Green steel will play an important role in reshaping the future of the steel industry as the world moves towards a low-carbon economy, according to the Economic Survey for 2023-24. The concept of green steel promotes the production of steel using green energy sources and minimizing the usage of fossil fuels.

"As the world moves towards a low-carbon economy, green steel is poised to play a pivotal role in reshaping the future of the steel industry," the Survey stated, which was tabled in Parliament.

India's steel sector accounts for 12 percent of the nation's greenhouse gas emissions, with an emission intensity of 2.5 tonnes of CO2 per tonne of crude steel, compared to the global average of 1.9 tonnes. This high emission intensity underscores the need for green steel initiatives.

The Survey also noted that India remained a net importer of steel during the first three quarters of FY24 due to price differentials between international and domestic prices of finished steel. Low international prices reduced profit margins for exports and made imports more affordable, affecting the trade balance in the steel sector.

Additionally, the import dependence on coking coal, an essential raw material for steel production, increased from 56.1 MT in FY23 to 58.1 MT in FY24.

The Survey highlighted that many technologies required for achieving global net zero are commercially unavailable, such as hydrogen-fuelled steel, steel and aluminium production with Carbon Capture, Utilization, and Storage (CCUS).

"There is a need to enhance international cooperation in R&D, especially in the domains of distributed renewable energy, offshore wind, geothermal, tidal energy, biofuels, compressed biogas, green hydrogen, energy storage, electrolysers, and nuclear power, including small modular reactors (SMRs)," the Survey recommended.

The push for green steel and enhanced R&D cooperation is crucial for India's transition to a low-carbon economy and reducing its reliance on imported materials and technologies.