India's top steelmakers seek federal funds to cut carbon emissions

·2 min read
FILE PHOTO: A worker cuts iron rods outside a workshop at an iron and steel market in an industrial area in New Delhi

By Neha Arora

NEW DELHI (Reuters) - India's top steelmakers have urged the government to provide federal funding and other economic assistance to help them meet targets for cutting carbon emissions, a leading industry body said.

India, the world's third-biggest emitter of greenhouse gases behind China and the United States, has pledged to achieve a net-zero carbon emission target by 2070 and increase the share of renewables in its energy mix to 50% by 2030.

Indian steelmakers want federal subsidies and tax incentives to source new technologies, the Indian Steel Association said in a statement ahead of the country's annual budget on Feb. 1, as they seek to reduce emissions to 2.4 tonnes of CO2/per tonne of crude steel output by 2030 from 2.6 tonnes in 2020.

The association has also urged Prime Minister Narendra Modi's administration to make it mandatory for government-backed construction projects - the top steel consumer - to source a portion of the alloy from low-carbon producers.

Steel companies believe that government incentives for low carbon technologies, state funding of green pilot projects and a market for steel made by green technologies would enable a low carbon footprint, T. V. Narendran, chief executive and managing director of Tata Steel Ltd, told Reuters.

Major steelmakers, including AM/NS India - a joint venture between ArcelorMittal and Nippon Steel - said high initial capital costs were needed to cut carbon emissions.

Operating low carbon steel plants would be "considerably expensive in the short to medium term at least", Dilip Oommen, chief executive officer at AM/NS India, said.

"The sector is taking initiatives on its own to reduce its carbon impact, but needs policy and public support to adopt deep decarbonisation technology that is economically viable at the early stage of adoption," said Sajjan Jindal, chairman of the JSW group.

Between January and December, India's crude steel production surged 17.8% to 118.1 million tonnes, an amount second only to China as economies recovered from pandemic-related lockdowns.

(Reporting by Neha Arora; editing by Mayank Bhardwaj, Kirsten Donovan)