Industries
Problem Overview: Use of blast furnace gas (BFG) beyond electricity generation
India is the world’s second largest steel producer with an annual production of ~170 MT, targeted to grow to 300-400 MT by 2030-2035. 45% of this production is through the BF-BOF route that produces BFG. At a standard rate of 1,600 Nm3 of BFG per ton of hot metal produced, that is roughly 120-200 billion Nm3 of BFG generated annually in India. The stream is low in calorific value, but is carbon-rich. It has been historically used for captive power generation and reheating furnaces within integrated steel plants.
At the same time, RE electricity costs in India continue to decline. Utility-scale solar power is approaching under 3 US cents/kWh, making it among the cheapest sources of electricity in the country. Solar plus storage systems are also approaching 5 US cents/kWh becoming comparable or cheaper than the coal-based generation across much of the country. As renewable electricity becomes cheaper and cleaner, there is less economic and environmental rationale for burning BFG for captive power generation[1].
Core Bottlenecks: Limited Direct Monetization Pathways
What makes BFG challenging is that it is a low-quality, highly variable, dilute industrial gas stream produced inside an already tightly integrated steel plant. Some of the key challenges are:
1. Modularity
Delivering MW-scale heat without custom engineering at every site.
2. COP
Achieving COP 2-3 while using industrial waste heat (not atmospheric) as heat source, avoiding new energy penalty.
3. Thermal Delivery
Producing low-pressure steam directly, replacing coal-fired boilers.
4. Space Constraints
Industrial floors offer limited footprint for large heat exchanger arrays.
Existing Approaches and Technology Readiness
Gas-to-methanol
Separation of CO and CO2, and combining with H2 to synthesize methanol
Reducing agent (syngas)
Converting into higher quality syngas (CO+H2) that can be used for production of ammonia, synthetic hydrocarbons, etc
Where is the white-space for innovation?
The current technology are mostly in pilot to early commercial phase. Variable gas quality, catalyst poisoning, and carbon economics are still the bottlenecks for scaling these approaches. A potential pathway for hydrogen production is also being explored. Such BFG integrated systems are early-stage.
Science Breakthrough
New pathways for biological fermentation, direct electrochemical conversion.
Engineering Innovation
Low-cost and low-energy gas separation (CO2, N2), membrane separation.
Business model
BFG aggregation, carbon utilization service provision, shared industrial utility systems.
How we identify climate innovation opportunities?
- P. Kuo, M. Aziz, (2026), Opportunities and new trends in the valorization of steel manufacturing off-gas for carbon-neutral steelmaking, Renewable and Sustainable Energy Reviews.
- Calculated based on annual CO2 emission from blast furnace burning, and using CCTS (avoided carbon compliance costs) current floating value estimate of ~ 10 USD per ton CO2.
- Bottom up calculation using estimates based on BF-BOF operational assumptions.
Abbreviations: CCUS - Carbon Capture Utilization & Storage, BF-BOF - Blast Furnace - Basic-Oxygen-Furnace
Last Updated On: June 5, 2026
Economic Potential
- ~1,250Mn USD[2]
- ~900Mn USD[2]
Impact Potential
- India, 202575-90 Mn Mt CO2e[3]
- India, 2030100-125 Mn Mt CO2e[3]
Water
Air Pollution
p-ARL Score
8/12
Regulatory Outlook
Implemented
Implemented
Implemented
Spotlight for innovation in India
Research
IIT-B: National Center of Excellence in CCU, with India’s first CCU field lab and spun out a startup UrjanovaC
Industrial CCUS, and automotive engine carbon cleaning services, India’s first CO2 capture plant directly from blast furnace gas in Jamshedpur (Tata Steel)