India’s steel expansion could hinder net zero emission goal, GEM says

Sub : Env

Sec : Climate change

Context:

India‘s plans to ramp up coal-powered steelmaking capacity could impede the country’s goal of net-zero carbon emissions by 2070, Global Energy Monitor (GEM) said.

Key Findings from the GEM Report:

Coal-Driven Steel Expansion:
- India is investing heavily in coal-based steelmaking, with most new capacity relying on emissions-intensive blast furnaces.
- These investments risk creating $187 billion in stranded assets (projects that may become obsolete before earning back their costs).
Carbon Emissions:
- Additional blast furnace capacity could lead to 680 million metric tons of carbon dioxide-equivalent emissions from the steel sector.
- India’s steel industry currently emits 2.55 metric tons of CO₂ per ton of crude steel, 38% higher than the global average of 1.85 tons.

Current and Projected Steel Production:

Current capacity: 180 million metric tons.
Target for 2030: 300 million metric tons.
India is the world’s second-largest crude steel producer after China.
India has the world’s largest pipeline of steelmaking capacity under development- projects that have been announced or are in the construction phase- totalling around 258 million metric tons per year.

Energy Sources in Steelmaking:

85% of energy used in the steel sector comes from coal.
Steelmaking technologies under development:
- Blast furnaces: Account for 69% of new steel capacity.
- Electric arc furnaces: Only 13%, despite being less carbon-intensive.

Initiatives to Reduce Emissions in India’s Steel Sector:

Technology Adoption:

Green Hydrogen in Steelmaking:
- Promoting the use of green hydrogen as an alternative to coal in Direct Reduced Iron (DRI) processes.
Electric Arc Furnaces (EAFs):
- Expanding the use of EAFs, which rely on recycled steel and electricity, producing significantly lower emissions compared to coal-based blast furnaces.
Carbon Capture, Utilization, and Storage (CCUS):
- Developing CCUS technologies to capture emissions from blast furnaces and utilize or store the captured carbon.

Policy and Government Initiatives:

National Steel Policy (NSP) 2017:
- Focuses on resource efficiency and reducing the carbon footprint of the steel industry.
- Encourages the adoption of green and sustainable practices in steel production.
Perform, Achieve, and Trade (PAT) Scheme:
- Implemented by the Bureau of Energy Efficiency (BEE) to enhance energy efficiency in energy-intensive industries, including steel.
- Incentivizes industries to reduce emissions by trading surplus energy savings.

Collaboration and Partnerships:

Steel Scrap Recycling Policy (2020):
- Encourages the use of recycled steel to reduce dependency on primary production, which is more carbon-intensive.
- Promotes a circular economy approach in the steel sector.
International Solar Alliance (ISA):
- Promotes the use of solar energy in steel plants for processes like pre-heating and powering operations.

Renewable Energy Integration:

Renewable Energy Purchase Obligations (RPOs):
- Steelmakers are integrating renewable energy sources like solar and wind for operational energy needs.
Transitioning to electricity from renewables for EAF-based production.

Source: TH