MECON Invites Bids for Green Hydrogen Pilot Projects in Steel Sector

Background and Context

As part of the National Green Hydrogen Mission, the Indian government is aggressively pushing for the decarbonization of hard-to-abate sectors, with the steel industry being a primary focus. MECON, a government of India enterprise, has been tasked with spearheading pilot projects to integrate green hydrogen into steel manufacturing processes. This follows the Ministry of New and Renewable Energy (MNRE) approval in October 2024 for three pilot projects, backed by a financial outlay of ₹3.47 billion (~$41.28 million).

Key Details

The scope of work for the selected bidders encompasses the complete engineering, procurement, installation, testing, and commissioning of the pilot projects, alongside long-term operation and maintenance. Successful participants are required to finalize project land, technology, and detailed project reports within three months of selection. The project timeline is set at 36 months, with a penalty clause of 0.1% per week of delay, capped at 5% of the Central Financial Assistance (CFA).

Bidders must provide a performance bank guarantee (PBG) equivalent to 3% of the approved CFA. Regarding hydrogen supply, bidders are responsible for sourcing the gas; however, they may indicate their annual consumption requirements to allow the MNRE to facilitate a competitive bidding process for hydrogen producers.

What This Means for EPCs and Developers

For EPC contractors, this EoI represents a significant opportunity to leverage existing industrial expertise. Eligibility criteria mandate that bidders must have owned or operated at least one facility in the Indian iron and steel sector—such as blast furnaces, direct-reduced iron plants, or electric arc furnaces—within the last 10 years. Financial requirements include a positive net worth and a minimum average annual turnover of 40% of the project cost over the last three consecutive financial years. This creates a high barrier to entry, favoring established industrial engineering firms.

What Happens Next

The bid submission deadline is April 8, 2026, with technical and commercial bids to be opened on the same day. Following the selection of successful bidders, the focus will shift to the rapid finalization of technology partners and project reports. The industry will closely monitor how the MNRE aligns hydrogen supply chains with these pilot projects to ensure operational viability.