Steel: Hydrogen, Scrap, Smarter Energy

Steel is India’s backbone—and its climate headache. As carbon border adjustments tighten, “green steel” shifts from CSR slogan to export survival strategy. The toolbox: hydrogen-based DRI, electric arc furnaces, renewables, and better scrap logistics. The sequencing decision—what to decarbonize first, where, and how fast—will determine margin resilience for a generation.

Why This Shift Matters Right Now

Global buyers are pricing embedded carbon. Whether via CBAM-like regimes or OEM mandates, high-emission steel will be discounted—or blocked. India’s demand growth is strong, but export optionality is the pressure valve. Firms that can ship certified low-carbon steel will win contracts in autos, appliances, and infrastructure—while accessing cheaper capital tied to sustainability-linked KPIs.

Hydrogen Reality: Pilots, Pipelines, and Power

Hydrogen DRI is promising but power-hungry. The economics hinge on renewable availability, electrolyzer prices, and load factors. Early pilots focus on blending hydrogen into existing DRI processes to de-risk metallurgy and O&M, before scaling dedicated green hydrogen corridors near renewables-rich states. Co-locating electrolysis with steel plants cuts logistics, but grid stability and water availability must be designed-in—not wished-in.

Scrap and EAF: The Shorter Path to Carbon Cuts

Expanding EAF capacity can deliver faster emission reductions when paired with clean power. The constraint is domestic scrap quality and collection. A national scrap exchange, standardized grades, and digitized traceability can compress working capital and reduce impurities. Import reliance won’t vanish, but smarter scrap policy plus extended producer responsibility schemes will raise domestic yields.

Data, Disclosure, and Premiums

Buyers aren’t taking glossy PDFs; they want auditable data: plant-level emissions, process-level energy inputs, and verifiable certificates. Digital MRV (measurement, reporting, verification) opens access to green premiums and climate-linked finance. Expect procurement to bifurcate—bulk commodity steel vs. certified low-carbon lots with superior pricing power.

The bata takeaway

Green steel isn’t a single bet—it’s a portfolio: hydrogen where viable, EAF + scrap where fastest, and relentless data transparency. Execution speed and procurement-grade proof will separate exporters who thrive from those who get tariffed into the slow lane.