India has recently become the first nation to officially define “green steel,” which includes steel produced with carbon dioxide emissions of less than 2.2 tonnes per tonne of finished steel. The government has also introduced a star-rating system to evaluate green steel based on its emissions.
Green steel is defined by its carbon emissions relative to the established threshold. Steel must emit less than 2.2 tonnes of CO2 per tonne to be considered green. The rating system categorizes steel by its emissions reductions, with five stars awarded to steel emitting less than 1.6 tonnes.
The green steel initiative aims to position India as a global leader in sustainable steel production. The Ministry of Steel is launching a Rs15,000 crore Green Steel Mission to facilitate this transition. This mission will include public procurement policies and financial support for companies adopting cleaner technologies.
The government proposes that 37% of public procurement be allocated to five-star rated green steel. An additional 30% will be directed towards other green steel options. This strategy aims to incentivise the production and use of environmentally friendly steel.
The steel industry requires a capital investment of approximately Rs 260,000-270,000 crore to transition to greener methods. These methods may involve using hydrogen and biochar instead of traditional coal-based processes. The Ministry is also seeking support from international agencies like the World Bank.
In response to rising imports, India is considering imposing safeguard duties on steel imports, especially from Asian countries. This includes a potential 20-25% duty for two years to protect the domestic steel industry from cheap imports, particularly from China.
