India’s tech path is key to global steel decarbonization – pv magazine India

The global steel industry is on the verge of switching from coal to hydrogen. With enough high-quality iron ore and low prices for hydrogen, India could play a pivotal role in the global decarbonization of steel given its large and growing economy.

Recent announcements by global steel companies in India underscore how important the country’s steel technology path will be in achieving the global decarbonization of the steel sector.

ArcelorMittal Nippon Steel India (AM/NS) – a joint venture of two of the world’s largest steel producers, Europe-based ArcelorMittal and Japan-based Nippon Steel – has announced a US$13 billion investment in a US$24 million steel plant tonnes per annum (mtpa) in Odisha and an additional investment of US$22 billion in Gujarat. Meanwhile, South Korean steel giant POSCO is planning a $5 billion investment with Indian conglomerate Adani to build an integrated steel plant in Gujarat.

The ads have, to varying degrees, promised the use of “green” steel technology without providing any specifics.

The world’s largest steel producer, China, may have already peaked, and therefore steel-related carbon emissions are likely to decline. While China produced 1 billion tonnes of crude steel in 2021, down 3% year-on-year, India, the world’s second largest steel producer, produced 118.1 Mt of crude steel, a increase of 17.8% compared to 2020.

In 2020, 56% of India’s steel production was produced via electric furnaces, of which less than half was attributed to electric arc furnaces and the rest was produced on induction furnaces. These furnaces are mainly fed with direct reduced cast iron (DRI). India has a high share of DRI based steel production using gasified thermal coal which produces more emissions than natural gas based DRI. The balance of 44% was produced by blast furnace, from coking coal. India’s growing demand for steel has led to significant investment in new blast furnace capacity in recent years.

Thus, the Indian steel sector is the largest contributor to industrial energy demand, with a strong dependence on coal (85% of energy inputs).

Currently, the Indian steel industry accounts for nearly 23% of total energy input and 30% of industrial carbon dioxide (CO2) emissions from the industrial sector.

The main reasons for the higher energy intensity of the Indian steel sector compared to the world average are its high dependence on coal, the lower share of scrap recycling, a fragmented and underperforming casting sector and the number of old blast furnaces.

The International Energy Agency (IEA) in its Stated Policy Scenario (STEPS) has predicted that steel production in India will double by 2030 and quadruple by 2050. Coal demand is also expected to increase by 250%.

Reducing CO2 emissions and meeting a growing demand for steel seems to be a dilemma for political and industrial decision makers.

Tata Steel, JSW, Steel Authority of India, Jindal and AM/NS are some of the biggest producers in India.

AM/NS’s new announcements represent a significant increase in its Indian steelmaking capacity and will supposedly use green steelmaking technology at the Odisha plant. The US$22 billion to be invested in Gujarat involves a range of projects, including 10 gigawatts (GW) of solar and wind development for the decarbonization of steel production.

POSCO’s move will be its first new steel investment in India after four failed attempts over the past 17 years.

The lack of steel technology details in these announcements contrasts with those made in developed countries whenever companies want to highlight their transition to low carbon steel.

ArcelorMittal has announced that it is building a new DRI-EAF at its Spanish plant that could reduce carbon emissions by 50%. In another agreement with the Government of Canada, ArcelorMittal will install DRI-EAF technology to phase out the current blast furnace and reduce emissions by 60%.

POSCO’s memorandum of understanding with Adani is part of its plan to establish “green” steel capacity outside of South Korea.

Investing in any new coal-based steel technology in the 2020s will lock in carbon emissions for decades. Steel production assets are durable and the average lifespan of a blast furnace can reach 50 years.

Investing in blast furnace technology in the 2020s means that new plants would operate even after 2070, the year set for India to reach net zero emissions.

India’s rapidly growing demand for steel indicates that it faces a major challenge in decarbonizing its coal-dependent steel industry. However, by using low-cost renewable electricity, India could have the opportunity to produce cost-competitive green hydrogen for use in the iron-making process.

DRI can be produced using zero-emission green hydrogen rather than gas or coal. The current drawback is its cost.

The huge planned pivot of Mukesh Ambani’s Reliance Industries Ltd towards new energy technologies has the potential to enable an era of cheap green hydrogen in India. Its planned US$75 billion investment in renewables and electrolyzers will help drive down the cost of green hydrogen – the company is targeting US$1/kg backed by 100 GW of renewable energy, both before the end of this decade.

Reliance’s green hydrogen ambition is now being followed by others, including Adani.

The global steel industry is on the verge of switching from coal to hydrogen. With enough high-quality iron ore and low prices for hydrogen, India could play a pivotal role in the global decarbonization of steel given its large and growing economy.

We await details on the technology to be used by AM/NS and POSCO/Adani – global decarbonization of steel will be difficult if low carbon steel capacity is built in developed countries while the technology Most carbon-intensive older ones are built in developing countries where much of the growth in steel demand can be expected.

Soroush Basirat is an energy finance analyst for the steel sector at IEEFA. He has extensive experience in business development and investment in the steel industry. Simon Nicholas is an Energy Finance Analyst at IEEFA. He is a Fellow of the Institute of Chartered Accountants of England and Wales.

The views and opinions expressed in this article are those of the author and do not necessarily reflect those of photo magazine.

This content is copyrighted and may not be reused. If you wish to cooperate with us and wish to reuse some of our content, please contact: [email protected].

Previous Qatar and UNESCO celebrate 50 years of longstanding partnership – India Education | Latest Education News | World Education News
Next Edtech startup ForeignAdmits to hire 100 employees – India Education | Latest Education News | World Education News