India on Thursday became the first country in the world to define “green steel” – emissions lower than a 2.2 per tonne of carbon dioxide per tonne of finished steel produced – while announcing a “star-rated grading system for such green steel”. A nearly 37 per cent public procurement of these “costlier offerings” has been suggested to push manufacturing and aid adoption of the technology switch-over.
As per the steel ministry, Green Steel has been defined in “percentage of greenness of the steel”, which is produced from the plant with carbon dioxide equivalent emission intensity of less than 2.2 tonnes of carbon dioxide emission (CO2 e) per tonne of finished steel (tfs).
The greenness of steel shall be expressed as a percentage based on how much the steel plant’s emission is lower than the 2.2t-CO2e/ tfs threshold.
The star rating system so introduced is also on the basis of “this greenness”. For instance, the best quality steel which has a five star rating will have an emission intensity lower than 1.6t-CO2e/tfs; a four star rating will be for steel with emission intensity between 1.6 and 2.0t-CO2e / tfs; while a three star rating will be for emission intensity between 2.0 and 2.2 t-CO2e/tfs/
Any steel having an emission higher than 2.2 t-COe2 / tfs will not be considered as green steel, a senior ministry official told buisnessline.
The average emission for India’s steel industry at present stand at around 2.6 – 2.6 t-CO2e/ tfs. Different steel companies have different emission numbers depending on the method of steel production.
The steel industry accounts of 7 per cent of the global carbon dioxide emissions.
“The green steel taxonomy will help set a benchmark for adopting global best practices and help India emerge as global leader in green steel production,” HD Kumaraswamy, Union Minister of Steel, said.
Green Steel Policy
The Ministry is also working on a ₹15,000 crore Green Steel Mission, which will include public procurement policy for such decarbonised offerings. It will also continue to explore financing options to support technology switch-over for companies.
An at least 37 per cent public procurement is being proposed if the green steel is of five star grade. And around 30 per cent public procurement is being worked out for any green steel offering, sources say.
“Public procurement will vary depending on the star rating of the steel,” the official said adding that various incentives for smaller steel companies are under consideration too.
According to the official, the Ministry is already looking at financing or support from international agencies that include World Bank and Asian Development Bank, apart from taking up discussions with the Union Finance Ministry on funding the Green Steel Mission.
“Funding details are being worked out and the Ministry is in talks with international agencies like World Bank and others. So in the next few months, these will be finalised in discussion with the Finance Ministry,” the official said.
The Steel Ministry has in an internal document mentioned that the switch to green steel – use of hydrogen and use of other methods like biochar to replace the existing coal-based blast furnace route processes – would require an industry capex of close to ₹260,000 – 270,000 crore. Accordingly, support for this is being worked out.
….CONSIDERING SAFEGUARD DUTY ON STEEL: MINISTER
India is exploring safeguard duty options against rising imports coming in primarily from other Asian nations, including those it has an FTA with, Union Minister of Steel HD Kumaraswamy said on Thursday.
The country’s steel sector has been struggling against cheap Chinese imports, while shipments from some of the FTA countries like Vietnam have seen a substantial rise. It is being alleged, Chinese steel-makers are re-routing cheaper offerings from coutnries like Vietnam using FTA loopholes.
The ministry has sought imposition of 20 – 25 per cent safeguard duty or a temporary tax for two years on flat-steel products to curb cheap Chinese imports, sources said.
“The process for considering safeguard duty is on,” Kumaraswamy said on the side lines of an event here.