India to launch ₹5,000cr mission to help steelmakers go green
What's the story
The Indian government is planning a ₹5,000 crore mission to help steelmakers adopt clean technologies, according to a report in The Economic Times. The scheme will mainly focus on secondary producers and push the demand and procurement of green steel. It will offer concessional loans, risk guarantees, and other financial tools to support both large and small steelmakers in producing sustainable or 'green' steel.
Target audience
Focus on secondary producers
The primary focus of the mission will be on secondary steel producers, who account for nearly half of India's output. However, primary producers using blast furnaces will also be eligible for the scheme. The government's move comes as part of its broader strategy to decarbonize the steel industry by promoting better raw materials, alternative fuels, and renewable energy in production processes.
Emission goals
Steel ministry's emission reduction targets
Under the National Steel Policy 2017, India has already set a target to cut emissions to 2.6-2.7 tons of carbon dioxide per ton of crude steel through electric arc furnace technology by 2030. However, the Steel Ministry noted that while about 50-60% of primary producers have adopted modern technology, secondary producers are lagging at under 50%.
Future plans
Green steel mission in the works
Along with this scheme, the Steel Ministry is also working on a larger Green Steel Mission. This could include a production-linked incentive (PLI) scheme for green steel, incentives for renewable energy use, and rules mandating government bodies to procure sustainable steel. A study by EY-Parthenon with WWF-India and CII-GBC predicts that demand for green steel in India will grow sharply from negligible levels today to 4.49 million tons (MT) by 2030.
Demand forecast
Anticipated rise in green steel demand
The report estimates that demand will further rise to 24.89 MT by 2035, double again to 73.44 MT by 2040, and peak at 179.17 MT by 2050. Construction is expected to remain the largest driver of this demand, followed by the infrastructure and auto manufacturing sectors. To boost adoption, the government is mulling making at least 25% of public steel procurement from green sources mandatory.