Will hydrogen for steel be an eyewash for India?

Newsletter - February 5, 2020

Fuelling the fire: India’s steel industry has relied almost exclusively on coking coal for the ‘reduction’ of iron ore so a switch to hydrogen won’t be easy. Source: en:former

Big Story: Will hydrogen for steel be an eyewash for India?

A new report on India’s steel industry warns that the sector’s CO2 emissions could quadruple by 2050 to 837 million tonnes. Steel consumption is a key indicator of economic growth, but so far the sector has relied almost exclusively on coking coal for the “reduction” of iron ore. The process releases vast quantities of CO2. Economic growth is good, but in times like these there isn’t any room for increased emissions. 

However, the report was released by The Energy and Resources Institute (TERI) and offered a number of solutions. The combination of energy and resource efficiency alone would reduce emissions by 45%, it says, and it recommends imposing penalties on the sector by 2030 to clean up its act.

However, unless the process of manufacturing steel itself is carbon-free, the sector will continue polluting. Adopting low-carbon technologies and setting standards for low-carbon steel are welcome, but today we’re at a point where the country’s major industries need to fully de-carbonise.

Here’s where the yet another solution of switching to Hydrogen comes in. Using hydrogen instead of coal eliminates the release of CO2, as the process merely produces water as the by-product. A detailed explainer can be found here.

The question is, where will India source hydrogen from? 

Splitting water through electrolysis is one route. Powering the process through renewables alone does make for “green steel”. But given India’s plans to become the world’s fastest energy consumer by 2030 — which would involve greater oil and gas consumption — the most likely candidate would be natural gas (which is largely methane).

The country is already expanding its gas grid far and wide, so the opportunity to lower industrial emissions would be a healthy addition to the fuel’s reputation. Several new oil fields are being opened as well, making the case for gas even stronger. 

Also, Bloomberg New Energy Finance reported last year that to be competitive with hydrogen from natural gas, renewables-powered electrolysis would have to produce hydrogen at about USD 60 cents a kilogram. Right now the cost is somewhere between USD2.5-6/kg.  

That’s not the real challenge for now though. The predicament is that natural gas could be much worse when it comes to curbing emissions than is reported. It burns magnitudes cleaner than coal, but massive amounts of methane escape to the atmosphere in “fugitive emissions” during extraction. The US, for example, loses nearly 2.3% of its annual gas output to these leaks. And the exact figure varies by source, but methane is generally considered to be 80-86 times more potent as a greenhouse gas than CO2 over 20 years. Despite best efforts, distillation columns, storage capacities and pipelines aren’t leak proof, so the share of methane lost to leakages could only go up. 

Therefore, what may seem like a promising solution will only be as good as the source of the fuel. It has already found strong backing across Europe. Prominent players, like ThyssenKrupp, ArcelorMittal and Gazprom are already experimenting with ‘green hydrogen’, and German chancellor Angela Merkel has declared the fuel as pivotal to “rebuilding Germany’s industrial base” through to 2050. 

Yet in India, the inertia of investing in fossil fuels could prove much harder to shake off, and renewables just aren’t coming online fast enough. So if our version of “green steel” is ultimately fueled by natural gas, it would risk turning a much-touted transition into more of an eyewash. Unless of course, the industry itself decides to innovate and opt for renewables-powered electrolysis. It’s not beyond their capabilities, and even presents an enormous opportunity for self-regulation.

Climate Science

Swarmed: The locust outbreak in East Africa is the worst the region has seen in the past 25 years. Source: Time

Locust outbreak threatening food security in East Africa; Somalia declares national emergency

The Horn of Africa (eastern region of the continent) is battling a serious locust outbreak, the worst the region has seen in the past 25 years. Somalia has declared a national emergency. The outbreak, described by the UN Food and Agriculture Organisation (FAO) as ‘extremely alarming’, threatens livelihoods and food security in a region that has already been grappling with the effects of floods, landslides, droughts and cyclones brought on by climate change. The UN has warned this outbreak will continue to develop in lands as far as India, which has already been dealing with the problem since last year, especially in Rajasthan.

The region has been hit with unprecedented heavy rain since October 2019, which, scientists believe has fuelled the swarm. The extreme weather is a result of an ocean circulation pattern known as the Indian Ocean Dipole (IOD), which affects climatic conditions stretching from Africa to Australia. It is described as “an irregular oscillation of sea surface temperatures in which the western Indian Ocean becomes alternately warmer (positive phase) and then colder (negative phase) than the eastern part of the ocean”. In 2019, the positive phase of the IOD was the strongest ever in the past six decades, leading to the extreme weather in Africa as well as the bushfires in Australia.

Rapid weather changes increases risk of flu: Study

Rapid weather changes because of climate change is likely to increase the risk of flu, especially in highly populated areas, a new study published in the journal Environment Research Letters found. It was previously believed that low temperature, especially in the winter months, coupled with humidity, create an environment conducive to the flu. But the 2017-18 flu season was the warmest on record and also the deadliest. Scientists found that extreme weather fluctuations in the autumn months kick-started the flu epidemic, which then snowballed into the denser areas such as big cities.

According to the study, these weather fluctuations in the autumn months will continue to increase in a warming climate, pushing up the risk of the influenza epidemic by 20%-50% in highly populated regions, such as Europe later in the 21st century.

Study finds direct link between Arctic warming and tropical weather patterns

The effects of rapidly melting Arctic sea ice are being felt as far away as the tropics, a new study published in the Proceedings of the National Academy of Sciences found. The study recognised a pattern that linked the decline in sea ice since the 1990s with increasing warm cycles in the Central Pacific Ocean. Why this is significant is that the warming ocean then goes on to affect drought, flood and hurricane patterns across the world.

According to the study, the Arctic Ocean has warmed up to such a degree in the past two decades that sea-surface air has been rising into the stratosphere to form ‘convective towers’. This air, when it falls back into the equatorial Pacific, intensifies east-west trade winds that push warm water towards Asia and Oceana, which in turn creates the Central Pacific El Niño, a key driver of weather patterns across the world.

Climate Policy

Talking in circles: Finance minister Nirmala Sitharaman’s budget skimmed over a serious threat to India – climate change. Source: The Hindu

India’s budget 2020-2021 won’t help country fight climate change

Much like the 2019-2020 budget, which the Indian prime minister had hailed as a ‘green budget’ even though allocations didn’t reflect this at all, this year, too, there was nothing remarkable about finance minister Nirmala Sitharaman’s announcements — except for maybe the fact that the words ‘climate change’ had been mentioned for the first time since the 2014-2015 budget speech.

One of the highlights in an almost three-hour speech is the Rs4,400 crore that Sitharaman announced has been allocated to give incentives to large cities with a population of more than a million to come up with plans to clean up their air. What the parameters for these incentives will be are yet to be announced by the Ministry of Environment, Forests and Climate Change (MOEFCC). There is another anomaly in this Rs4,400 crore announcement – how the minister reached this figure remains a mystery because this amount has not been reflected in the budget as yet, a top official from the environment ministry revealed. However, this allocation is expected to fund the National Clean Air Programme (NCAP) that has a target to reduce air pollution levels by 20-30% by 2024 from 2017 levels. The National Adaptation Fund was also allocated a paltry Rs80 crore, which is a fraction of what the country actually spends on adapting to climate change.   

Among other notable announcements was that the government has ‘suggested’ that old thermal power plants that don’t meet current emissions norms be asked to shut down. This, Sitharaman said, will help India achieve its Paris Agreement target, the implementation of which begins on January 1, 2021. In reality, however, this target will be tough to achieve. Largely because these old power plants (before 1990) generate 34GW of electricity. A submission by the MOEFCC to the Supreme Court revealed that only 4.7GW of the 34GW had been retired by March 2018, and of the 4GW that was to be retired by March 2019, only 1GW was shut down. There is still no concrete plan on how the remaining power capacity will be shut down.

India’s schizophrenic approach towards achieving cleaner power will continue this fiscal year as well. Sitharaman announced the expansion of the PM-KUSUM scheme that aims to help an additional 2 million farmers to set up solar pumps. Although solar power developers were caught unawares by the basic Customs duty of 20% on solar cells and modules – the government’s attempt to boost local manufacturing.

There wasn’t much for farmers in the budget. While the budget for agriculture insurance schemes was increased to Rs15,695 crore from Rs13,640 crore, the budget for Rainfed Area Development and Climate Change was reduced to Rs202 crore from Rs250 crore, which is a significant drop of 20% . 

Also, under the new corporate tax regime, new power generation plants will have to pay only 15% tax. The government hopes this will help in the setting up of new companies to meet India’s growing energy demands.  

We adhere to environmental, sustainable standards, but there could be lapses: Coal India

Miner Coal India Ltd (CIL) claimed that its coal-producing subsidiaries adhere to environmental and sustainable standards, but did admit that there could be ‘stray cases’ of lapses. This response follows a report by the Comptroller and Auditor General (CAG), which said that six of the seven subsidiaries of CIL have not formulated environmental policies made compulsory by the Ministry of Environment, Forest and Climate Change.   

Ujjwala scheme failed to promote use of LPG: Study

While India’s Ujjwala scheme provided access to Liquefied Petroleum Gas (LPG) for cooking to the poor, it has failed to get such households to shift away from polluting fuels such as firewood, a study revealed. In order to achieve a complete transition to clean cooking fuel, additional incentives are required, the study stated.

Venue for UN biodiversity meet shifted from China to Italy

The UN biodiversity talks, to be held from February 24-29, will now be held in Rome, Italy, after the deadly coronavirus forced organisers to shift the venue from Kunming, in Yunnan province, China.

UK sacks Claire O’Neill as COP 26 president

The UK government announced this fortnight that Claire O’Neill will no longer be UK COP 26 president. The presidential post will now be held by a minister as part of a reshuffle in the UK cabinet. O’Neill later tweeted to suggest the UK government “can’t cope” with an independent COP team, which wasn’t led by a minister.

Air Pollution

Left out: India's clean air plan overlooks 231 polluted cities, according to a recent study. Source: Business Today

National Clean Air Programme leaves out 231 cities with toxic air: Study

The massive hike in the clear air plan budget may come as a relief, but the latest report on  National Clean Air Programme (NCAP) says it leaves out at least 231 cities with air as polluted as the 102 cities notified under the plan. The Greenpeace study profiled 287 cities, with over 52 days of data from 745 air pollution monitoring stations. In over 80% cases, PM (Particulate Matter) exceeded 60 microgram per cubic metre (μg/m3) prescribed under National Ambient Air Quality Standards (NAAQS) by the Central Pollution Control Board (CPCB). The report concluded that all these cities belong to the non-attainment list, but have not been added. The National Green Tribunal (NGT), too, had asked the CPCB to expand its list of such cities last year.

“Polluting activities continue”: Green court slams Malegaon administration

India’s green court, The National Green Tribunal (NGT), said the Malegaon administration has failed to shut down polluting industries and sought a status report on the issue. NGT ordered the commissioner of Malegaon Municipal Corporation, District Magistrate, Superintendent of Police, the member secretary of State pollution control board, and the managing director of Maharashtra State Electricity Distribution Company Ltd to appear in person on February 24. According to a panel report, plastic pipe manufacturing industries continue to burn plastic pellets in residential areas: 185 of 190 units having facilities for plastic-related activities and 70 out of 125 sizing units are located in residential areas.

Top 2 most polluted cities from Jharkhand, 6 of the top 10 most polluted cities from UP

According to Greenpeace report Jharia, the coal-belching city of the state of Jharkhand was the most polluted city in India, followed by the city of Dhanbad in the same state. The report based on analysis of PM10 data from 287 cities across the country. Six of the top-10 polluted cities are in Uttar Pradesh including the cities of Noida, Ghaziabad, Bareilly, Allahabad, Moradabad and Firozabad. Delhi’s air has improved slightly as the city moved to 10th position, from last year’s position of 8th most polluted city of the country. 

How serious should a penalty be on coal plants that missed Dec 2019 deadline?

Indian regulators are assessing how severely they should punish the operators of coal plants that have missed the December 2019 deadline to retrofit their plants with equipment to reduce emissions. Authorities had granted some plants December 2019 deadline, while for some others the deadline was extended to 2022. Most of the coal plants missed the deadline. Around New Delhi, only one out of the 11 plants had installed equipment to cut suffer oxide emissions, the Central Electricity Authority (CEA) said.


Strong push: India allocated Rs22,000 crore (~$3.08 billion) for the power and renewable sector in the budget, raising the funds to the renewable energy ministry by 48% for 2020/21. Source: Renewables Now

India allocates Rs22,000 crore for power and renewables in budget 2020-21

India allocated Rs 22,000 crore  (~$3.08 billion) for the power and renewable sector, raising the funds to the renewable energy ministry by 10.62% for 2020/21. The budget also laid emphasis on expanding the solar sector, including installing solar panels along railway tracks and expanding solar pumps scheme for farmers. Centre also extended lower tax rates to utilities, which some experts say should mostly help boost renewable energy. The government has also urged state governments to implement smart meters in three years, which would give consumers the right to choose suppliers and the rate.

India’s plan to set up solar panels on railway lands clash with its afforestation plans?

To boost solar power generation, India has decided to set up solar panels along rail tracks and on barren land to achieve its renewable energy capacity target of 175 gigawatts by 2022. Its renewable capacity rose 16% to 85.9 GW in 2019, while coal-fired capacity rose 3.9% to 198.5 GW, Reuters reported. But the railway lands are also what the environment ministry is eyeing to use for plantations to meet its climate commitments. Government’s own report Strategy for Increasing Green Cover Outside Recorded Forest Areas, released by the MoEFCC in 2018, talks about the importance of railway and fallow lands for undertaking plantations to keep India’s commitments.

A pilot project of installing solar panels along railway tracks was successfully completed in Bina in Madhya Pradesh. It was the first time a solar plant was set up jointly by Railways and BHEL. Power drawn from this will be used to run trains, ET reported.

Centre imposes 20% duty on solar imports

In a boost to domestic solar manufacturers India will raise tariffs on imports of solar cells and modules in the budget, to protect local manufacturing of such equipment and discouraging low-quality Chinese imports. A basic customs duty (BCD) of 20% on cells and modules will come into effect soon. Such equipment earlier did not attract any BCD. The government in 2018 imposed a safeguard duty on solar cells and modules imported from China and Malaysia. This duty is supposed to end in July.

Budget 2020: Solar power’s allocation rises by 10%

The Union Budget outlay for the solar sector for 2020-21 is Rs 2,516 crore, including both grid-interactive and off-grid projects. It is a 10.35% increase over Rs2,280 crore provided in the Revised Estimate for 2019-20. The allocation for grid-interactive solar power projects at Rs2,150 crore accounts for 50.57% of the total budgetary allocation of Rs4,350 crore for grid-connected renewable energy projects. The outlay for the wind energy projects for the current financial year stands at Rs1,303 crore. The last budget the outlay was ₹9.20 billion ($130 million) for wind power, ₹30.05 billion ($440 million) for solar (both grid-connected and off-grid).

India to expand solar pumps scheme 

In a move to double farmer income by 2022, and boost solar energy installations, India will expand the Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan (KUSUM) to provide 2 million additional farmers with standalone solar pumps. Surplus electricity generated by farmers will be bought by discoms to help boost India’s emerging green economy. About 1.5 million farmers will get help to shift to solar power pumps from grid-connected pump sets, LiveMint reported. India plans to double the capacity of the solar panels, which would help farmers sell at least 50% of the electricity generated. By earlier estimates, the scheme was to involve an expenditure of about Rs1.4 trillion. Finance minister Nirmala Sitharaman said farmers will be helped to set up solar power generation units on the lands they own and sell surplus power to the solar grid “to make a living out of even barren land.”

3 solar developers cancel contracts over delay in clearances

Adding to a sectoral slowdown, three major solar power plant developers faced cancellation of contracts with state-run NTPC over delays in regulatory approvals, potentially disrupting 1,400MW worth renewable energy capacity.

The contracts were signed in what was the first interstate transmission system (ISTS)-connected solar auction conducted by NTPC, India’s largest power generation utility, for building power plants and supplying 2,000MW in August 2018. While Acme Solar Holdings, Shapoorji Pallonji Infrastructure Capital Co. Ltd and New York Stock Exchange-listed Azure Power Global Ltd bid ₹2.59 per kilo-watt hour (kWh) to build plants of 600MW, 500MW and 300MW each, respectively, SoftBank-owned SB Energy bid ₹2.60 per kWh to develop 600MW solar contract.

Indonesia to replace old coal power plants with renewable energy plants

Indonesia has decided to replace coal fired plants aged 20 years and older with plants using renewable energy. The government is expected to replace up to 69 units of coal-fired power plants and coal gas-fired power plants, with a combined power capacity of over 11GW of electricity. Indonesia uses coal to generate 60% of its electricity needs, it is a major coal exporter. Now the country is aiming to double the contribution of renewables, which include solar power, geothermal and hydropower, among others.

Electric Vehicles

On the right track: India has pushed back the date to electrify its rail network from 2022 to 2024. Source: Business Today

Indian trains to go 100% electric by 2024, but Customs duties raised for EVs

All of the Indian Railways network will run on electricity by 2024, according to the government’s latest announcement, and will be run on clean energy by 2030. The previous plan was to electrify the full network by 2022, but has since been pushed back. However, 700 – 1,000 diesel engines may still ply along border areas. 

On the other hand, though, the Centre has jacked up customs duties on imported EVs by 15%, to 40%. This may be a measure to ask foreign EV makers, such as Tesla, to set up shop in India, but for now it creates a higher barrier for any customer willing to import a high-end EV. 

Germany working on “green kerosene” to power clean aviation 

A team of german scientists is working to perfect the process of manufacturing “green kerosene” — which is derived from water and works with CO2 (or carbon) pulled from the air. The fuel was first experimented with during Nazi Germany times, and needs to be powered by renewable energy to be carbon-neutral, as during combustion it releases carbon. The nation’s flag carrier, Lufthansa, says it expects clean burning fuels to power up to 5% of its flights by the next five years.   

UK commits to zero emissions aviation by 2050

The UK’s aviation sector has declared that its emissions will be reduced to zero by 2050. The country’s Sustainable Aviation Coalition has released its ‘Decarbonisation Road-Map: A Path to Net Zero’, in which it outlines measures such as the use of sustainable fuels, new propulsion technology and the smarter use of UK’s airspace to scale emissions down to zero — while also growing its passenger numbers by 70% at the same time. 
A key step towards the target are also the efforts being invested by EasyJet’s partner Wright Electric, which is developing electrical systems and a motor capable of enabling the airline to fly short distances with full capacity (up to 186 passengers). The goal will be to eventually have electric planes fly regional routes as long as 500km.

Fossil Fuels

Sinking ship? Very low sulphur fuel oil, mandated for ships by the IMO, is causing a spike in black carbon emissions, which would likely make Arctic ice melt even faster. Source: Wall Street Journal

New shipping fuels causing surge in black carbon emissions

Studies have found that very low sulphur fuel oil (VLSFO), mandated for ships by the IMO on January 1st this year, is causing a spike in black carbon emissions due to VLSFO’s higher aromatic compound content.  Black carbon is particularly harmful as even though it’s short-lived, it traps 3,200 times more atmospheric heat than CO2. 

In fact, the 10-85% rise in black carbon emissions would likely cause Arctic ice to melt away even faster as it lessens their capacity to reflect sunlight and heat. Global fuel suppliers are now being questioned on why the findings were not taken note of when finalising the guidelines for low-sulphur fuel blends. 

Oslo court approves new licences for Arctic oil exploration 

A court in Oslo, Norway, has approved licences for oil and gas exploration in the Arctic — off the Norwegian coast — despite climate campaigners and even its own citizens vehemently opposing any such allowances to Big Oil. The court overruled a lower court’s decision to consider that fuels extracted from Norwegian territory but burnt elsewhere must be considered as causing harm to climate action. 

Instead, it ruled that lawful deals signed by the government with drillers weren’t necessarily for the courts to review, and the resulting emissions could be compensated for by carbon markets. 

India to start buying Russian oil over Middle East problems  
Three of India’s top state refiners are reportedly close to signing their first annual deals with Russia to buy its crude oil. IOC, HPCL and BPCL will each sign contracts for the fuel, even though it would cost more, to hedge against supply shortages from the Middle East. IOC is considering purchasing as many as 40,000 barrels per day (bpd) from Russia, as India’s key supplier, Iran, is battling US sanctions that prohibit it from selling oil.