Syllabus: GS3/Economy;
Context
- Recently, the Indian government has unveiled a comprehensive roadmap known as the Green Steel Mission, worth Rs 15,000 crore aimed at reducing carbon emissions in the steel industry.
Steel Sector in India
- Production: India’s crude steel capacity reached 179.5 million tonnes in 2023-24. The production of finished steel, including alloy and non-alloy, has shown a consistent increase, with 139.15 million tonnes produced in 2023-24.
- The private sector dominates steel production, contributing about 83% of the total crude steel output.
- National Steel Policy 2017 aims to create a technologically advanced and globally competitive steel industry, targeting a production capacity of 300 million tonnes by 2030-31.
- Consumption of Steel: The total consumption of finished steel was around 75.6 million tonnes during April-October 2024.
- The per-capita consumption of steel stood at 86.7 kgs in FY23.
Green Steel Mission
- It is aimed at decarbonizing the steel sector and aligning it with India’s net-zero emission targets by 2070.
- Key Components
- Production-Linked Incentive (PLI) Scheme for Green Steel: It aims to encourage the production of green steel, and attract investments and boost the domestic manufacturing of specialty steel, reducing reliance on imports.
- Incentives for Renewable Energy: To promote the use of renewable energy in steel production, the mission includes various incentives.
- It aims to help in reducing the carbon footprint of the steel industry.
- Mandates for Government Agencies: Government agencies are now required to purchase green steel, which will drive demand and support the industry’s transition to more sustainable practices.
The Benefits of Decarbonizing the Steel Industry
- Positive impact on the global climate: The primary benefit of reducing steel sector emissions is the positive impact on the global climate.
- Lowering emissions from steel production can help limit global temperature rise, contributing to the achievement of climate targets under the Paris Agreement.
- Health and Environmental Protection: By adopting cleaner technologies, steel plants can reduce pollution levels, improving air and water quality.
- This will reduce the negative health impacts on local communities and prevent environmental degradation.
- The transition to green steel can create new jobs in renewable energy, technology development, and infrastructure
Related policies and initiatives taken for promoting decarbonisation in steel industry
- Task Forces: 14 task forces were created involving industry, academia, think tanks, and government bodies to recommend decarbonisation strategies for the steel sector.
- Steel Scrap Recycling Policy (2019)enhances the availability of domestically generated scrap, promotes a circular economy, and facilitates the establishment of metal scrapping centers for recycling ferrous scrap, including End-of-Life vehicles (ELVs).
- Vehicle Scrapping Policy (2021) Increases scrap availability for the steel sector by implementing the Motor Vehicles (Registration and Functions of Vehicles Scrapping Facility) Rules under the Motor Vehicles Act.
- National Solar Mission (2010) promotes solar energy usage, contributing to emission reductions in the steel industry.
- Perform, Achieve and Trade (PAT) Scheme Incentivize energy efficiency improvements in the steel industry.
- Integrating National Green Hydrogen Mission: Announced by the Ministry of New and Renewable Energy (MNRE) to support green hydrogen production, with the steel sector as a key stakeholder.
- The steel sector is integrated into the National Green Hydrogen Mission, which focuses on producing and using green hydrogen. It is crucial for decarbonizing steel production.
- Green Steel Taxonomy: India has introduced a taxonomy for green steel, defining and categorizing low-emission steel.
- It helps in creating a market for green steel and facilitates financial support for green initiatives.
- Carbon Credit Trading Scheme (CCTS) notified in June 2023 to reduce emissions across sectors, including steel, through a carbon credit certificate trading mechanism.
- The Ministry of Steel has launched several pilot projects under the Green Steel Mission.
- These projects focus on producing Direct Reduced Iron (DRI) using 100% hydrogen and reducing coal/coke consumption in existing blast furnaces.
Conclusion and Way Forward
- Reducing carbon emissions in the steel industry is an urgent need to combat climate change and ensure sustainable growth.
- By focusing on energy efficiency, renewable energy adoption, green hydrogen, and carbon capture technologies, the steel sector can significantly lower its carbon footprint.
- Collaboration between the government, industry players, and research organizations is essential to accelerate the transition toward a greener, more sustainable steel industry.
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