Setting actionable pathways to catalyze green steel manufacturing in India

In its journey of achieving net-zero by 2070, India has set an ambitious and actionable roadmap – including the goal of reducing total projected carbon emissions by one million tons through 2030, and cutting carbon intensity of the economy by less than 45 per cent. 

As the nation embraces ‘panchamitra’ or the five-fold strategy towards decarbonization, evaluating the role of heavy industries that are crucial in driving economic progress while also being large-scale emitters of greenhouse gases becomes a strategic priority.

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

Recently, NITI Aayog also projected India to become global hub for green steel manufacturing with a capacity of 15-20 million tonnes by 2030, paving a way to make green steel mainstream for the world. 

Increasing production, cutting intensity 

As the world’s second largest producer of crude steel, India plans to more than double production targets to 300 million tons by 2030 and nearly fivefold to 500 million tons by 2047 from 120 million tons as of March 2022, 18 per cent higher than in 2021. 

Today, with coking coal – 85 per cent of which is imported – serving as one of the two key raw materials in steel production, the sector contributes to roughly 9 per cent of the country’s total greenhouse gas emissions in addition to accounting for one-fifth of the industry energy consumption, according to IEA’s Iron and Steel Technology Road Map. With over 977 steel plants, the country has outlined its plans to cut carbon dioxide emissions intensity – having already achieved a reduction from 3.1 Tonne/tonne of crude steel (T/tcs) in 2005 to around 2.6 T/tcs by 2020 – and aims to reduce it further to about 2.4 T/tcs by 2030. 

The pivot to green steel manufacturing

It would be interesting to dive deeper to evaluate the technology available today for manufacturing green steel. Typically, steel is produced either using 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 new possibilities to pivot to green steel manufacturing, with advanced technologies helping cut emissions. 

DRI or Sponge Iron, which is less capital intensive and offers an alternative steel production route to BF/BOF or  scrap EAF, has been growing at scale. However, it also acts as a barrier to fulfill energy efficiency investments. On the other hand, using natural gas as a reductant is gaining ground in several markets which benefit from an abundant supply of natural gas. This not only reduces the need for coking coal but also cuts associated emissions, such as sulphur oxides and carbon dioxide, with a recent study estimating that natural gas-based DRI had 33 to 41 per cent lower greenhouse gas footprint than coal-based DRI. 

Exploring new pathways for ‘green steel’ manufacturing

One pathway to promote green steel manufacturing is the use of advanced gas turbine generator (GTG) technology that can lead to about 10-15% increase in efficiency. Today, GTGs are being increasingly deployed by global steel majors to achieve as much as 70 per cent reduction in emissions. Indian steel plants with BFG (Blast Furnace Gas) production can repurpose and utilize the existing idle gas assets in the country, underlining their commitment to Scope 3 emissions. 

Another strategic approach is to embrace the use of renewable power, including green hydrogen, which replaces fossil fuels both in the manufacture of iron pellets and also for carbon-purification. With India’s focus on tapping renewable sources of energy, the steel industry can not only cut fossil fuel use but also achieve lower carbon dioxide emissions. It is estimated that green hydrogen can help achieve a reduction of 15 to 20 per cent of the energy consumed by blast furnaces. 

A third and equally significant step is to encourage blending green hydrogen with grey hydrogen – derived from natural gas — which will help bring down overhead costs significantly as well as emissions. A significant shift will come as larger electrolysis facilities come on board, which will help reduce the price of green hydrogen by up to 60 to 80 percent. 

Such innovative processes that leverage the advantage of renewable and cleaner energy sources, and effectively integrate them into production processes will empower India’s steel manufacturers to deliver on their commitment to go green. 

A four-fold advantage 

The advantages of green steel manufacturing are fourfold: One, reduced dependence on coal imports, a growing concern that is compounded with the increase in coking coal prices; two, supporting national goals to move towards hydrogen and clean energy; three, highlighting their environment, social and governance principles by taking into consideration even Scope 3 emissions. 

And, finally, it will add to our national advantage by providing Indian steel manufacturers the opportunity to expand to global markets and share their knowhow.  

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

END OF ARTICLE