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Decarbonizing the Steel Industry Will Pay Rewards

Context

  • The current reliance on coking coal-based steel-making poses environmental issues and accounts for 11% of the nation’s emissions, but India’s steel industry is expected to undergo tremendous expansion, with crude steel production anticipated to reach 435 million tonnes by 2050.
  • In order to lessen this, a quicker switch to steel production using hydrogen combined with a carbon price of $50 per tonne can spur a move to more environmentally friendly steel production.This not only lowers emissions but also gives India the chance to develop a reputable, sustainable centre for the production of green steel, which might result in cost savings and a reduction in overall emissions by 2050.

Relevance:

GS Paper-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment

Mains Question

Explain the various actions that can be taken to facilitate the decarbonization of the steel industry in India. (150 Words)


Decarbonization.

  • Decarbonization is the process of reducing or eliminating carbon dioxide (CO2) and other greenhouse gas emissions from a variety of economic sectors, including energy, transportation, industry, and agriculture, with the aim of limiting global warming and mitigating climate change.
  • The decarbonization of India’s steel sector is crucial for long-term growth and cutting carbon emissions.

Importance:

  • India’s steel sector is currently responsible for 11% of the nation’s carbon emissions. In order to meet climate targets and lessen the negative effects of climate change, decarbonization is essential.
  • Sustainable development: By minimising its negative environmental effects and fostering cleaner production methods, decarbonizing the steel industry is consistent with sustainable development objectives.
  • International accords: India’s adherence to global climate agreements like the Paris Agreement requires a transition to low-carbon industries like steel production.
  • Economic opportunities: Establishing a greener steel industry can make India a hub for the production of green steel, luring investments, generating employment, and boosting economic competitiveness.

Challenges

  • Technological barriers: Low-carbon technologies are still being adopted, and there are issues with cost, scalability, and infrastructure development. One example is the production of steel using hydrogen.
  • Cost implications: The switch to decarbonized steel manufacturing may result in higher production costs, which might reduce the industry’s ability to compete and drive up the cost of homes and cars.
  • Resource accessibility: India’s reliance on coking coal for the production of steel presents difficulties in terms of accessibility, quality, and expanding global demand, particularly as the sector grows.

Several steps can be taken to facilitate the decarbonization of the Indian steel industry:

  • CO2 Pricing: Implementing CO2 pricing, such as carbon taxes or carbon trading systems, promotes investments in low-carbon technology and hastens the adoption of hydrogen-based steel production.
    • It gives steel producers incentives to cut emissions and switch to greener production techniques.
  • Material Efficiency: Policies that encourage scrap collecting and recycling are necessary to promote the production of steel from scrap, which produces fewer carbon emissions.
    • This includes establishing centres for collecting, processing, and disassembly in order to scale up domestic steel production using scrap.
    • This lessens the steel industry’s dependency on coking coal and promotes a circular economy.
  • Green Steel Consumption: o Promoting the usage of green steel in end-use industries like the automotive and construction sectors can increase demand for low-carbon steel.
    • Green steel usage is encouraged by setting targets for embodied carbon in public and private projects.
    • By establishing a home market for green steel, this helps domestic steel producers and increases their ability to compete.
  • Incremental Decarbonization Measures: o Energy-efficiency upgrades and process optimisations can be applied to existing steel assets to achieve considerable emission reductions.
    • Strategies for decarbonization include increasing the amount of scrap used in the BF-BOF process, obtaining green power, and putting in place methods for controlling the use of biomass.
  • Carbon Capture, Utilisation, and Storage (CCUS): o CCUS technology investments offer a significant lever for lowering emissions in the steel industry.
    • Research and development initiatives ought to concentrate on lowering capture costs and setting up CCUS hubs in steel-producing regions.
    • This makes it possible to capture and store carbon emissions, reducing their negative environmental effects.

Green Steel

  • In order to make “green steel,” or steel without the emission of carbon dioxide, hydrogen must be used as a “reducing agent” (a substance that removes oxygen).In other words, iron ore is essentially iron oxide, and steel is made by adding a small amount of carbon to pure iron after hydrogen is used to remove oxygen from iron oxide.Currently, coke is used to remove oxygen from the atmosphere; nevertheless, coke and oxygen combine to generate carbon dioxide, which is currently the greatest threat to humanity.
  • Coke may be replaced by hydrogen just as effectively.
  • Iron ore from India is largely unsuitable for the production of green steel.
  • India’s low-grade iron ore, along with that of Australia, makes up 66% of the world’s iron ore, according to the Commonwealth Industrial and Scientific Research Organisation (CSIRO) of Australia. Only in blast furnaces, which are enormous cooking pots where iron ore is melted and combined with coke before being poured into moulds to create steel slabs, can low-grade iron ore be converted into steel.
  • The ‘electric arc furnace’ method of producing green steel is necessary for technological reasons; EAFs require high-grade ores with an iron content of at least 60%.

Conclusion:

  • On the road to sustainability, India’s steel sector has both possibilities and difficulties.
  • Given the anticipated increase in steel production, it is imperative to reduce the industry’s high carbon emissions.
  • A more environmentally friendly steel industry may be possible with an expedited shift to hydrogen-based steel production, supported by the implementation of CO2 pricing and regulations for material efficiency.
  • Investing in carbon capture technologies and making incremental changes to energy efficiency are also essential.
  • The long-term advantages of these initiatives outweigh any potential increases in production costs and prices for homes and cars.
  • An expedited decarbonization scenario is a tempting option for India’s steel industry due to decreased cumulative emissions, forex savings, and the creation of a hub for the production of environmentally friendly steel on a global scale.
  • India can create a steel industry that not only satisfies expanding demand but also works towards a greener and more affluent future by embracing sustainable practises from the outset.

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