Green steel can shape India’s climate goals trajectory, Pg6

Key Highlights:

• India committed to a revised Nationally Determined Contribution (NDC) at COP30 in Belém, Brazil, signaling a push for economy-wide decarbonization.
• The steel sector in India accounts for approximately 12% of the country's carbon emissions, with production projected to more than triple to 400 million tonnes by mid-century.
• The government released the Greening Steel Roadmap in September last year and the Green Steel Taxonomy in December 2024, formalizing a definition for green steel.
• Policy incentives to shift investment away from coal-based blast furnaces are yet to materialize, posing a risk of India continuing to use outdated technologies.

Detailed Insights:

• India faces the challenge of balancing continued development with long-term climate targets, making it vital to avoid locking in high-carbon infrastructure in the steel sector.
• Global initiatives like the European Union's Carbon Border Adjustment Mechanism (CBAM) are driving the shift to cleaner steel production, potentially impacting countries that do not adopt low-carbon practices.
• Indian steel companies like Tata Steel, JSW Steel, JSPL, and SAIL are exploring various decarbonization methods, including hydrogen injection, renewable power purchase agreements, and green hydrogen integration.
• Overcoming barriers to green steel production requires addressing the limited supply and high cost of green hydrogen, insufficient renewable energy, and the informal nature of the scrap market.
• Government intervention is needed to set clear carbon emission targets, roll out a carbon pricing regime, socialize the Green Steel Taxonomy, and promote a domestic market for green steel through public procurement policies.
• Natural gas should be prioritized as a transition fuel, and the government should establish hubs for green steel development to share infrastructure costs and provide fiscal support to steel producers, especially smaller players.

Key Concepts Involved:

• Nationally Determined Contribution (NDC): A climate action plan to reduce emissions and adapt to climate change, as pledged under the Paris Agreement.
• Green Steel: Steel produced using methods that significantly reduce carbon emissions, such as using hydrogen or renewable energy.
• Carbon Border Adjustment Mechanism (CBAM): A carbon tariff on imports based on the carbon emissions associated with their production.