Establishing actionable pathways to catalyze green steel manufacturing in India

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In its journey to achieve net zero by 2070, India has set an ambitious and achievable roadmap, including the target to reduce total projected carbon emissions by one million tonnes by 2030 and reduce the carbon intensity of the economy by less than 45%.

As the nation adopts the “panchamitra” or five-pronged strategy towards decarbonization, the assessment of the role of heavy industries that are crucial in driving economic progress while being large-scale emitters of greenhouse gases becomes a strategic priority.

The steel industry is a key player in the National Hydrogen Mission and, in addition to implementing advanced clean technologies, creating carbon sinks and improving the quality of raw materials – two pilot plants are being built under a public-private partnership model to explore the use of green hydrogen in direct reduction iron (DRI) production.

Recently, NITI Ayog also predicted India to become a global hub for green steel manufacturing with a capacity of 15-20 million tonnes by 2030, paving the way for the widespread use of green steel in the world.

Increase production, reduce intensity

Like the world second biggest Crude steel producer India plans to more than double its production targets to 300 million tonnes by 2030 and almost five times to 500 million tonnes by 2047 from 120 million tons in March 2022, 18% more than in 2021.

Today, with coking coal – 85 percent of which is imported – serving as one of the two main raw materials in the production of steel, the sector contributes about 9 percent of the country’s total greenhouse gas emissions in addition to accounting for a fifth of the consumption of industry energy, according to the IEA Iron and Steel Technology Roadmap. With more than 977 steel mills, the country has set out its plans to reduce carbon dioxide emissions intensity – having already reached a reduction from 3.1 Tonne/tonne of crude steel (T/st) in 2005 to approximately 2.6 T/st by 2020 – and aims to reduce it further to around 2.4 T/st by 2030.

The backbone of green steelmaking

It would be interesting to go further to evaluate the technology available today to manufacture green steel. Typically, steel is produced using either an integrated blast furnace/basic oxygen furnace (BF/BOF) or an electric arc furnace (EAF) with coal used as a reductant. Green hydrogen has opened up new possibilities to pivot towards green steelmaking, with advanced technologies helping to reduce emissions.

DRI or Sponge Iron, which requires less capital and provides an alternative steel production route to BF/BOF or EAF scrap, has experienced large-scale growth. However, it also acts as a barrier to making energy efficiency investments. On the other hand, the use of natural gas as a reductant is gaining ground in several markets that benefit from an abundant supply of natural gas. This not only reduces the need for coking coal, but also reduces associated emissions, such as sulfur oxides and carbon dioxide, with a recent study estimating that natural gas-based DRI has a greenhouse gas footprint. 33-41% less greenhouse gas than coal-based DRI.

Exploring new avenues for the manufacture of “green steel”

One avenue to promote green steelmaking is the use of advanced gas turbine technology (GTG) which can lead to around a 10-15% increase in efficiency. Today, GTGs are increasingly being deployed by global steel majors to achieve up to 70% reduction in emissions. Indian steel mills producing Blast Furnace Gas (BFG) can reuse and utilize existing unused gas assets in the country, underscoring their commitment to Scope 3 emissions.

Another strategic approach is to adopt the use of renewable energy, including green hydrogen, which replaces fossil fuels both in the manufacture of iron pellets and also for carbon purification. With India’s emphasis on harnessing renewable energy sources, the steel industry can not only reduce the use of fossil fuels, but also reduce carbon dioxide emissions. It is estimated that green hydrogen can help reduce the energy consumed by blast furnaces by 15-20%.

A third equally important step is to encourage the blending of green hydrogen and gray hydrogen – derived from natural gas – which will help to significantly reduce overhead costs as well as emissions. A significant change will occur with the arrival of larger electrolysis facilities, which will help reduce the price of green hydrogen by up to 60-80%.

These innovative processes that leverage the benefits of renewable and cleaner energy sources and effectively integrate them into production processes will enable Indian steelmakers to deliver on their commitment to go green.

A quadruple advantage

The benefits of green steelmaking are fourfold: first, the reduction in dependence on imported coal, a growing concern that is compounded by the increased coking coal prices; second, to support national goals to switch to hydrogen and clean energy; third, to highlight their environmental, social and governance principles taking into consideration even scope 3 emissions.

And, finally, it will add to our national advantage by giving Indian steelmakers the opportunity to expand into global markets and share their know-how.

be the largest exporter of carbon credits with plans to have its own uniform carbon market in one year (2023) as a major avenue of financing for energy transition projects and the reduction of emissions, the transformation of the country’s steel market by drawing leveraging the power of clean sources will increase the place in the energy value chain. The combined power of renewables, hydrogen and gas as a viable path to a cleaner future – and a greener industry – is real and an opportunity to be seized.



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The opinions expressed above are those of the author.



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