According to a survey by credit rating agency Crisil, domestic steel makers in India are on track to reach a key milestone in terms of carbon footprint reduction. The analysis, published on March 26, estimates that these companies will meet the global average for carbon emissions in steel manufacturing by 2030.
This objective relates to emissions of less than 2 tonnes of CO2 per tonne of crude steel (tCO2/TCS). As of the previous fiscal year, Indian steelmakers had already cut emissions to 2.35 tCO2/tcs, down from more than 3 tCO2/tcs in 2005. This reflects a 65% reduction towards their desired aim.
Lowering emissions has various benefits for steel plants. It will strengthen their environmental credentials and provide access to new funding opportunities. Crisil emphasises the possibility of accessing “sustainable finance” with lower interest rates and longer loan terms when the ESG profile improves. This is especially significant given the estimated annual capital expenditure of Rs 55,000-60,000 crore (US$ 6.8 – 7.4 billion) between 2024 and 2027.
According to Crisil, lower carbon emissions will boost Indian steel’s competitiveness in the export market. As global environmental worries grow, abiding by international emission regulations becomes critical for competitiveness.
Nevertheless, to meet the 2030 target, a more aggressive annual decrease rate of 2.3% is required. According to the paper, increasing renewable energy sources, expanding scrap-based electric arc furnace (EAF) capacity, and implementing carbon capture technologies can help reach this goal.
Source: ESG TImes
