How steelmakers are turning up heat in furnaces for the war on emission

Earlier this month, rain and floods in Himachal Pradesh claimed 70 lives. The total damage has been pegged at Rs 10,000 crore and may take a year to undo.

This is just one in a series of weather events in a summer of ext­remes. From soaring tempera­tures in Europe to floods in China, Spain and New York’s Hudson Valley, and the deadly wildfire in Hawaii — the effects of climate change have manifested in myriad ways.

“In the last 200 years, carbon dioxide levels have increased due to industrial activity leading to global warming. And it is accelerating,” says Debashish Bhattacharjee, vice-president, technology and R&D, Tata Steel. “Between 1970 and 2000, the temperature had been increasing at 0.18 degrees centigrade per decade, but, in the last 20 years, the rate of increase has doubled to 0.36 degrees centigrade.”

Bhattacharjee belongs to a hard-to-abate sector, steel, which uses car­bon as an integral part of its pro­cess. The sector contributes about 7 per cent to the global energy-related carbon emissions, making it one of the biggest contributors to climate change. That steel is nearly omni­present — in everything from wash­ing machines and refrigerators to cars, airplanes, buildings and bridges — makes reducing carbon emissions in the sector imperative.

In addition, the European Union is introducing the transitional phase of its Carbon Border Adjustment Mechanism from October 1 this year. The framework, says ICRA, will affect 15 to 40 per cent of India’s steel exports to Europe from 2026 onwards. The way out is to reduce carbon footprint.

On the other hand, India’s top steel players — Tata Steel, JSW Steel, ArcelorMittal Nippon Steel India (AM/NS India), Jindal Steel & Power, and Steel Authority of India Ltd (SAIL) — have lined up expansion plans in line with the country’s 2031 target of 300 million tonne (mt) crude steel capacity, almost double the current level.

Most of this expansion, at least in the near term, would be through the centuries-old blast furnace process, of which carbon is a critical part. This has been the process of choice for companies around the world, accounting for more than 70 per cent of steel manufacturing, though some of that is now being replaced with other processes.

But a large amount of capex has been sunk in setting up blast furnaces that can easily work beyond 2040 or 2045, an industry expert points out. Wishing it away is not an option. Also, blast furnaces make sense for India, companies argue. Other processes, such as electric arc furnaces, use scrap or direct reduced iron as major inputs. And scrap availability is a challenge.

“We don’t generate as much scrap as yet. Usually it takes 30 years for steel to be used and scrap to come back,” Jayant Acharya, joint mana­ging director and chief executive officer, JSW Steel, says.

Moreover, electric arc furnaces require a very high grade of iron ore, typical­ly with an iron content in excess of 67 per cent. “That’s not available in India in large amo­unts,” says Bhattacharjee. However, these furnaces will have a role to play in the net-zero scenario, he adds.

Hetal Gandhi, director-research, at CRISIL Market Intelligence and Analytics, expects 10-12 mt to be added through electric arc furnaces by the major players. “Energy- and process-efficient blast furnace technology will help reduce carbon emissions,” he says.

The levers for reducing emissions broadly being used are: improving process efficiency, increasing the share of renewable energy, and ensuring complete recovery of waste heat gases generated in the plant. Then there is a whole gamut of innovations being piloted. 

“Part of the road map is achieving a carbon intensity of 1.8tCO2/tcs (tonnes of carbon dioxide per tonne of crude steel) by 2030. But we need a plethora of technologies that will work simultaneously to take care of the CO2 emission,” Bhattacharjee says. The current intensity is 2.4-2.5tCO2/tcs.

The pathway to green steel, which is yet to be defined, or low-carbon steel is constantly evolving with new technologies and experiments, but hydrogen as an alternative reductant and carbon capture are fast emerging as candidates for achieving the goals.

On a trial basis, Tata Steel injected a record amount of hydrogen in the blast furnace. JSW Steel, too, is trying to put up a pilot green hydrogen plant on a trial basis in Vijaynagar (Karnataka).

But hydrogen cannot fully replace carbon in the blast furnace. “So long as you have blast furnaces, you can reduce carbon to a certain extent but not fully. You will have significant CO2 coming out from the top,” Bhattacharjee says.

So, companies are using the carbon capture route for using CO2 as raw material. Tata Steel has set up a 5 tonnes per day (tpd) carbon capture plant at Jamshedpur Works (Jharkhand) and will put up a 15 tpd plant at Kalinganagar (Odisha). 

JSW Steel has implemented a 100 tpd carbon capture unit on a pilot basis. AM/NS India plans to embark on a research partnership to determine the feasibility of carbon capture at scale in India with leading academic institutes.

The startup world is also being tapped for innovative solutions by Tata Steel, ArcelorMittal, as well as JSW.

“We are in discussions with 400 startups. Around 100 are pertinent to decarbonisation and sustainability, including waste heat for useful energy transition,” Bhattacharjee says.

But the industry is not just about the Big Boys, even though they account for more than 60 per cent of the production. The capital and operational expenditure of transition are high and governments across the world are lending financial support.

The Ministry of Steel has set up 13 task forces to identify the challen­ges for production and consumption of “green steel” in India.

The transition will cost a lot and the ecosystem has to evolve. Steel yourself for tricky times.