India is moving ahead with a national pilot project to develop its first 100% hydrogen-powered Direct Reduced Iron (DRI) plant, marking a significant step in the country’s efforts to test hydrogen-based ironmaking at industrial pilot scale. The project will be led by CSIR-Institute of Minerals and Materials Technology (CSIR-IMMT) and has received in-principle approval from the Ministry of Steel and the Ministry of New and Renewable Energy. The proposed facility will have a capacity of 20 tonnes per day and is expected to be completed by August 2029.
₹207 crore project with government support
The total project cost is estimated at ₹207 crore, with ₹113 crore expected to come as government support under the National Green Hydrogen Mission. The balance will be contributed by members of the industry consortium supporting the project. The Ministry of Steel has identified 100% hydrogen-based DRI through a vertical shaft furnace as one of the key routes under its hydrogen pilot programme for the steel sector.
The consortium led by CSIR-IMMT includes Godavari Power and Ispat, Lloyd Steel, Jindal Stainless and Thyssenkrupp Industries India. Tata Steel has also agreed to join the consortium, while discussions are reportedly under way to bring additional steel producers, including SAIL, into the programme. This industry participation is intended to connect the technology development with actual steelmaking requirements.
Indian iron ore presents a different technical challenge
One of the major challenges for the project will be the quality and characteristics of Indian iron ore. Several international hydrogen-DRI projects have been designed around higher-grade magnetite, while India has a large availability of relatively lower-grade hematite ore. CSIR-IMMT is therefore working on ore-processing and reduction technologies that can make the hydrogen-DRI route suitable for Indian raw materials.
This is important because the performance of a DRI plant depends heavily on the quality and behaviour of its feed material. The project will therefore not simply replicate an existing overseas configuration, but will test the process under Indian ore conditions. The institute is also carrying out intermediate-scale work before moving to the planned 20-tonne-per-day facility because material behaviour can change as the process is scaled up.
Vertical shaft furnace to operate entirely on hydrogen
The proposed national pilot will use a vertical shaft furnace designed to operate on 100% hydrogen. This differs from several other hydrogen projects being explored by steelmakers, where hydrogen is being introduced gradually as a partial replacement for conventional reducing agents. The objective of the CSIR-led project is to demonstrate the complete hydrogen-based DRI route at pilot scale.
The Ministry of Steel's current hydrogen programme covers several technology routes, including 100% hydrogen DRI, hydrogen injection into blast furnaces, partial hydrogen substitution in DRI production and other technology-neutral approaches for reducing carbon emissions. The ministry says six pilot projects have been awarded across these categories.
Hydrogen cost remains a major hurdle
Technology is only one part of the challenge. The economics of hydrogen-based steelmaking remain difficult because green hydrogen is currently reported at around $5/kg, while costs closer to $1/kg would be needed for the process to become commercially competitive. Industry officials involved in the project have also estimated that green steel currently carries a cost premium of around $200 per tonne compared with conventional fossil-fuel-based production.
This cost difference means that demonstrating the technology successfully will not automatically make hydrogen-based DRI commercially viable. Hydrogen availability, renewable power costs, plant utilisation and the quality of the finished DRI will all influence the economics when the technology moves beyond the pilot stage. For now, the project is primarily aimed at establishing technical performance under Indian conditions.
A smaller pilot will support the scale-up
CSIR-IMMT is also developing a 3-tonne-per-day DRI plant using its own resources to bridge the gap between laboratory experiments and the larger national pilot. The intermediate facility is intended to provide additional information on process behaviour before the 20-tonne-per-day plant is commissioned. This staged approach is particularly relevant because the project is attempting to combine hydrogen reduction with India's specific iron ore characteristics.
Alongside the 100% hydrogen project, CSIR-IMMT has received in-principle approval for another ₹20 crore pilot project to examine the use of up to 30% hydrogen along with biochar in existing rotary-kiln DRI operations. The project has a proposed government grant of ₹7.5 crore and is aimed at developing a route that existing steel plants could potentially adopt without immediately shifting to a completely new hydrogen-based DRI facility.
India moves from hydrogen targets to steel-sector trials
The hydrogen DRI programme is part of India's broader effort to test lower-carbon technologies in one of the country's most energy-intensive industries. The Ministry of Steel has allocated ₹455 crore for hydrogen-related pilot projects in the steel sector through FY 2029-30 under the National Green Hydrogen Mission.
The 20-tonne-per-day project will remain a pilot rather than a commercial-scale steel plant. Its importance will depend on whether it can demonstrate stable DRI production using Indian iron ore, achieve the required metallurgical quality and provide useful operating data for larger plants. The technical results and the cost of hydrogen will therefore be closely watched as India evaluates the next stage of hydrogen-based steelmaking.
Source note: Based on information from the Ministry of Steel and reports on the CSIR-IMMT-led project. Project timelines, costs and technical targets remain subject to implementation and further development.