Road Map and Action Plan of Greening the Steel Sector in India

Greening the steel report:

Overview: An overview of the Indian steel Industry. India produces about approximately 7.4% of the global steel output4 and is the second largest producer globally. The Indian steel industry has grown at a compound annual growth rate (CAGR) of 7% since 2004.

During FY 2024, the steel production capacity increased by around 11.3% to 179.5 MT, while crude steel production rose by 13.4% to 144.3 MT.

?India produced approximately 51.56 million tonnes of sponge iron, making it the largest producer globally. Additionally, India is also the second-largest consumer of steel in the world. The finished steel consumption in India grew by 13.7% to 136.29 MT during FY2023-24. India is a net importer of steel.

During FY2023-24, India exported 7.49 MT of finished steel while importing 8.32 MT of finished steel. However, despite the significant growth in the steel industry, India’s per capita steel consumption is significantly lower than the global average. While the per capita steel consumption in India increased to 97.7 kg in FY 2023-24 from 86.7 kg in FY 2022-23, the global average per capita consumption was 219.3 kg in 20235. Therefore, there is a concerted effort to raise the per capita steel consumption in the country, both in urban and rural areas. The National Steel Policy 2017 aims to increase the production capacity to 300 MT and consequently increase the per capita steel consumption to 160kg per capita by 2030-31.

The "Greening the Steel Sector in India Roadmap and Action Plan" outlines strategies for decarbonizing India's steel industry, which is a significant contributor to greenhouse gas emissions. India aims to transition to a sustainable steel production model by enhancing energy efficiency, increasing the use of renewable energy, and implementing carbon capture technologies. The report highlights the need for a comprehensive definition of "green steel," development of monitoring frameworks, and strategies for financial support, while emphasizing the importance skill development in the workforce.

?To achieve these goals, 14 task forces have been established to address various aspects of decarbonisation in the steel sector.

Challenges face by Indian Steel Industry:

?The primary challenges facing India's steel industry in achieving decarbonization include:

1. High Emission Intensity: The steel sector in India has a significantly higher emissions intensity (2.54 T CO2/T Crude Steel) compared to the global average (1.91 T CO2/T Crude Steel), primarily due to reliance on coal-based processes.

2. Limited Access to Low-Cost Alternatives: The availability of affordable low-carbon fuels, such as natural gas, is limited, making it difficult to transition from coal-based technologies.?

3. Resource Constraints: India faces challenges related to the availability of high-quality scrap, which is essential for low-emission steel production. The country relies heavily on low-grade iron ore and coal, which increases energy consumption and emissions.

4. Inadequate Infrastructure: There is a lack of infrastructure for monitoring, reporting, and verification (MRV) of emissions, which complicates the tracking of progress toward decarbonization goals.

5. Financial Barriers: High capital costs, uncertainty surrounding low-carbon technologies, and limited access to finance create significant hurdles for investment in green initiatives.

6. Technological Maturity: Many green technologies, such as hydrogen-based processes and carbon capture, utilization, and storage (CCUS), are still in the experimental or early deployment stages and may not yet be commercially viable.

7. Industry Fragmentation: The sector is fragmented, with a mix of large integrated steel plants and numerous small-scale units, leading to variability in capabilities and resources.

8. Regulatory and Policy Challenges: There is a lack of clear and supportive policies for decarbonization, creating uncertainty for industries looking to invest in green technologies.

9. Shortage of Skilled Manpower: A deficiency in skilled manpower to implement and manage new green technologies can slow down the transition process.

10. Global Market Dynamics: Fluctuations in global steel demand and pricing can impact the willingness of companies to invest in long-term decarbonization strategies.

?

?Policy Framework and Government Initiatives:

• The Indian government has established 14 task forces to decarbonize the steel sector, focusing on energy efficiency, renewable energy integration, and green finance. These policies support the transition to green steel, with measures like defining green steel, creating demand through government procurement policies, and providing funding for low-carbon technologies.

Potential impact of GPP for select few projects:

Green Hydrogen Projects:

• Jindal Stainless Limited: Launched India’s first green hydrogen plant in Hisar, aiming to reduce carbon emissions and align with the government’s sustainable vision. So in Steel as Jindal told can be use in multiple segment, which make it beneficial for long run.

• Kalyani Group: Introduced green steel products under 'KALYANI FeRRESTA', using electric arc furnaces powered by renewable energy and over 70% recycled scrap material.
• Arceller mittal Nippon STEEL LTD & TATA Steel : Taken several initiative.
• Jindal Steel and Power : With Visionary chairman already started production to delivery upto customer premises in green mode.

Technological Advancements

• Green Hydrogen: Identified as the cleanest option for steel production, supported by the National Green Hydrogen Mission aiming to reduce hydrogen technology costs.
• Electric Arc Furnaces (EAFs): Using renewable energy to power EAFs and high-quality scrap can significantly reduce emissions.
• Carbon Capture and Storage (CCS): Piloted to reduce emissions from blast furnaces, though high costs currently limit scalability.
• Innovations in Material Efficiency: Direct reduction using lower-grade iron ores without sintering, improving efficiency.

Carbon Footprint Reduction:

• Current Emissions: The steel industry in India emits approximately 242 million tonnes of CO2 annually. Major producers aim to achieve net-zero emissions well before 2070.
• Projected Reductions: Integrating green hydrogen and renewable energy could reduce emissions by 30-50% by 2030 and up to 70% by 2040.

Future Roadmap

Policy and Market Incentives: Government can create demand for green steel through mandatory procurement policies and tradable green steel certificates. Viability gap funding can help with initial capital costs for low-carbon technologies.

Renewable Energy Integration: Integrating renewable energy into steel production is crucial. Policy drivers to incentivize renewable power adoption and captive renewable power facilities are essential steps.

Skill Development and Workforce Transition: As the industry transitions, skilling, upskilling, and reskilling the workforce is necessary. Educational institutions must adapt to the evolving demands of the steel industry.

Global Collaboration and Financing: Global sustainable finance markets can significantly support decarbonizing the steel sector. Innovative financing products and technical assistance will aid green steel projects.

Research and Development: Continuous R&D is essential for developing new technologies. Collaborative efforts between industry, academia, and government can drive innovation in green steel production.

Consumer Awareness and Demand: Raising consumer awareness about green steel benefits is vital for market demand. Businesses can use green steel certificates to highlight their sustainability efforts.

Conclusion India's journey towards green steel production involves significant initiatives and robust policies. The path ahead requires continued innovation, policy support, and market incentives. Collaborative efforts among government, industry, and the global financial community are crucial to achieving a sustainable and decarbonized steel industry, aligning economic growth with environmental sustainability.

For further details, explore reports from IEEFA, Green Steel Report shared by Ministry of Steel , Mobility Outlook, and resources from ArcelorMittal and SolarQuarter.

#GreenSteel #SustainableIndustry #IndiaClimateGoals #Decarbonization #RenewableEnergy #SteelIndustryInnovation #NetZeroEmissions