India is seeking more data, and greater transparency from its steel-makers on embedded carbon-emissions during the metal-making process, especially with CBAM getting into the transitional phase.

The steel industry, in India, accounts for roughly 12 per cent of the total CO2 emissions, registering an average emission intensity of 2.6 tonnes of CO2, per tonne of crude steel, in comparison to 1.91 tCO2 /TCS globally.

Across recent meetings with the industry, different ministries, including Steel, have pointed out details about embedded carbon emissions – specifically, about, raw material processing to final product, which, could help India gain leverage in explaining its case against the CBAM guidelines.

“There needs to be greater data reporting across Scope 1, 2, and 3 emission levels. Especially, the recording of carbon emissions at each level of the production process,” an official aware of the discussions, told businessline.

“A basic reporting proforma, for embedded carbon emissions at each stage of the steel-making process is being worked on,” another official said.

Emission Types

Typically, emissions are categorised into Scope 1, 2 and 3 levels.

Scope 1, refers to direct emissions, i.e. emissions associated with the day-to-day activities that the company owns or controls. For example, from the operation of machinery or use of vehicles.

Scope 2, refers to indirect emissions associated with the production of energy that the company purchases, in other words, the company’s electricity consumption.

Scope 3, includes all indirect emissions, apart from electricity (scope 2), that are related to the company’s activities, such as emissions from the production of materials, used by the company or emissions from transportation.

The Scope 1 & 2 emissions, from iron and steel industry, here, are mainly due to high dependency of BF-BOF (blast furnace – basic oxygen furnace) process on coking coal, for iron making.

Global Comparison

Around 90 per cent of the total emission, is from the BF-BOF process, while, the remaining 10 per cent are from scrap – EAF (electric arc furnace).

“The emission from EAF process is lower than BF-BOF, due to removal of an iron making step from Iron Ore, resulting in shortage of scrap,” the official said.

According to the World Steel Association, every tonne of steel produced globally, leads to 1.92 tonnes of CO2 being emitted. This emission, varies between 0.67 to 2.32 tonnes of CO2, per tonne of crude steel cast, depending on what kind of method was used for production.

Industry concerns

Industry participants, have expressed dissatisfaction in “divulging such detailed numbers,” citing them as “sensitive”. “There is no guarantee against leak of such information, or relief measures in such cases,” an exporter said.

Another steel industry player said, reporting on emissions are done as per the SEBI guidelines, “following all legal requirements”. “EU mandated auditors, are already being appointed. Then, we share the same data separately with the Centre, here. It makes the process cumbersome,” he said.

In fact, steel mills are also “against” paying EU any such “carbon tax”. The counter proposal, is, that India should collect any such additional payment, domestically. Exporters are seeking “a refund” of such payments through reduction in taxes and “subsuming of state taxes”.

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