy, aims to make India a global hub for green hydrogen by 2030, targeting 5 million tonnes of production capacity. The mission includes incentives worth ₹17,490 crore to support electrolyser manufacturing and hydrogen production, along with ₹455 crore for pilot projects in the steel sector.
Five pilot projects have already been approved, focusing on replacing natural gas with hydrogen in Direct Reduced Iron (DRI) production and injecting hydrogen into blast furnaces to cut coal and coke use.
Bakre also pointed to recent price trends as encouraging signs. Last month, the Solar Energy Corporation of India discovered a price of ₹55.75 per kg in the country’s first green ammonia auction under the SIGHT programme, which he attributed to strong government policy support.
“The option of green hydrogen in steel is not just viable but could soon become affordable, supporting both industry growth and climate goals,” Bakre said.
