Govt. may launch green steel mission with policy prescriptions and incentive schemes, steel secretary

New Delhi: India may look at having a procurement policy to generate demand for ‘green steel’ and get the industry to adopt environmentally sustainable manufacturing, steel secretary Sandeep Poundrik said on Tuesday, signalling a hefty push for decarbonization.

The move comes amid mounting global pressure on countries to cut the carbon footprint in manufacturing, notably a move by the European Union to impose a 25% ‘carbon tax’ on its imports of steel and aluminium among other goods.

Speaking at a function organized to launch a steel ministry report - Greening the Steel Sector in India: Roadmap and Action Plan - Poundrik said a set of incentives may also be considered, particularly for small steel producers, to enable industry to raise the bar on environmentally sound practices.

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“The first task of the steel ministry moving forward post the presentation of the report based on extensively researched reports given by 14 task forces would be to come out with a definition of green steel. But the 14 reports also have a report on taxonomy, so we will move forward from there,” the steel secretary said.

As an implementation strategy, the steel ministry will launch a green steel mission soon, on the lines of green hydrogen mission, which will have components of policy, incentives and the way forward, Poundrik said. 

Global environmental objectives

Steel and heavy industries minister H.D. Kumaraswamy, who released the report said that as one of the world's leading steel producers India’s steel sector is the backbone of country’s industrial strength and drives economic growth across key sectors such as construction, infrastructure and manufacturing.

“However, as we expand, it is imperative that we align this growth with global environmental objectives. Sustainability is no longer a choice. It is an essential obligation,” the minister said.

The 14 task force reports suggested that the country needs both demand and supply side initiatives to facilitate greening of the steel sector. It said the ministry is keen to generate demand for green steel in India by developing the framework for a Green Public Procurement (GPP) policy for steel, which could then be taken up by the finance \ministry for development and action.

The report RECommended that the ministry of steel set up an agency along the lines of Energy Efficiency Services Ltd, a ministry of power promoted energy services company, for bulk procurement of green steel to facilitate consumption in both public and private procurement. It also suggested prioritizing the development of an ecosystem for green steel production and consumption by creating a robust MRV (measurement, reporting and verification) system for emissions accounting, a registry of green steel production and consumption, and tracking of green steel certification.

The ministry should coordinate with the Bureau of Energy Efficiency (BEE) to develop a protocol for measuring emissions from all the sector steel plants, it said.

Green hydrogen projects

The report has also called for government support to pilot projects across the three main end-use applications of green hydrogen -- hydrogen uptake in the blast furnace, hydrogen blending in shaft furnace and a 100% hydrogen-based DRI (Direct Reduced Iron) plant. 

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Further, it said the steel ministry may coordinate with other ministries to extend benefits provided to green hydrogen projects in the refinery and fertilizer sector to the steel industry as well.

Fertilizers are one of the sectors that will attract the EU carbon tax.

The Ministry of Steel may also develop experimental blast furnaces and shaft furnaces in India for trials with hydrogen injection. Further, the efforts at international and multilateral collaborations may be accelerated to derive maximum benefits for accelerating the adoption of green hydrogen in the Indian steel industry, the report said.

The 14 task forces on decarbonization covered crucial areas such as energy efficiency, renewable energy, green hydrogen, biochar and carbon capture technology, while delving with policy levers of green steel taxonomy, CO2 monitoring, and green steel demand generation.

Initiated in March 2023, the report is culmination of work involving about 130 consultations sessions with more than 200 stakeholders. 

Additionally, the report addresses four crucial enablers for transition -- finance, international focus, skill development and R&D. Through these focus areas, this report offers an analysis of the steel industry's current state and outlines actionable strategies for its transformation.