In a landmark move, India has become the first nation to officially define “green steel,” marking a significant step towards sustainable industrial practices. The new standards, announced by the Ministry of Steel, specify that steel must emit less than 2.2 tonnes of carbon dioxide per tonne of finished product to qualify as green. Additionally, the government has introduced a star-rating system to evaluate steel based on its emissions, further emphasizing its commitment to reducing carbon footprints in the steel industry.
What is Green Steel?
Green steel is characterized by its carbon emissions, with the threshold set at 2.2 tonnes of CO2 per tonne of finished steel. The star-rating system categorizes steel based on emissions reductions:
- Five stars: Less than 1.6 tonnes of CO2 per tonne.
- Four stars: Between 1.6 and 2.0 tonnes of CO2 per tonne.
- Three stars: Between 2.0 and 2.2 tonnes of CO2 per tonne.
Steel exceeding 2.2 tonnes of CO2 emissions per tonne does not qualify as green steel. Currently, the Indian steel industry averages around 2.6 tonnes of CO2 emissions per tonne, highlighting the significant transformation needed to meet these standards.
Star-Rating System and Public Procurement
To incentivize sustainable production, the government has introduced a star-rating-based procurement policy. Under this policy:
- 37% of public procurement will be reserved for five-star rated green steel.
- 30% will be allocated to other green steel categories.
This move is expected to drive demand for environmentally friendly steel, encouraging manufacturers to adopt cleaner production methods.
The ₹15,000 Crore Green Steel Mission
India’s ambitious Green Steel Mission, backed by a ₹15,000 crore investment, aims to position the nation as a global leader in sustainable steel production. The initiative includes public procurement policies, financial incentives, and support for companies transitioning to green technologies.
The plan also explores innovative methods like replacing coal with hydrogen and biochar in steel production. However, the industry faces significant investment requirements of approximately ₹260,000-270,000 crore to overhaul existing processes. To aid this transition, the Ministry of Steel is seeking assistance from international organizations like the World Bank.
Protecting Domestic Industry
In addition to promoting green steel, the government is addressing challenges posed by rising steel imports. India is considering imposing safeguard duties of 20-25% on imports, particularly from Asian countries like China. These measures aim to protect domestic manufacturers from cheap imports and maintain the competitiveness of Indian steel in global markets.
A Global First with Far-Reaching Impacts
By setting clear standards for green steel and incentivizing sustainable practices, India is leading the way in reducing carbon emissions in one of the most energy-intensive industries. This bold initiative not only strengthens the nation’s position as a leader in sustainable manufacturing but also sets a global benchmark for other countries to follow.
As the world shifts toward greener industrial practices, India’s efforts in defining and promoting green steel could serve as a catalyst for global change, reinforcing its commitment to combating climate change while fostering economic growth.