India has recently defined green steel and announced initiatives to promote its use. This comes amid rising global regulations aimed at reducing carbon emissions. The European Union’s Carbon Border Adjustment Mechanism (CBAM) imposes costs on high-emission steel, prompting India to act. The government aims for 37% of its steel procurement to be low-carbon by 2024.
What Is Green Steel?
Green steel refers to steel produced with emissions lower than 2.2 tonnes of carbon dioxide (CO2) per tonne of finished steel. India’s average emission intensity in 2024 was 2.54 tonnes of CO2 per tonne, while the global average stood at 1.91 tonnes. The definition aligns with global efforts to reduce carbon footprints in the steel industry.
Emission Reduction Strategies
The steel industry is considered a ‘hard-to-abate’ sector due to its production methods. To reduce emissions, alternative inputs like green hydrogen are being explored. Traditionally, steelmaking relies on coke, a carbon-rich substance derived from coal. By replacing coke with green hydrogen, CO2 emissions can be lowered during the steel production process.
Star Rating System for Green Steel
To help consumers identify green steel, the Government of India has introduced a star rating system. This system classifies steel products based on their emission levels: – Five-star – Emission intensity lower than 1.6 t-CO2e/tfs – Four-star – Emission intensity between 1.6 and 2.0 t-CO2e/tfs – Three-star – Emission intensity between 2.0 and 2.2 t-CO2e/tfs Steel exceeding 2.2 t-CO2e/tfs is not eligible for a green rating. This initiative aims to increase transparency and promote environmentally friendly practices in steel production.
Global Emission Targets
Globally, there is no unified definition of green steel. However, the European Union has set ambitious targets for its steel industry. By 2030, the EU aims to reduce carbon emissions by 55% compared to 1990 levels and by 30% from 2018 levels. These targets highlight the international focus on sustainable steel production and the importance of reducing emissions.
Challenges in Transitioning to Green Steel
Transitioning to green steel poses several challenges. The high cost of green hydrogen production is barrier. Additionally, existing infrastructure and technology may not support the rapid shift required. The steel industry must invest in research and development to innovate and adopt new methods of production.
Government Support and Policy Framework
The Government of India is actively promoting policies to support the transition to green steel. This includes financial incentives and research grants for companies investing in low-carbon technologies. The government’s commitment to sustainable development is reflected in its initiatives to reduce emissions in the steel sector.
Industry Response and Adaptation
The steel industry is beginning to respond to these initiatives. Companies are exploring alternative materials and production methods. Collaboration between government and industry stakeholders is crucial for achieving the set targets. This approach will facilitate the transition to greener practices while maintaining economic viability.
Questions for UPSC –
- Estimate the impact of the European Union’s Carbon Border Adjustment Mechanism on global steel trade.
- Critically discuss the challenges faced by the steel industry in transitioning to low-carbon production methods.
- Examine the role of government policies in promoting sustainable practices in heavy industries.
- Analyse the significance of green hydrogen in reducing carbon emissions in steel production.
Answer Hints:
1. Estimate the impact of the European Union’s Carbon Border Adjustment Mechanism on global steel trade.
- CBAM imposes costs on high-emission steel, incentivizing producers to lower emissions.
- It creates a competitive disadvantage for countries with less stringent emission regulations.
- Global steel prices may fluctuate as producers adjust to new compliance costs.
- Non-EU countries may face barriers, affecting export volumes and trade relationships.
- Encourages innovation and investment in cleaner technologies globally.
2. Critically discuss the challenges faced by the steel industry in transitioning to low-carbon production methods.
- High costs associated with developing and implementing green technologies like hydrogen.
- Existing infrastructure primarily designed for traditional methods may hinder adaptation.
- Need for investment in research and development to innovate processes.
- Market volatility and competition may deter investments in low-carbon alternatives.
- Regulatory uncertainties can affect long-term planning and commitment to green initiatives.
3. Examine the role of government policies in promoting sustainable practices in heavy industries.
- Government policies can provide financial incentives for adopting low-carbon technologies.
- Regulations can set mandatory emission reduction targets, driving industry compliance.
- Support for research and development can encourage innovation in sustainable practices.
- Public awareness campaigns can encourage consumer preference for green products.
- Collaboration with industry stakeholders can align efforts towards sustainability goals.
4. Analyse the significance of green hydrogen in reducing carbon emissions in steel production.
- Green hydrogen serves as a cleaner alternative to coke in steelmaking processes.
- Using hydrogen can drastically lower CO2 emissions compared to traditional methods.
- It promotes the use of renewable energy sources, enhancing sustainability.
- Facilitates compliance with global emission regulations, improving market competitiveness.
- Investment in hydrogen technology can stimulate economic growth and job creation in green sectors.
