The Green Steel Taxonomy, launched by the Union Ministry of Steel, is a groundbreaking initiative to decarbonise India’s steel industry and achieve net-zero emission intensity by 2070. This classification framework sets clear standards for evaluating and certifying steel products based on their environmental impact. Read here to learn more.
India has achieved a significant milestone in pursuing low-carbon development and sustainable industry practices by unveiling the Taxonomy of Green Steel on 12th December 2024 at Vigyan Bhavan, New Delhi.
This initiative aligns with India’s commitment to achieving net-zero emission intensity in the steel sector by 2070, as part of its broader climate goals.
The release of the Taxonomy of Green Steel marks a crucial step in advancing the National Mission on Green Steel.
Green Steel Taxonomy
India becomes the first country to develop and publish a comprehensive taxonomy for green steel, setting a precedent globally.
This step addresses the absence of a universally accepted definition of green steel, providing clarity for the Indian steel industry to align with decarbonization goals.
Salient features:
- Green Steel is defined as steel with a CO₂ equivalent emission intensity of fewer than 2.2 tonnes of CO₂e per tonne of finished steel (tfs).
- The steel’s greenness shall be expressed as a percentage based on how much the steel plant’s emission intensity is lower compared to the 2.2 t-CO2e/TFS threshold.
- Star Rating System:
- A star rating system is introduced to classify steel products based on their “greenness.”
- The ratings are reviewed every three years to reflect advancements in decarbonization technology.
- Current Star Rating Thresholds:
- Five-star green-rated steel: Steel with emission intensity lower than 1.6 t-CO2e/tfs.
- Four-star green-rated steel: Steel with emission intensity between 1.6 and 2.0 t-CO2e/tfs.
- Three-star green-rated steel: Steel with emission intensity between 2.0 and 2.2 t-CO2e/tfs.
- Steel with an emission intensity higher than 2.2 t-CO2e/tfs shall not be eligible for a green rating.
- Review of threshold limit: The threshold limit for defining the star rating of Green Steel shall be reviewed every three years.
- Scope of emissions: The scope of emissions shall include Scope 1, Scope 2, and limited Scope 3, up to finished steel production.
- Scope 3 emissions shall include agglomeration (including sintering, pellet making, and 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.
- Nodal Agency: The National Institute of Secondary Steel Technology (NISST) is designated as the nodal agency.
- Responsibilities include measurement, reporting, and verification (MRV), as well as issuing annual greenness certificates and star ratings.
- The certificate shall be issued yearly (financial year). In case the steel plants opt for MRV more frequently, then the certificate may be issued more than once a year as per the requirement.
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Importance of the Green Steel Taxonomy
- Advancing the National Mission on Green Steel:
- Supports the proposed ₹15,000 crore National Green Steel Mission under the upcoming Green Steel Policy.
- This mission aims to accelerate the adoption of low-carbon technologies and renewable energy in steel production.
- Boosting Global Competitiveness:
- Strengthens the Indian steel sector’s position amidst global carbon regulations like the European Union’s Carbon Border Adjustment Mechanism (CABM).
- Positions India as a leading exporter of green steel, meeting global sustainability standards.
- Promoting Innovation and Growth:
- Encourages the adoption of innovative decarbonization technologies, such as green hydrogen, renewable energy, and carbon capture.
- Creates a market for low-carbon steel products, spurring demand and economic growth.
- Environmental Impact:
- Helps reduce the steel sector’s carbon footprint, aligning with India’s broader climate goals under the Paris Agreement and the 2070 Net-Zero Target.
India’s Steel Sector and Decarbonization Goals
- Importance of the Steel Sector:
- The steel industry is one of the largest contributors to greenhouse gas emissions globally, accounting for about 7–9% of global CO₂ emissions.
- In India, the sector is critical for economic growth and industrial development, necessitating a balance between growth and environmental responsibility.
- Green Steel and Decarbonization:
- Green steel refers to steel produced using processes that significantly reduce carbon emissions, such as renewable energy, green hydrogen, and carbon capture, utilization, and storage (CCUS).
- The adoption of green steel technologies will play a pivotal role in meeting India’s 2070 net-zero targets.
- Innovations and Initiatives:
- Focus on adopting Direct Reduced Iron (DRI) using green hydrogen.
- Enhancing energy efficiency through advanced technologies and circular economy principles.
- Collaboration with international stakeholders to adopt best practices.
Way Forward
- Implementation:
- Effective roll-out of the Green Steel Policy and funding under the National Green Steel Mission.
- Collaboration between the government, industry stakeholders, and international partners.
- Incentives and Support:
- Financial incentives for adopting low-carbon technologies.
- Development of supporting infrastructure, such as green hydrogen production and renewable energy capacity.
- Global Leadership:
- Promote the Green Steel Taxonomy as a model for other nations to emulate, fostering international collaboration on sustainable steel production.
Conclusion
The Green Steel Taxonomy is a transformative step, signalling India’s leadership in sustainable industrial practices and its commitment to achieving climate resilience through innovation and collaboration.
The green steel taxonomy serves as a benchmark to guide the industry toward low-emission steel production, fostering innovation and collaboration.
It aligns with global best practices and the latest technological advancements to ensure competitiveness and sustainability.
Frequently Asked Questions (FAQs)
Q. What is the concept of green steel?
Ans: Green steel refers to steel produced using environmentally friendly and sustainable methods. This usually involves using renewable energy sources, reducing carbon dioxide emissions, and minimising and recycling waste during the production process.
Q. Where is the world’s first green steel plant?
Ans: The world’s first large-scale green steel plant is the H2 Green Steel plant in Boden, Sweden:
- Location: The plant is located in the Swedish Norbotten region, near Boden.
- Technology: The plant uses renewable hydrogen to produce green steel.
- Production: The plant is expected to produce green steel by 2025 and ramp up production in 2026.
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-Article by Swathi Satish
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