The government has sanctioned three pilot projects for using hydrogen in steel production to SAIL and two consortiums, an official statement said on Friday. A financial support of INR 347 crore will be made available from the government for the pilot projects, which are likely to be commissioned in the next 3 years, the Ministry of New and Renewable Energy said in the statement.

Earlier, the MNRE had issued guidelines for the implementation of pilot projects in the steel sector and invited proposals from interested parties for their participation.

"As part of the National Green Hydrogen Mission, the Union Government has sanctioned three pilot projects for the use of Hydrogen in steel production," the MNRE said.

Matrix Gas and Renewables Ltd, a consortium of Gensol Engineering Ltd, Indian Institute of Technology Bhubaneswar, and Metsol AB, Sweden, has been selected for a pilot plant of 50 tonnes-per-day (TPD) capacity.

Simplex Castings is another consortium selected for the 40 TPD pilot project. Its members include BSBK Pvt Ltd, Ten Eight Investment and IIT Bhilai.

State-owned Steel Authority of India Ltd (Ranchi) has also been selected for a pilot project of 3,200 TPD.

The proposals were invited for three components -- a pilot project to produce DRI (directly reduced iron) using 100 per cent hydrogen using a vertical shaft, the use of hydrogen in a blast furnace to reduce coal/ coke consumption and the injection of hydrogen in vertical shaft-based DRI making unit.

These pilot projects are expected to demonstrate safe and secure operations of green hydrogen-based steel-making processes, validating technical feasibility and performance, and evaluating their economic viability, thereby leading to low-carbon iron and steel production.