Public Procurement of Green Steel

Syllabus :GS 3/Economy; GS 3/Environment 

In News

The Indian government is finalising a green steel procurement policy, potentially mandating that 25% of public steel purchases be low-emission “green steel.” 

• The goal is to create market demand and prevent green steel from being undercut by cheaper, high-emission alternatives. 

What is Green Steel?

• It refers to steel produced using low-carbon technologies, primarily by replacing coal-based blast furnaces with hydrogen-based direct reduced iron (DRI) processes or electric arc furnaces powered by renewable energy.
• It aims to reduce greenhouse gas emissions from one of the most carbon-intensive industries globally.

 Importance

• The steel industry accounts for 10-12% of India’s total emissions.
  • Therefore, the sector’s decarbonisation is imperative for India to meet its climate goals.

• Steel is foundational to infrastructure, automotive, and manufacturing sectors.
  • Greening it ensures sustainable industrial growth.
• India became the world’s second-largest steel producer in 2018 surpassing Japan and remained so since then.
  • Transitioning to green steel can position it as a climate-responsible global supplier.

Challenges

• Green steel production is  more expensive than conventional methods.
• Hydrogen-based DRI and carbon capture technologies are still evolving and not widely commercialized.
• Producing green hydrogen requires massive renewable energy capacity, which is still under development.
• Lack of mandatory procurement norms and weak demand-side incentives hinder adoption.

Steps Taken in India

• The Ministry of Steel has released a report titled “Greening the Steel Sector in India: Roadmap and Action Plan” in alignment with the recommendations of the 14 Task Forces constituted by this Ministry for this purpose.
  • This report provides a comprehensive overview of the steel sector, discusses the various pathways for the decarbonisation of the steel sector and chalks out the strategy, action plan and roadmap for the same.
• Use of steel scrap as raw material reduces emissions by 58%.
  • Steel Scrap Recycling Policy, 2019, formulated by the Ministry of Steel envisages to enhance the availability of domestically generated scrap. Motor Vehicles (Registration and Functions of Vehicles Scrapping Facility) Rules September 2021 of Ministry of Road Transport & Highways envisages to increase availability of scrap in the steel sector.
• The National Solar Mission launched by the Ministry of New and Renewable Energy in January, 2010 promotes the use of solar energy and also helps to reduce the emission of steel industry.
• Perform, Achieve and Trade (PAT) scheme, under National Mission for Enhanced Energy Efficiency, incentivizes steel industry to reduce energy consumption.

Conclusion and Way Ahead 

• Green steel is essential for India’s climate goals and industrial growth. 
• Through coordinated policies, innovation, and investment, India can become a global leader in sustainable steel production.

Source :BS