View: CO2, the gas India wants to sell more

Steel is produced through two process routes: from iron ore to steel and scrap to steel. With the former, oxygen contained in iron (oxide) ores is removed using carbon (mainly in the form of coke) in the blast furnace (BF). The liquid iron obtained through this process is subsequently refined in the basic oxygen furnace (BOF) to produce crude steel.

Another way to reduce ores into iron is via the direct reduction route. Iron oxides are converted to metallic iron at temperatures below the melting point of iron. This solid-state process produces reduced iron (DRI). In India, as much as about 77% of DRI is produced in coal-based rotary kilns.

With the scrap-based route, crude steel production occurs by melting steel scrap using electrical energy, either in an electric arc furnace (EAF) or an induction furnace (IF).

Most carbon dioxide (CO2) emitted by steel plants is associated with the use of carbon to convert iron ore to iron in the blast furnace. Even though steel production using an electric furnace is less carbon-intensive, the limited load bearing capacities of the electric furnace route vis-à-vis recycled scrap scarcity puts restrictions in certain instances.

With heavy reliance on coal, the BF-BOF route contributes 45% of India’s steel production. Data on new capacity enhancements through the BF-BoF route over the last few years indicate that the blast furnace still remains an attractive option in India. As such, abandoning those new age (5-year or less) industrial assets before the end of their economic lifetime (largely 12-25 years) for emission reduction will result in large sunk costs for Indian steel plants. Thus, the challenges for steel plants remain reducing emissions with emission-intensive blast furnaces.

The Energy Conservation (Amendment) Bill, 2022, has been passed in Rajya Sabha as a significant development in terms of India’s progress towards its 2070 net-zero target. As per the Amendment Act, GoI would put a price on carbon emissions from high- emissive industries like steel. On this path, carbon capture, utilisation and storage (CCUS) technologies are being viewed as one of the practical ways to achieve decarbonisation in the steel sector. However, without rapid progress in the area of CO2 utilisation, the pace of implementation of such projects will suffer.

As estimated by the International Energy Agency, globally, 230 million tons of CO2 are used every year. The largest consumer is the fertiliser industry, followed by oil and gas. The gas is also widely used in urea manufacturing, the production of carbonated drinks, modified atmospheric packaging in the food industry, chilling and freezing applications, metal fabrication, greenhouses, and the medical industry. Ongoing global innovation has led to the utilisation of CO2 in the production of building materials. The valorisation of captured carbon, which would provide an additional revenue stream for primary steel-makers, has the potential for emission reduction.

The global trade statistics released by the UN Comtrade database shows India’s CO2 import grew drastically from 111.4 tons in 2016 to 1102 tons in 2021, signalling the rising domestic demand for the gas.

However, a comparatively higher demand in the international market indicates that the time has come for India to look beyond carbon capture technologies through:

• Quantification of domestic demand for the gas by conducting a statistical survey
• Expedition of more uses of CO2 by investing in research studies
• Identification of global customers for selling CO2 at competitive prices. New thinking, new actions, and new messaging to build a circular economy that recycles CO2 will stabilise emission levels from the hard-to-abate sectors.

(The writer is Deputy Director General, Steel Ministry, Government of India)