We are facing an inflexion point in human life. The climate crisis is the greatest challenge of our times. Most of the countries have pledged to reach net zero in a bid to limit the global average temperature rise to 1.5°C. However, various reports suggest that initiatives on decarbonization are not enough, and that we need accelerated efforts to reduce our GHG emissions.
Steel is the world’s 5th largest GHG-emitting industry, contributing around 7-9% of total global CO2 emissions. Amid the global population increase, expansion of cities, rise in infrastructure and housing demand, etc., the appetite for global steel consumption will grow exponentially, particularly in developing economies like India.
At 76 kg, India ranks 81st in per capita steel consumption. This signals that the growth story of the Indian steel industry has just begun. While India envisages doubling its steelmaking capacity to 300 mn tons by 2030, so will the GHG emission contribution from this industry. Additionally, developed countries are constantly updating their regulations for their GHG emission management, for example, EU’s CBAM, putting exports of steel & related products at risk. Hence, decarbonizing steelmaking is of utmost importance.
Decarbonizing EAF/IF steelmaking
The Indian steel industry is well placed to tackle emissions from the steel industry. Here’s why~ 55% of total steel production in India is through the EAF/IF route, as against a global average of ~29%, and decarbonisation of EAF/IF route is a low hanging fruit.
EAF/IF route is a less emission intensive process as compared to the BF-BOF route. Typically, 2.5 to 3.5 tCO2 per ton of crude steel is emitted via BF-BOF route as against ~1.5 tCO2 per ton of crude steel in EAF/IF route.
To decarbonize EAF/IF route, we must switch over to RE power, replace fossil fuels with biodiesel, electrify various furnaces, and continuously improve our energy efficiency. ~70% of total CO2 emissions in the EAF/IF route are due to the usage of fossil fuel-based electricity. Just by replacing fossil-fuel-based electricity with RE power, India can reduce ~22% of its total CO2 emissions from the steel industry. We need a massive ~35 GW of RE power to switch over to RE power.
However, there are a few challenges:
1. Because of the small power requirement and high capex requirement, small scale EAF/IF steel players can’t invest in an RE power plant on their own. One of the solutions could be – the government can develop RE power parks, on its own or in PPP mode, dedicated to these small-scale steel players, and steel players can pay as per consumption.
2. To leverage the full potential of solar energy in India, it is essential that, as a country, we have a uniform mechanism of charges levied per unit of electricity in the form of transmission, open access, electricity duty, etc.
Decarbonizing EAF/IF route can help India lead from the front and emerge as a global leader in green steel manufacturing.
Managing Director, Kalyani Steels Ltd & Director,
Saarloha Advanced Materials Pvt. Ltd.
Decarbonizing BF-BOF route
A commercially viable, large scale solution for decarbonization of BF-BOF route is under development, wherein iron ore pellets are reduced using green H2 as reductant. However, the Green H2 requirement is huge, to put it in perspective; 1 MTPA steelmaking plant would require ~65,000 tons of green H2. Establishment of such technology in India needs focused efforts since there are quite a few research areas, such as:
1. Commercial large-scale production & storage of Green H2.
2. Commercial large-scale production of Green DRI using 100% Green H2.
3. Steelmaking using green DRI in EAF/SAF.
A quicker and more efficient way to do this can be a consortium-based approach where the government becomes the lead anchor while interested stakeholders join the consortium to establish the technology in the country.
