India: Govt setting up robust CO2 monitoring standards for mapping steel industry emissions

• BEE nodal agency for preparing MRV methodology for steel sector
  
  
• Accurate Scope 3 measurements vital for tracking value chain emissions
  
  
• New MRV framework under CCTS includes only CO2, excludes other GHGs
  
  

Morning Brief: The Ministry of Steel (MoS) is working on adopting a definition of 'green steel' (low-CO2 emissions steel) for the country which is expected to be released shortly. A fixed definition, in terms of the amount of CO2 emissions generated in the production of 1 tonne of crude steel, will be necessary for the creation of demand in the country for low-emissions steel products, primarily through the Green Public Procurement Programme (GPPP) of the government.

Similarly, a fixed definition will also create a threshold for trading in carbon certificates under the Carbon Credit Trading Scheme (CCTS) of the government currently spearheaded by the Bureau of Energy Efficiency (BEE) under the Ministry of Power.

BEE is developing an Indian Carbon Market (ICM) under the CCTS scheme to meet India's climate goals. The ICM will set targets for the emission intensity of steel for all industries covered under the scheme. It is expected that the definition of green steel in India will align with the targets set under ICM.

Emissions scope, boundaries

In order to set emissions standards, it is important to measure emissions. As per the draft proposals prepared by the MoS-appointed taskforces on green steel, the iron and steel companies in India are measuring and reporting Scope 1 and Scope 2 emissions on a voluntary basis using different methodologies such as those proposed by WSA, ISO and others.

The iron and steel plants are reducing their Scope 1 emissions - those under their direct ownership - with operational efficiency, predictive maintenance, etc. Strategies to address the reduction of Scope 2 emissions by these industries include power purchase agreements and a mix of renewable energy sources.

However, Scope 3 emissions, including upstream (procurement of raw materials, shipping) and downstream (transport, warehouse management, scrap processing) emissions, are complex due to lack of data and clarity and thus, Scope 3 emissions are not fully adopted internationally.

However, tracking emissions across the value chain is a significant dimension of emissions monitoring, reporting and verification (MRV). For example, as illustrated in the figure above, in India's coal DRI-EIF steel production route the share of mining-related emissions (Scope 3) is just 4% of the total. The ironmaking zone (Scope 1) accounts for the bulk of emissions at 72%.

However, both material processing (upstream) and downstream operations (both Scope 3) constitute a certain share of total emissions including mining. It is vital to calculate this is order to ensure proper emissions monitoring across the value chain.

Similarly, in the BF-BOF route of steelmaking, over 90% of total emissions are accounted for by the BF and converter stages. Nevertheless, the emissions associated with iron ore and coal mining, especially fugitive methane emissions from coal mining, upstream material processing, upstream and downstream logistics need to be factored in while arriving at total emissions from the route.

Notably, WSA's emissions methodology excludes mining operations from Scope 3 emissions, as well other non-CO2 GHG gases such as methane (CH4) ), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6).

• It focuses exclusively on monitoring of CO2 emissions
  
  
• It specifies the necessary boundary settings for accurate emissions accounting
  
  
• It covers both direct and indirect emissions
  
  
• It has provisions to exclude renewable energy sources such as biomass or renewable energy (power), which can benefit overall emissions reduction and accounting
  
  
• It can be expanded to include limited Scope 3 emissions, as per WSA or ISO standards