India’s Green Steel Taxonomy

Syllabus: GS3/ Environment

In News

• India is the first country globally to define a taxonomy for green steel. The Taxonomy marks a milestone in India’s decarbonization journey in the steel sector.

What is the Green Steel Taxonomy?

• Definition: It’s a framework that defines “green steel” based on its carbon emission intensity. This is the first such taxonomy globally, making India a pioneer in setting standards for sustainable steel production.
• Key Features:
  • Emission Intensity Threshold: Steel is considered “green” if its CO2 equivalent emission intensity is less than 2.2 tonnes of CO2e per tonne of finished steel.
  • Star Rating System: A star rating system categorizes green steel based on emission intensity:
    • Five-star: < 1.6 tCO2e/tfs
    • Four-star: 1.6 – 2.0 tCO2e/tfs
    • Three-star: 2.0 – 2.2 tCO2e/tfs
  • Scope of Emissions: Includes Scope 1 (direct emissions), Scope 2 (indirect emissions from energy consumption), and limited Scope 3 emissions (indirect emissions from the supply chain).
  • Nodal Agency: The National Institute of Secondary Steel Technology (NISST) will be responsible for measurement, reporting, verification (MRV), and issuing greenness certificates.
  • Review: The emission intensity threshold will be reviewed every three years to ensure continuous improvement.

Benefits of Green Steel Taxonomy 

• Environmental Sustainability: Promotes decarbonization of the steel sector, a major contributor to greenhouse gas emissions.
• Global Leadership: Establishes India as a frontrunner in defining green steel standards.
• Market Creation: Drives demand for low-carbon steel products and encourages innovation in sustainable steelmaking technologies.
• Policy Coherence: Provides a clear framework for developing policies and incentives to support green steel production.

Challenges

• Implementation: Meeting the emission intensity targets will require significant investments and technological advancements.
• Data Collection and MRV: Accurate and reliable measurement, reporting, and verification of emissions will be crucial.
• Competitiveness: Ensuring that Indian steel remains competitive in the global market while meeting the green steel criteria.

Initiatives to Decarbonise Steel Sector in India

• National Mission on Green Steel (NMGS): This mission aims to provide a framework for the transition to green steel production, including financial incentives, R&D support, and policy interventions.
• Green Steel Public Procurement Policy (GSPPP): This policy will promote the use of green steel in government procurement, creating a market for low-carbon steel products.
• Steel Scrap Recycling Policy 2019: Encourages the use of scrap in steel production, reducing reliance on primary production routes that are more carbon-intensive.
• Perform, Achieve and Trade (PAT) Scheme: Incentivizes energy efficiency improvements in the steel sector.
• Carbon Capture, Utilization and Storage (CCUS): While still in early stages of development in India, CCUS technologies have the potential to capture and store carbon emissions from steel plants.

Source: PIB