Coal-based DRI key to Indian steel industry's higher emissions intensity

Morning Brief: The main source of carbon dioxide (CO2) emissions in steel-making is the use of thermal energy as fuel and reductant. Emissions vary with respect to the different routes of steel production.

As per industry sources, the typical CO2 emissions intensity of the integrated BF-BOF route of steel production in India is 2.5-2.7 tCO2/tcs (CO2 emissions per tonne of crude steel).

Notably, the global average emissions level through the primary route is around 1.8-1.9 tCO2/tcs. The key reasons why India lags behind globally in mitigating the CO2 footprint of primary steel-making are comparatively poor raw material quality and slow uptake of state-of-the-art efficiency measures.

On the other hand, 100% scrap-based steel-making has the least emissions intensity, as per estimates. Typical scrap-based steel-making in an EAF has CO2 emissions intensity of just 1.1-1.3 tCO2/tcs. This accounts for fossil-based electricity generation and coke used in electric steel-making for production of certain desired grades.

In contrast, DRI-based steel production, with subsequent melting of the ferrous charge in an electric furnace (typically the DRI-EAF route) has higher emissions of 1.5-1.7 tCO2/tcs. It is important to note that this level of emissions intensity is observable in DRI production with natural gas.

Substituting scrap with DRI leads to higher emissions depending on the type of energy used in DRI production. The predominantly Indian coal-based DRI route (coupled with electric melting) has an even higher emissions intensity than the BF-BOF route averaging around 3-3.1 tCO2/tcs.

In the BF-BOF route, with estimated global average process emissions at 1.9 tCO2/tcs, raw material preparation -- sintering, coking, lime production -- accounts for less than 0.6 tCO2/tcs.

While coke and sinter production have emissions of around 0.3 tCO2/tcs and 0.2 tCO2/tcs, respectively, lime production accounts for less than 0.1 tCO2/tcs.

Iron-making in BF has the highest share of over 68% in total process emissions in the primary route. While the BF zone typically accounts for 1.3 tCO2/tcs, steel-making in BOF has a footprint of 0.1 tCO2/tcs. Other downstream processes -- continuous casting, rolling, etc. -- account for around 0.1 tCO2/tcs.

In the EAF route, however, process emissions are far lower at around 0.4 tCO2/tcs, including downstream processes.

Emissions are from the carbon in steel, electrodes and from electricity generation.

In India, the penetration of best available technologies (BATs) in the steel industry is just 30%. Industry experts informed SteelMint that the challenges related to mid- and long-term decarbonisation are multifold. The key challenges are:

Demand for green steel: Generation of demand for green steel will depend on regulatory and policy measures such as carbon pricing, financial incentives for low-emissions steel, and guaranteed uptake and preference for low-emissions steel, especially in government procurement.

Financing: Suitable transition financing for steel producers, viability gap financing, etc.

Switching to renewables: The challenges associated with availability of renewable energy at scale and viable prices. Also, the near-term difficulties involved in scaling up production, storage and transportation of greener fuel such as hydrogen.

Lack of proper taxonomy: The absence of a universal definition or standard for green steel. Currently, there are around 28 green steel standards worldwide.

The need for a uniform green steel standard is also significant when it comes to process-level emissions monitoring at mills. As interim decarbonisation measures, mills are adopting technical, material and process efficiency measures in the BF-BOF route of steel production as well as adopting renewables and scrap usage in a major way. The major mills have targets of reducing emissions by over 40% by 2030 from 2005 levels.