India's transition to low-carbon green steel will remain a gradual and long-term process as costs and technology constraints continue to hamper rapid decarbonization, Indian ratings agency ICRA said in a report on the steel sector on Wednesday, January 21.
According to ICRA, the carbon dioxide emission intensity of Indian steel mills averages about 2.5 million tonnes of CO2 per metric tonne of steel, and is about 12 percent higher than the global average for the blast furnace-converter route
The government's recent introduction of a 'Green Steel Taxonomy' under the National Green Steel Mission marks a positive step by setting differentiated emission thresholds for determining what qualifies as green steel, ICRA said. However, most Indian primary producers are now well above even the high end of this green band, highlighting the significant decarbonization gap that needs to be bridged, the ratings agency said in a report.
Planned additional capacity of about 80-85 million tonnes in India by 2030-31 is heavily skewed towards the BF-BOF coal route, which will increase its share from about 45 percent currently to approximately 51 percent.
Consequently, the near-term decarbonization of the domestic steel industry will largely depend on improved operational efficiencies and greater adoption of renewable energy, which is expected to reduce emissions intensity by approximately 19 percent by 2029-30 and reduce the industry average to approximately 2.0 million tonnes of CO2 per tonne by the end of this period. decade. The bulk of this reduction is expected to come from renewable energy integration and process optimization, ICRA said.
The report said domestic steel mills have already announced about 9 gigawatts (GW) of captive renewable energy capacity to replace fossil fuel-based electricity in their operations. Switching to green energy alone is expected to reduce emissions by about 13 percent for blast furnace steelmakers and up to 22 percent for direct reduction steelmakers.
Other operational options such as higher use of scrap in furnaces, energy efficiency measures such as energy recovery are expected
