India defines green steel; will rate companies on basis of emission intensity for steel production
- India launched a green steel taxonomy, becoming among the first country globally to have clearly determined parameters for decarbonized steel.
New Delhi: India on Thursday came up with a definition of what constitutes 'green steel', becoming one of the first countries to lay down clear parameters for decarbonized steel.
Steel is among products targetted by the European Union for its CBAM tax on carbon-intensive imports.
The taxonomy framework, launched by Union minister for steel and heavy industries H.D. Kuamaraswamy, is a step towards transforming India’s steel industry into a more sustainable, low-carbon sector by defining a clear framework for promoting the adoption of green technologies in steel production.
Kuamaraswamy said decarbonization of steel was of utmost importance as the industry accounted for almost 7% of global CO2 emissions.
With taxonomy in place, the minister said, India is poised to lead the global transition to sustainable practices while maintaining its growth.
Also read: How India plans to push green steel with production, purchase mandates
Taxonomy deals with naming, describing, classification or categorization of a process or an item. It helps to better understand a product or a process and facilitates its smooth adoption.
For the steel sector, taxonomy is a prerequisite for developing a coherent policy for decarbonizing the sector and creating demand for products with green attributes.
Globally, there is no commonly accepted definition of green steel yet, though multiple organizations and various countries are working on it, the steel ministry said in a statement adding that India is the first nation to take initiative in this direction.
Within India, developing a just and fair definition will incentivize incremental decarbonization across various production pathways. Creating an ecosystem equipped with monitoring, reporting and verification (MRV), green steel certification and registry would be critical to ensuring cost-effective decarbonization of the sector, the statement added.
How will this help
The taxonomy will also serve as a foundational tool for the development of green steel market, driving investments in green technologies, paving the way for a robust ecosystem of green innovation and thus enhancing India's role in the global industrial decarbonization landscape, the statement said.
The taxonomy is expected to align India's steel industry with global practices while meeting the commitments the country has made under the Paris accord. India has committed to a net-zero target by 2070.
Kumaraswamy said that with the support of all stakeholders, India is set to emerge as a global leader in green steel production.
Also read: India gears up for national green steel mission as demand surges
The taxonomy has provided a clearer definition of green steel in India. It has been defined in terms of the percentage of greenness of the steel, with carbon equivalent emission intensity of less than 2.2 tonnes of carbon per tonne of finished steel (tfs).
The green steel would be rated. Emission intensity lower than 1.6 tonne of carbon per tonne of steel will be given a five-star rating, between 1.6-2.0 tonne emission four stars and between 2.0 and 2.2 tonne of carbon per tonne of steel will get two stars.
Steel with emission intensity higher than 2.2 tonne of carbon will not be not be eligible for green rating. The threshold limit for defining star rating will be reviewed every three years.
Under the green steel taxonomy, the scope of emissions will include Scope 1, Scope 2, and limited Scope 3, up to finished steel production. Scope 3 emissions shall include agglomeration (including sintering, pellet making, coke making), beneficiation, and embodied emissions in purchased raw materials and intermediary products, but shall not include upstream mining, downstream emissions and transportation emissions, both within and outside the gates of a steel plant.
Also read: A new way to make green steel
Green star-rating of the steel of the registered steel plant shall be based on the emissions incurred till finished steel production stage. The National Institute of Secondary Steel Technology (NISST) will serve as the nodal agency for measurement, reporting, and verification (MRV) as well as for issuing the greenness certificates and star ratings for the steel. s would be required to register with NISST to obtain greenness certificates and star rating for their products.
A registry of green-rated steel will also be maintained by NISST. For registry, a one-time amount of ₹10,000 shall be charged per Steel Plant by the NISST. For certification, an amount of ₹1,000 shall be charged for every 500 tonne of Finished Steel certified. The certificate shall be issued on yearly basis (financial year).
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Business NewsEconomyIndia defines green steel; will rate companies on basis of emission intensity for steel production
First Published:12 Dec 2024, 06:45 PM IST
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