Short Description:
India’s coal-based steelmaking poses a significant threat to its net-zero target by 2070, risking $187 billion in stranded assets, according to Global Energy Monitor’s recent findings.
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3 minutes and 45 seconds
Main Article:
India’s steel industry, while a vital component of its economy, faces substantial challenges regarding sustainability and emissions. According to a recent report by Global Energy Monitor, the ongoing investments in coal-based steelmaking not only jeopardize India’s target of achieving net-zero emissions by 2070 but could also lead to approximately $187 billion in stranded assets. The report highlights that India holds the world’s largest pipeline of steelmaking capacity in development, totaling around 258 million tonnes per annum (mtpa). A staggering two-thirds of this capacity relies on emissions-intensive basic oxygen furnaces, with electric arc furnaces making up a mere 13%.
Over the past two decades, India has expanded its blast furnace capacity significantly, creating a young and emissions-intensive fleet. With more than 75 mtpa of operating blast furnace capacity, over 43 mtpa are projected to require relining before 2030. This situation exacerbates the risk of emissions lock-in, complicating any transition away from coal-based steel production. The widespread use of coal as a reducing agent in direct reduced iron production further hinders emissions reduction efforts. More than half of the tracked direct reduced iron capacity relies on domestic high-ash coal, which, though cost-effective, brings higher emissions intensity.
India’s current steel sector is one of the most emissions-intensive globally, accounting for over 240 million tonnes of CO2 emissions annually—approximately 12% of the nation’s total carbon emissions. Alarmingly, this figure is expected to double by 2030. While short-term strategies may provide temporary relief, a significant, long-term shift away from coal is crucial to decarbonize the industry sustainably. Khadeeja Henna, a Heavy Industry researcher at Global Energy Monitor, emphasized the urgency of transitioning from the "build now, decarbonize later" approach, which could prove detrimental in the long run. Although India’s 2024 roadmap for greening its steel sector is a positive initiative, the pressing need for robust investment in a green steel ecosystem is clear.
In conclusion, India’s heavy reliance on coal for steel production poses a significant barrier to achieving long-term sustainability goals. An industry overhaul towards cleaner technologies is essential to avoid the financial fallout associated with stranded assets in the coal sector.
Short Summary:
India’s reliance on coal-based steelmaking threatens its net-zero emissions target by 2070, risking substantial stranded assets. The transition to greener production methods is urgently needed to avert a financial and environmental crisis, underlining the necessity for immediate action in the steel industry.
