Steel Sector Targets Carbon Neutrality by 2047, Says Naveen Jindal

India’s steel industry plays a crucial role in the nation’s economic development and is a key contributor to infrastructure, manufacturing, and industrial growth. However, the industry also faces mounting pressure to address its significant carbon footprint. With the commitment to achieve net zero carbon emissions by 2047, as stated by Jindal Steel Chairman Naveen Jindal at the ISA Steel Conclave, the Indian steel sector is positioning itself as a leader in sustainable industrial transformation. This target aligns with India’s broader goal to achieve net zero by 2070, emphasizing the country’s dedication to climate change mitigation.

This report examines the decarbonisation initiatives in the Indian steel sector, the challenges involved, and the future trajectory of the industry within the global context of sustainability, competitiveness, and innovation.

The Steel Sector's Commitment to Decarbonisation

The Indian steel sector has made decarbonisation a top priority, reflecting the growing global consensus on addressing climate change. Steel production, historically reliant on carbon-intensive processes, has contributed significantly to greenhouse gas (GHG) emissions. According to the World Steel Association, the sector accounts for 7-9% of global CO2 emissions, making it one of the most energy- and emissions-intensive industries.

Naveen Jindal emphasized the industry's commitment to decarbonisation, focusing on:

• Net Zero by 2047: The steel sector's goal of achieving net zero emissions 23 years ahead of India's national target of 2070.
• Collaborative Efforts: Task forces, set up by the Ministry of Steel, aim to develop strategies to reduce emissions and drive innovation across production processes.
• Government Support: Prime Minister Narendra Modi's government is strongly committed to reducing India’s carbon footprint, fostering a conducive policy environment for decarbonisation in steel production.

Challenges to Decarbonisation

1. High Energy Consumption and Emission-Intensive Processes: Traditional steelmaking processes, especially the use of blast furnaces that rely heavily on coal, are inherently high in carbon emissions. Transitioning to electric arc furnaces (EAF) or using hydrogen-based production methods remains capital-intensive and requires significant technological advancements.
2. Raw Material Dependence: The sector’s dependence on carbon-intensive raw materials such as coal and iron ore makes it difficult to shift to greener alternatives like green hydrogen or biochar. While initiatives such as biochar use in blast furnaces are underway (e.g., at SAIL’s Rourkela Steel Plant), scaling these technologies remains a long-term challenge.
3. High Costs of Decarbonisation: Decarbonisation comes with high costs, including investments in new technology, retrofitting of existing infrastructure, and the need for clean energy. Developing carbon capture and storage (CCS) technologies, hydrogen infrastructure, and renewable energy sources will require substantial financial commitment.
4. Competition from Cheaper Imports: In addition to carbon-related challenges, the industry faces competitive pressures from cheap steel imports, particularly from China. These imports, often priced below domestic production costs, pose risks to the industry’s financial sustainability and the broader decarbonisation agenda.

Decarbonisation Strategies and Opportunities

1. Technological Innovation: The path to decarbonisation lies in the adoption of green technologies such as hydrogen-based steelmaking, carbon capture and storage (CCS), and renewable energy integration. Emerging technologies such as Stilfold's steel-folding technique and the use of AI for optimizing production can significantly reduce resource consumption and emissions.
2. Renewable Energy Integration: Steel producers like ArcelorMittal and Shyam Metalics are already making strides in integrating solar energy into their production processes. Expanding renewable energy usage across the sector will reduce reliance on fossil fuels and lower emissions.
3. Government Policies and Support: The Indian government’s initiatives, such as Production-Linked Incentives (PLI) and policies for promoting green hydrogen, provide crucial support for the steel industry’s transition to a low-carbon future. Further, border adjustment taxes and higher import duties, as advocated by Union Steel Minister H.D. Kumaraswamy, will protect domestic producers from cheaper, carbon-intensive steel imports.
4. Circular Economy and Scrap Recycling: A shift towards a circular economy approach, with a greater focus on recycling steel scrap, can significantly reduce the need for primary steel production. The use of electric arc furnaces (EAFs), which rely more on scrap steel, presents an opportunity to lower carbon emissions while also conserving raw materials.
5. Carbon Pricing and Carbon Markets: Implementing carbon pricing mechanisms such as carbon credits or participating in global carbon markets could incentivize companies to reduce emissions and invest in cleaner technologies. India’s recent engagement with CBAM (Carbon Border Adjustment Mechanism) underlines its efforts to stay competitive in global trade while addressing environmental concerns.