Date: 17/05/2023
Relevance: GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
Key Phrases: decarbonisation, green steel, carbon capture, utilisation and storage, material efficiency, Sustainable development, Carbon Capture, Utilization, and Storage, scrap-based steel-making.
Context:
- India's steel industry is set to experience significant growth, with crude steel production projected to reach 435 million tonnes by 2050.
- However, the current reliance on coking coal-based steel-making poses environmental challenges, contributing to 11% of the country's emissions.
- To mitigate this, an accelerated transition to hydrogen-based steel-making, coupled with a carbon price of $50 per tonne, can catalyze a shift towards greener steel production.
- This not only reduces emissions but also opens opportunities for India to build a sustainable and globally recognized green steel manufacturing hub, with potential cost savings and lower cumulative emissions by 2050.
What is Decarbonisation?
- Decarbonization refers to the process of reducing or eliminating carbon dioxide (CO2) emissions and other greenhouse gas emissions from various sectors of the economy, such as energy, transportation, industry, and agriculture.
- The goal of decarbonization is to mitigate climate change and limit global warming by transitioning to low-carbon or carbon-neutral technologies and practices.
- The decarbonization of India's steel industry holds immense significance for sustainable development and reducing carbon emissions.
Significance:
- Carbon emissions: India's steel industry currently accounts for about 11% of the country's emissions. Decarbonization is crucial to achieve climate goals and mitigate the adverse effects of climate change.
- Sustainable development: Decarbonizing the steel industry aligns with sustainable development goals by reducing environmental impact and promoting cleaner production practices.
- Global commitments: India's commitment to international climate agreements, such as the Paris Agreement, necessitates a shift towards low-carbon industries like steel production.
- Economic opportunities: Building a greener steel industry can position India as a global hub for green steel manufacturing, attracting investments, creating jobs, and enhancing economic competitiveness.
Challenges:
- Technological barriers: The adoption of low-carbon technologies, such as hydrogen-based steel-making, is still in the early stages and faces challenges related to cost, scalability, and infrastructure development.
- Cost implications: The transition to decarbonized steel production may result in increased production costs, which can affect the competitiveness of the industry and lead to higher prices for housing and automobiles.
- Availability of resources: India's reliance on coking coal for steel-making poses challenges in terms of availability, quality, and rising global demand, especially as the industry expands.
To Facilitate The Decarbonization Of The Steel Industry in India, Several Actions Can Be Taken:
- CO2 Pricing:
- Introducing CO2 pricing, such as carbon taxes or carbon trading mechanisms, encourages investments in low-carbon technologies and accelerates the adoption of hydrogen-based steel-making.
- It creates incentives for steel manufacturers to reduce emissions and transition towards cleaner production processes.
- Material Efficiency:
- Promoting scrap-based steel-making, which has lower carbon emissions, requires policies that incentivize scrap collection and recycling.
- This includes setting up dismantling, collection, and processing centers to scale up domestic scrap-based steel-making.
- This reduces reliance on coking coal and fosters a circular economy in the steel industry.
- Green Steel Consumption:
- Encouraging the use of green steel in end-use sectors, such as construction and automotive industries, can drive demand for low-carbon steel.
- Setting targets for embodied carbon in public and private projects incentivizes the adoption of green steel.
- This creates a domestic market for green steel, supporting domestic steel-makers and boosting their competitiveness.
- Incremental Decarbonization Measures:
- Existing steel assets can undergo energy-efficiency improvements and process optimizations to achieve significant emission reductions.
- Measures like increased usage of scrap in the BF-BOF process, sourcing green power, and implementing biomass utilization and process control systems contribute to decarbonization.
- Carbon Capture, Utilization, and Storage (CCUS):
- Investing in CCUS technologies provides an important lever for reducing emissions in the steel industry.
- Research and development efforts should focus on reducing capture costs and establishing CCUS hubs in steel-producing centers.
- This enables capturing and storing carbon emissions, mitigating their environmental impact.
What is Green Steel?
- ‘Green steel’, or the steel produced through processes that do not emit carbon dioxide, essentially means using hydrogen as the ‘reducing agent’ (remover of oxygen) in steel production.
- In other words, iron ore is basically iron oxide and hydrogen is used to pull oxygen away from iron oxide, leaving pure iron behind—to which a little carbon is added to make steel.
- Right now, carbon, in the form of coke, has been used for pulling away oxygen; when carbon joins hands with oxygen it becomes carbon dioxide, which is today mankind’s greatest enemy.
- Hydrogen can do the job of coke just as well.
- Much of Indian iron ore is unsuitable for making green steel.
- According to Australia’s Commonwealth Industrial and Scientific Research Organization (CSIRO),66 per cent of India’s (and Australia’s) iron ore is not suitable for being made into green steel.
- This is because Indian iron ore is low-grade. Low-grade iron ore can only be made into steel in blast furnaces—huge cooking pots in which iron ore is melted and made to combine with coke, before being poured into moulds for making steel slabs.
- For technical reasons, green steel making requires the ‘electric arc furnace’ route; EAFs need high-grade ores, in which iron content is over 60 per cent.
Conclusion:
- India's steel industry faces both opportunities and challenges in its path towards sustainability.
- With the projected growth in steel production, there is a pressing need to address the industry's significant carbon emissions.
- An accelerated transition to hydrogen-based steel-making, supported by the implementation of CO2 pricing and policies for material efficiency, can pave the way for a greener steel sector.
- Incremental measures such as energy efficiency improvements and investments in carbon capture technologies are also crucial.
- While these actions may increase production costs and result in higher prices for housing and automobiles, the long-term benefits are substantial.
- Lower cumulative emissions, forex savings, and the establishment of a global green steel manufacturing hub make an accelerated decarbonization scenario a compelling choice for India's steel industry.
- By embracing sustainable practices from the outset, India can build a steel sector that not only meets growing demands but also contributes to a greener and more prosperous future.
Source: The Hindu BL
Mains Question:
Q. Explain the various actions that can be taken to facilitate the decarbonization of the steel industry in India. (150 Words).
