An authored article by Mr Anil Kumar Chaudhary, Group CEO – Metals & Mining, Essar Capital was published by The Economic Times.
Steel is one of the core pillars of today’s society and as one of the most important engineering and construction materials, it is present in many aspects of our lives. Currently the steel industry is among the three biggest producers of carbon dioxide. Consequently, steel players across the globe are increasingly facing a decarbonization challenge to reduce its carbon footprint from both environmental and economic perspectives.
India is currently the world’s second largest steel producer. The 2017 National Steel Policy of India set out the ambition to treble production capacity by 2030. Various analysis shows potential for a multi-fold increase in steel consumption by 2050. Production of steel in India is set to increase significantly over the next few decades, to meet the increasing domestic and international demand.
If we want to limit global warming to between 1.5 and 2 degrees, we will have to make ambitious steps towards net-zero carbon emissions within the next 10 to 20 years. Meeting this challenge will require re-inventing almost all sectors of our modern life. During the recently concluded COP 26 at Glasgow, India committed to become net-zero by 2070. Approx 7% of greenhouse gas (GHG) emissions come from the steel sector with every ton of steel produced normally emits on average 1.85 tons of carbon dioxide. The steel sector has to play a significant role in achieving this commitment. Although critical for economic growth, the iron and steel sector is energy- and resource-intensive. Rapid growth of Indian steel demand will have significant energy, environmental, resource and economic consequences. Today, the iron and steel sector is already the largest industrial sector in terms of energy consumption. Accordingly the development and adoption of energy-efficient and latest technological innovations in steel manufacturing are extremely critical.
Decarbonisation in Steel Industry could be achieved in the following ways:
Use of Carbon Capture, Utilisation and Storage
Steel plants make ideal candidates for carbon capture because most of their emissions can be captured directly from their process-gas and off-gas. This captured carbon can be sold back into the market, enabling producers to keep their costs low while making substantial progress towards global net zero objectives or it can go into safe long-term storage. The captured CO2 from steel plants can be harnessed as a raw material, for example, by combining with water and steel slag to create building materials. Tata Steel has installed India’s first blast furnace carbon capture plant in 2021 which captures 5 tonnes of CO2 per day which is reused on site.
Use of Syngas
Syngas is usually a product of coal gasification and the main application is electricity generation. Using the syngas is potentially more efficient than direct combustion of the original fuel. Syngas may be used to generate a high quality reducing gas for production of DRI. This technology is being used by JSPL’s steel plant at Angul, Odisha.
Use of Green Hydrogen
Green hydrogen-based steelmaking can reduce our import dependence on coking/non-coking coal and make India self-reliant. Any investment in blast furnaces today will lock in imported coal demand for mid-century and beyond. Replacing coal by hydrogen generated with renewable energy (Green Hydrogen) would make it possible to largely decarbonise the industry. At current price levels, replacing coal with hydrogen would drive up the price of steel. This gap will likely narrow in the coming years, and could disappear by 2030, as carbon and carbon-emission pricing could drive up the cost associated with the use of coal on one side, while, on the other side, the decreasing costs of renewable electricity, efficiency gains resulting from larger-scale production of hydrogen, and optimisation of the hydrogen-based steel-making processes will drive down the costs of this alternative. India can become a leader I Green Steel production with groups like Reliance and Adani entering Green Hydrogen sector.
Use of Solar Power
Traditional steel production uses large amounts of fossil fuel energy to generate the temperatures needed. The energy generated from fossil fuel can be replaced by energy generated by Solar Power in Steel Plants in India’s main steel producing states like Odisha & Chhattisgarh, both of which have abundant sunshine. Solar power has an added advantage of being the lowest cost power in India today as well.
Through Adopting Energy Efficiency Measures
The steel industry is exposed to international competition and energy-efficient steel production can be a competitive advantage apart from reducing the energy consumption. Improving energy efficiency is one way for process industries to reduce costs, and energy-saving technologies can be attractive from a business point of view. Improved energy efficiency can be achieved by adopting more efficient technologies, energy recovery in the manufacturing process, increased energy conversion efficiency, and optimisation of operational practices
Through Recycling Steel Scrap
Recycling steel reduces the need to mine for more ore and saves energy while lowering greenhouse gas emissions. Steel can be recycled an infinite number of times and it doesn’t lose any of its properties in the process. This takes a non renewable resource and makes it renewable. Steel recycling uses roughly half the energy of primary steel production, which mean less carbon emissions.
India’s decarbonisation strategy has to be a combination of all of the above ways. PHD Chamber of Commerce & Industry is committed to assist the stakeholders & the Central and State Governments in promoting Decarbonisation by Industry and Commercial enterprises. The Minerals & Metals Committee and Power, Renewable & Alternate Energy Committee of PHDCCI has been working to prioritise policy reforms and promote sustainable development goals to achieve the ambitious decarbonisation & RE target & to support the Government in building an Atmanirbhar & Green Bharat.
By Anil Kumar Chaudhary,
(The writer is Group CEO – Metals & Mining, Essar Capital Ltd. Ex-Chairman, SAIL and Chairman, Minerals and Metals Committee, PHDCCI)
Source: The Economic Times