Wednesday, July 24, 2024

₹47 Trillion Needed for India’s Steel and Cement Sectors to Achieve Net-Zero

In a groundbreaking study, the Council on Energy, Environment and Water (CEEW) has revealed the monumental financial commitment required for India’s steel and cement industries to achieve net-zero carbon emissions. These industries, pivotal for India’s economic growth, are estimated to need an additional ₹47 trillion in capital expenditure, accompanied by an annual operational expenditure (OPEX) of ₹1 trillion. This represents the first comprehensive cost analysis for decarbonizing these traditionally emission-intensive sectors.

The study also sheds light on the potential for significant emissions reduction in these sectors without inflating costs. It suggests that emissions in the steel industry can be reduced by 8-25%, and the cement industry by 32%, primarily through the adoption of technologies such as waste-heat recovery and energy-efficient systems. The research, funded by ‘bp,’ an integrated energy company, provides crucial insights into the challenges and costs associated with the transition to near net-zero emissions in these industries.

As of the study, the Indian steel industry emitted a staggering 297 million tonnes of carbon dioxide in crude steel production during 2021-22, resulting in an average emission intensity of 2.36 tCO₂/tcs (compared to the global average of 1.89 tCO₂/tcs). Achieving near net-zero steel production is anticipated to incur a cost increase ranging from 40-70%, depending on the technology, production methods, and the utilization and storage of captured carbon (CCUS).

The Indian cement industry, despite being among the world’s most energy-efficient, released 218 million tonnes of CO2 in 2018-19 while producing 337 million tonnes of cement. This is partly attributed to fossil fuel usage and inherent emissions from limestone processing. The study highlights that approximately 50% of cement plants in India need access to CO2 pipelines for carbon capture and storage, which could be constructed using existing natural gas pipeline routes. Without these pipelines, plants cannot opt for CCUS.

To expedite the transition to net-zero emissions, the CEEW study calls for the adoption of highly efficient energy technologies and incentives for renewables through minimal or zero transmission charges. It also urges the government to prioritize the establishment of a comprehensive CCUS ecosystem and leverage hydrogen’s pivotal role in this endeavor. These recommendations align with the next phase of the National Green Hydrogen Mission. Sashi Mukundan, President of bp India and Senior Vice President of bp Group, underscores the complexity of India’s transition to net-zero and the need for technology advancements and supportive policies in order to tackle carbon-intensive sectors effectively. The partnership between ‘bp’ and CEEW is geared toward optimizing pathways to net-zero emissions for these challenging-to-decarbonize sectors.

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