Steel Industry calls for subsidies for taking forward the Green Transition

Steel Industry calls for subsidies for taking forward the Green Transition

Representatives of the Steel Industry called for Government support by way of Viability Gap Funding (VGF) for green transition projects and Subsidies for green steel production for achieving the nation’s net zero target by 2070. This was highlighted at the Conclave on Green Steel: India’s Journey towards Low Carbon Steel Manufacturing organized by PHDCCI on 5 July 2024.

Chief Guest of the event, Mr Ashwini Kumar, Economic Adviser, Ministry of Steel, GOI stated that India is in a bright spot in the global steel scenario, being the fastest-growing major economy in the World. Our steel consumption is projected to grow by 10% every year. While other countries discuss excess capacity, in India we are talking about adding the capacity. Mr. Kumar also discussed various constraints such as gas availability and highlighted serious flaws in the EU’s CBAM and emphasised that while our net zero target is set for 2070, the EU aims for 2050. Another constraint he mentioned is the limited availability of scrap, most of which is imported from the EU, due to waste shipment regulations.

Speaking further, he emphasized the need for the entire eco-system to step up in monitoring emissions and accredited professionals to monitor steel plants across the Country.  Mr. Kumar mentioned that there is no single pathway for green transition while highlighting the importance of availability and accessibility of technology. He also stated that for most of the technology, we rely on imports, particularly in capital goods, so our domestic industry needs to step up as demand grows. Integration of domestic makers is extremely important. Green H2 is one area that holds a lot of potential.

 He further emphasized on carbon capture utilization and storage, along with R&D. When looking at multiple pathways, we must minimize the cost of transition. The financing requirement is huge, estimated at 8.5 trillion rupees, and the Ministry is mindful of this. Steel companies should come up with projects aimed at decarbonization, and financing can be mobilized from multilateral development banks, Mr. Kumar concluded.

Mr Anil K. Chaudhary, Chairman, Minerals & Metals Committee, PHDCCI, and Former Chairman, SAIL, in his Theme Address said that the Steel Industry with capacity of ~178 MT and production of ~138 MT has been one of the largest emitters of Green House Gases (GHS) in the Country. The Industry alone is responsible for ~350 MT of CO2 emissions, accounting for 12% of the overall emissions. He exhorted the Industry to achieve the greening across the value chain starting from mine head and ending with consumption of steel. Keeping in view very high quantum of emissions vis-a vis World’s average, it is high time to take substantial measures towards reduction in CO2 emissions in a phased manner so as to achieve net zero position much before 2070, Mr. Chaudhary added.

While praising the efforts made by the Ministry of Steel, GoI and major steel companies in public as well as private sector, he emphasized the need for policy and regulatory interventions on a continuous basis. He stated that measures like defining the Green Steel and setting standards for Green Products, more generation and use of scrap in steel making, creating demand for green steel including mandating use of Green Steel for public infra, Carbon Trading Mechanism, advance breakthrough technologies and solutions like Green H2, Coal Gasification and CCUS through research and development, etc. will go a long way in in decarbonising the India’s Steel Sector. To begin with, the CO2 emissions which are currently at 2.50 t/ tcs must come down to 2.25 by 2030, 1.60 by 2040 and 1.00 by 2050.

 He highlighted that Green Financing would require innovative financing frameworks and mechanisms including blended finance, technical assistance grants, guarantees, risk insurance and concessional capital. He further requested for Viability Gap Funding (VGF) from the Government to take care very high initial capital cost for transition.

Mr Clemens Antretter, Advisor, Indo-German Energy Forum presented on Global Decarbonization of Steel and opportunities for Green Iron Manufacturing in India while highlighting that major companies focus on energy efficiency and steel scrapping. He discussed that achieving net-zero emissions is not possible with coking coal and stressed the importance of making green steel and certifying materials used in public construction to be zero emissions by 2030. He called the green steel policy a big business opportunity for India and its exports.

Dr Ranjeet Mehta, Executive Director, PHDCCI, graced the Conclave. Other eminent speakers at the Conclave included – Mr Naveen Ahlawat, Head – Green Steel & Green Hydrogen, Jindal Steel & Power Ltd; Ms Aparajita Agarwal, Senior Area Manager, Regulatory Affairs, Tata Steel Ltd; Mr Praveen Mishra, Joint Managing Director, LSI Engineering & Consultants.

Topics like Use of Innovative Decarbonisation Technologies in Steel Manufacturing, Use of Green Hydrogen in Steel Manufacturing, Green Steel Through Coal Based DRI & Blast Furnace Route were discussed by eminent experts from ACME Group, Linde Plc, Energy Efficiency Services Ltd, Kanthal of Sweden.

The Conclave was supported by the Ministry of Steel, Government of India and had Indo-American Chamber of Commerce as the Supporting Association, LSI Engineering & Consultants as the Knowledge Partner, Steel & Metallurgy as the Media Partner and Vizag Industrial Scan as the Industry Partner.

The Conclave was supported by PHDCCI annual sponsors, DLF Ltd; Jindal Steel & Power; KLJ Group; Multani Pharmaceuticals Ltd; Marble City; MMG Group; Radico Khaitan Ltd;  Uflex Ltd; Vestige; Eazy ERP Technologies; JK Tyre & Industries Ltd; Sagar Group of Industries; Superior Industries Limited; Samsung India Electronics; Oswal Greentech; Apeejay Stya Group; Blossom Kochhar Beauty Products Pvt Ltd; DCM Shriram;  R E Rogers; Trident Group; Ajit Industries Pvt Ltd;  Bhagwati Plastic and Pipes Industries; Central Coalfields Ltd; DD Pharmaceutical Ltd.;  Hindware Sanitary; Jindal Steel;  Modern Automobiles;  P S BEDI & Co.

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