Talks To Decarbonise Steel Industry, Prepare Towards CEM13

Steel sector emissions need to fall by at least 50% by 2030

The Clean Energy Ministerial (CEM)-Industry Deep Decarbonisation Initiative (IDDI) will be gathering in New Delhi between April 4-8, 2022.

The meeting is a preparatory gathering towards the CEM13 ministerial to be held in September in Pittsburgh, USA, where governments will announce their ambitions to decarbonise industries, including by making green public procurement policy commitments and setting procurement targets that can help spur a rapid response by major industries.

Energy accounts for around three-quarters of total greenhouse gas (GHG) emissions globally and emissions from heavy industry make up between one-fifth and a quarter of the total respectively. To avoid the worst impacts of climate change, science dictates we must reach net-zero GHG emissions by 2050, which requires deep decarbonisation from all sectors including industry.

The meeting comes at the heels of the Intergovernmental Panel on Climate Change’s (IPCC) report on Mitigation, which underscored the need for industry to take rapid steps towards decarbonisation. The steel industry for instance needs to decarbonise quickly if we are to keep global warming below 1.5°C. The annual global steel production is almost 2BMT and contributes to over 7 percent of the total GHGs. Steel sector emissions need to fall by at least 50% by 2030 and by 95% by 2050 on 2020 levels to align with a 1.5°global warming pathway.

However, current predictions suggest that steel demand will increase to over 2.5 BMT annually by 2050 with the majority of that growth in emerging economies. In countries like India, the development needs are extremely critical and cannot be compromised.

India is the third largest steel producer in the world and most of the steel produced in India is used domestically. According to the IEA, by 2050 almost one-fifth of the steel produced globally is expected to come from India, compared to around 5% today.

About 80 percent of India’s infrastructure is yet to be built, which means that hard to abate sectors like steel play a crucial role in setting decarbonisation goals to help India meet its 2030 and NZ targets. India is already the world’s second-largest steel-producing country and is expected to increase its annual production volumes by 2050 by an amount equivalent to twice that of the European Union’s total production in 2019. The Covid-19 crisis is hitting the country’s steel industry hard, but the underlying factors that point to growth in the future – a population whose number and prosperity are growing, a proven commitment to economic reforms that improve competitiveness and a supportive policy environment – still persist.

Since steel is the backbone for construction, automotive and even the renewable sectors, decarbonising the industry is key to bringing down emissions. India can help ensure its steel industry is on track for a sustainable future that helps India to meet its net zero targets by reducing the steel public procurement targets by 30-50% under the IDDI.

Anirban Ghosh, Chief Sustainability Officer, Mahindra Group said, “A pathway for steel decarbonisation needs to be secured if we are to meet Net Zero targets. For the auto industry, green steel can be catalytic in creating zero carbon mobility solutions for India. We welcome the Indian Government’s commitment to creating a Net Zero future and are confident that India’s leadership at the CEM-IDDI will help us honour the commitment.”

Globally trade regulations such as the European Union’s Carbon Border Adjustment Mechanism (CBAM) will make less green steel more expensive in the European market.

Similarly, President Biden’s Buy Clean Task Force will ensure green steel is more competitive in the US market and consequently making Indian steel less competitive.

“While there is the challenge in terms of technological feasibility and solutions to decarbonize the sector, which the steel companies are also aware about, Indian steel companies should start working together and share best practices. This will enable the industry to come up with unified solutions, which is the need of the hour.” added Prarthana Borah, Director, CDP-India.

The CEM is a high-level global forum to promote policies and programs that advance clean energy technology, to share lessons learned, best practices and encourage the transition towards a global clean energy economy. The IDDI is a coalition of governments and other organisations that work to stimulate demand for low carbon industrial materials. Its work includes collaboration to establish ambitious public and private sector procurement targets for low-carbon materials, including steel and cement, setting low carbon standards, and incentivising investment into low-carbon technologies and product development. The Industry Deep Decarbonisation Initiative (IDDI), co-hosted by India with the UK.

The writer of this article is Dr. Seema Javed, a known Environmentalist, Journalist and Communications Expert

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