India’s steel sector is getting in the way of its climate action goals

Carbon guzzler.
Carbon guzzler.
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India’s heavy industry, particularly steel manufacturing, is the sore spot of its climate action plans.

The booming sector could bring about the demise of the country’s sustainable development plans if the government fails to decarbonise it within the next 30 years, scientists have warned. “Steel is one of the major consumers of coal after electricity, and if we don’t talk about it, this is going to be one of the biggest contributors to climate change and air pollution,” says Sunil Dahiya, an analyst at the independent Centre for Research on Energy and Clean Air (CREA).

In tune with India’s explosive development, the demand for steel in the country is predicted to grow five-fold in the next 30 years, adding 35% to the country’s total carbon dioxide emissions. In 2015, the iron and steel industry accounted for 6.2% of global emissions. If it was a country, it would be the fifth-largest emitter after China, the US, European Union, and India.

And yet, experts say efforts to reduce the sector’s carbon footprint are barely there, quashed by an inefficient production chain and powerful lobby interests. ”India is doing incredibly well when it comes to reducing emissions from electricity, and we think there is a clear pathway for the transport sector as well,” says Will Hall, an author of a recent report on the steel sector by Delhi-based The Energy and Resources Institute (TERI). “But there hasn’t been much of a debate so far about the heavy industry.”

Missing modest targets

While India doesn’t have a specific goal in terms of emissions reduction, its pledge under the Paris Agreement mentions a reduction of emission intensity—the amount of carbon dioxide released relative to GDP—by around 35% between 2005 and 2030.

India justifies this modest target citing the need to lift millions of its citizens out of poverty, providing them with energy, food security, and healthcare, all of which produce carbon. However, even the low target could be out of reach if its steel industry remains as inefficient and energy intensive as it is today.

Steelmaking requires a lot of coal, mostly imported from Australia and Indonesia, among other nations. As demand for steel rises, coking coal consumption could grow from 60 million tonnes (MT) to 218 MT per year, increasing carbon emissions from 242 MT to about 837 MT by 2050, according to the TERI study.

India’s large steel players, though, are making efforts.

Tata Steel, for instance, devised a new system known as the HIsarna process, currently trialled at its plants in Europe. It streamlines conventional steelmaking processes and cuts emissions by 20%. TERI’s researchers add that if the carbon dioxide released in the process was to be captured through carbon capture and storage, emission reduction would reach 80%.

Inefficient small units

While some of the biggest steel plants are relatively advanced, Hall explains that India is peppered with small, inefficient steel making units that often run on domestic coal, which don’t produce as much heat as the imported variety.

Reducing the impacts of these plants is possible, Hall says, but it’s not going to be easy.

Steel plants need to become more efficient. For example, just by replacing coal with hydrogen produced from clean electricity, total emissions from steelmaking would go down by 94%.

When it comes to hydrogen, Dahiya says, “it totally depends on how the government pursues research and development—whether it starts collaborating with international partners right now or wait for 10-20 years and delay the transition to clean energy.”

Sujeet Samaddar, a former senior consultant with the government think tank NITI Aayog, says that India already has the right regulations to curb pollution from heavy industries. One such measure is the recent policy rolled out by the government to reuse scrap steel, which according to TERI is 85% less emissions-intensive than primary steel.

“As a layman,” Samaddar says, “I believe we should stop mining any resource from earth,” like other countries such as Germany are planning to do in the medium term. But he concedes this will require a slow transition from industrial processes that are currently mainstream, retiring inefficient plants, and focusing on recycling to plug the resource gap.

Ultimately, “even if carbon emissions weren’t your goal, it’s something you’d want to do anyway,” Hall says. Maximum use of domestic scrap and more efficient energy use would make India self reliant. “Wastage of energy means importing more coal, which is costing you a lot,” he adds.