India’s iron and steel industry capable of emitting less and producing more: Report

A new report underlines the need for better planning, new technologies and adequate finance to help the iron and steel make the much-needed shift while doubling production

A new report found that it is possible to bring down carbon dioxide (CO₂) emissions from India’s iron and steel sector drastically by 2030, while more than doubling the country’s output of steel.

According to the report by the Centre for Science and Environment (CSE), this can be achieved by switching to a cleaner fuel, particularly to move towards gas-based direct reduced iron-electric arc furnace (DRI-EAF) production and to introduce hydrogen in blast furnace-basic oxygen furnace(BF-BOF); by implementing scrap-based production with a complete switch in DRI-EAF and 30% in BF-BOF; and by implementing Carbon capture, utilisation and storage (CCUS) in BF-BOF for reducing 30 % of the emissions.

As per National Steel Policy, 2017, India’s expected steel production capacity will be 300 million tonnes and India’s steel production will be 255 million tonnes by 2030. As the sector plans to double its production by 2030 with 60-65 % production based on coal-intensive technology,  cleaner pathways in this hard-to-abate sector are crucial. 

“The iron and steel industry is an emission-intensive sector. Our new analysis shows it is possible to bring down carbon dioxide (CO₂) emissions from our iron and steel sector drastically by 2030, while more than doubling India’s output of steel. We can emit even less than what we do today. But this will need planning, technology and adequate funds,” said Sunita Narain, director general, CSE.

Implementing fuel efficient tech and cleaner fuel

The report recommended introducing technologies for increased fuel efficiency and recovery. The Union Ministry of Steel has compiled a list of such technologies, but these need to be mandated. For instance, energy efficiency of rotary kilns in coal-based DRI units is hardly 37-55%  due to non-utilization of waste heat, therefore waste heat recovery systems should be made mandatory for coal-based DRI units. Similarly, induction furnaces in India should be restricted to prevent excess of poor quality steel or at the very least be required to install refining technologies like ladle refining furnace and gas oxygen refining. 

Significant reductions can be achieved by increasing the availability of cleaner fuel for combustion. GHG emissions from the iron and steel sector would go down from 659.19 million tonnes in the business-as-usual scenario to 478.27 million tonnes in 2030. In this case, the report said, the BF-BOF route would have to implement natural-gas based injection or use hydrogen as fuel and the DRI-EAF route would have to shift completely to gas-based production.

Increasing steel scrap and carbon capture

Every tonne of steel scrap used to produce steel saves 1.1 tonnes of iron ore, 630 kg of coking coal and 55 kg of limestone, estimated the report. It can reduce GHG emissions by close to 60%. Emissions reduction of 316 million tonnes compared to the business as usual scenario can be achieved through optimal scrap utilisation across the technology routes in the sector, the report added. 

Increasing the availability of good quality steel scrap will save energy and reduce carbon intensity. Therefore, the Steel Scrap Policy needs to ensure high scrap generation and utilisation targets.

Carbon capture, utilisation and storage (CCUS), particularly for the BF-BOF process in which substituting coal is difficult, must be used. Therefore, the report added, the option is to upscale the implementation of CCUS, which is being tried out by big players like Tata Steel (India) Ltd, JSW Steel and SAIL in their manufacturing plants. 

The report estimated that emissions reduction of 111 million tonnes from the  business-as-usual scenario can be achieved in the sector by implementing CCU in 30% of total production. In this case, emissions in the BF-BOF route would go down from 414.37 million tonnes in the  business-as-usual scenario to 290.06 million tonnes in 2030.

The industry should also examine the use of ultra-low carbon dioxide equivalent or CO2e steel-making technologies for their application and use in India, the report added. However, a switchover to new fuels and technologies would require finance.

“The bottom line is that it is possible to bend the CO₂ curve even for a sector like iron and steel. Countries like India can develop while drastically reducing their GHG emissions. The only question is if the rich world will accept the imperative of climate justice and provide the funds for the technology transformation necessary for a future-ready industry,” said Narain. 

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