Economic Survey highlights green steel’s vital role amidst global climate challenges

Green steel is poised to play a “pivotal role” in reshaping the future of the sector “as the world moves towards a low-carbon economy,” the Economic Survey 2023-24 has said.

Green steel typically refers to the metal produced from low carbon sources that include use of hydrogen in the manufacturing process, substitution of fossil fuels such as coking coal, among others.

“As the world moves towards a low-carbon economy, green steel is poised to play a pivotal role in reshaping the future of the steel industry,” the Survey noted.

The steel sector accounts for 12 per cent of India’s greenhouse gas emissions, with an emission intensity of 2.5 tonnes of CO2 per tonne of crude steel, compared to the global average of 1.9 tonnes of CO2 per tonne of crude steel.

The survey mentions India’s per capita emissions have remained consistently low between 2.5 and 2.8 tonnes CO2 eq / year (carbon dioxide equivalent), despite substantial economic growth over the last decade. In comparison, per capita emissions of 26 of the EU27 nations was around 8 tonnes CO2 eq /year; almost three times that of India.

It adds that there are “extreme disparities and large and persistent inequalities in historical and current global energy consumption,” and in such a scenario, the targets and strategies for the attainment of zero emissions “should not be dictated or mandated”.

On CBAM

Ongoing discussions around EU’s proposed carbon tax has shown that that the developed world is unwilling to accept the financial impact of changes in their consumption-oriented lifestyle, CBAM (Carbon Border Adjustment Mechanism) Research said. However, research says otherwise.

Almost 63 per cent of respondents of the OECD Environmental Policies and Individual Behaviour Change Survey in 2022 (administered to over 17,000 households) feel that sustainable choices should not impact them financially. And, therefore, “they are unwilling to pay extra”. “Contrast this directly with the CBAM tax that EU is willing to impose on products such as steel, for the so-called ‘fair price on carbon emitted’ during production, imported from developing countries,” India’s Economic Survey said.

“The question seems (to be) less about sustainable choices, but more about a new play for capitalism,” it said, pointing out that the plan seems to be so that “the old status quo keeps thriving, and the ‘emerging’ are in a perpetual state (continues to be uncertainty).”

The survey also mentions that based on research, developing countries require $6 trillion by 2030 to achieve “just about half of their existing NDC (nationally determined contributions) target”. Against this, $100-billion was pledged by developed countries till 2032, of which only $83.3 billion was provided.