Steel Ministry Highlights Green Transition & Specialty Steel in Year-End 2024 Review

The Ministry of Steel has advanced sustainability, innovation, and quality in 2024. The ₹15,000 crore 'Green Steel Mission' aims to cut carbon emissions, while the ₹27,106 crore PLI scheme boosts specialty steel production and reduces imports.

To ensure high-quality steel, 151 standards were incorporated under the Quality Control Order, promoting consistency and strict import scrutiny. These efforts position India as a global leader in sustainable and high-quality steel manufacturing.

Green Steel Mission

The Government has taken decisive steps to enhance the industry’s environmental sustainability. Ministry of Steel is preparing ‘Green Steel Mission’ with an estimated cost of ₹15000 Crore for helping the Steel Industry to reduce carbon emission and progress towards the Net Zero Target. The Mission includes PLI Scheme for Green Steel, incentives for use of renewable energy and mandates for Government agencies to buy Green Steel. The National Green Hydrogen Mission, spearheaded by the Ministry of New and Renewable Energy, integrates the steel sector into the broader goal of producing and using green hydrogen, contributing to the decarbonisation of steel production. In this regard, a Report on 'Greening the Steel Sector in India: Roadmap and Action Plan' on the basis of the recommendations of 14 Task Forces constituted by Ministry of Steel on various key levers of decarbonisation of steel sector, was released on 10.09.2024. Further, the Taxonomy of Green Steel for India was released on 12.12.2024. In this the Green Steel and Green star rating of the steel have been defined. The Steel Scrap Recycling Policy further complements these efforts by increasing the availability of domestically generated scrap, thus promoting resource efficiency.

The Ministry has released the Taxonomy for Green Steel on 12th December, 2024 to provide standards for defining and categorizing the low emission steel, facilitating the green transition of the steel industry. It provides a framework for production of green steel, creation of market for green steel and seeking financial support.

Ministry of New and Renewable Energy (MNRE) has launched National Green Hydrogen Mission for green hydrogen production and usage. The steel sector is also a stakeholder in the Mission and has been allocated budgetary support of Rs. 455 crores for implementation of pilot projects in iron & steel sector under the Mission up to Financial Year 2029-30. Under this mission, Ministry of Steel has awarded two Pilot Projects to produce Direct Reduced Iron (DRI) using 100 % Hydrogen in vertical shaft and one Pilot Project to use of hydrogen in existing Blast Furnace to reduce coal/ coke consumption on 19.10.2024. Pilot Projects for injection of Green Hydrogen in existing vertical shaft based DRI making unit to partially substitute the natural gas are also being explored.

Specialty Steel - Production Linked Incentive (PLI)

To boost domestic steel manufacturing of 'Specialty Steel', a key initiative is Production-Linked Incentive (PLI) Scheme, aimed at attracting capital investments and reducing imports. Participating companies have committed to an investment of ₹27,106 crore, direct employment of 14,760 and estimated production of 7.90 million tonnes of 'Specialty Steel' identified in the scheme. As of October 2024, companies have already invested ₹17,581 crore and generated over 8,660 in employment.

Capacity Expansion

Steel is a de-regulated sector. The Government acts as a facilitator, by creating a conducive policy environment for the development of steel sector across all states in the country, including Maharashtra. However, India is self-sufficient in most grades of steel, with imports contributing a very small percentage of the country’s steel production. Government as a facilitator has taken the following measures to create a conducive policy environment for increasing production and consumption of steel in the country: -

1. Implementation of Domestically Manufactured Iron & Steel Products (DMI&SP) policy for promoting ‘Make in India’ steel for Government procurement.
2. Reduction in the Basic Customs Duty (BCD) on Ferro Nickel, a raw material from 2.5 percent to zero, making it duty free and extension of duty exemption on ferrous scrap upto 31st March 2026, in the Budget 2024. Ferro-Nickel is an important raw material for stainless steel production. Reduction of BCD on Ferro-Nickel will help the domestic stainless steel industry, who are forced to import Ferro-Nickel due to its non-availability in the country. Scrap recycling facilitates decarbonization of steel sector. India’s domestic availability of scrap is limited because of low consumption of steel in the past. Continuation of zero BCD on ferrous scrap would also make steel-producing units, particularly in the secondary sector, more competitive.
3. Publishing 16 safety guidelines for the Iron and Steel Sector on 25.07.2024. These cover both process and workplace based safety. These shall minimize accidents and improve productivity by workplace safety. Safety trainings are being conducted for both the employees and the contractors to disseminate & adoption of these guidelines in the steel plants. The adoption of these guidelines will improve the safety ecosystem, minimize accidents and improve overall productivity of the of the workplace in the steel plants.
4. Steel Import Monitoring System (SIMS) 2.0 revamping for more effective monitoring of imports to address the concerns of domestic steel industry. The data submitted by importers on the SIMS portal is compiled and published on the Ministry of Steel website on fortnightly basis. SIMS has been revamped with the launch of new SIMS portal with effect from 25.07.2024 for more effective monitoring of imports. Revamped SIMS would provide more detailed information regarding Standards and Grades of Steel being imported. It will facilitate in taking appropriate policy measures to address the concerns of domestic steel industry due to any surge in import of steel. Ministry is also in the process of integrating SIMS with ICEGATE portal of CBIC. Impact of new SIMS portal can be analysed after a period of one year or so.

Raw Material Security

There is sufficient reserve of iron ore and non-coking coal in the country to meet the current demand/consumption by domestic steel industry. However, the coking coal is imported as the supply of high-quality coal/ coking coal (low-ash coal) in the country is limited as compared to the demand which is primarily used by Integrated Steel Producers. Steel CPSEs has been procuring coking coal from a diversified group of countries mainly Australia, United States, Russia, Indonesia, Mozambique etc.

Since, most of the coking coal produced domestically in the country had a very high ash content making it redundant in the manufacture of steel, it has led to the import of 51.20 MMT (Million Metric Tonne) in 2020-21, 57.16 MMT in 2021-22, 56.05 MMT in 2022-23, 58.12 MMT in 2023-24 coking coal and 30.19 MMT in 2024-25 for the period Apr’24 - Sep’24. Major portion of this import is from Australia.

Further, A MoU was signed on 14.10.2021 between the Ministry of Steel, Government of India, and the Ministry of Energy, Russian Federation, on cooperation in coking coal used in steel making. The import of coking coal from Russia has been 1.506 MMT in FY 2021-22, 4.481 MMT in FY 2022-23, 5.256 MMT in FY 2023-24 and approx 4.034 MT in FY 2024-25(till Sep’24). In FY 2024-25 (till October’24), SAIL's total import of coking coal from Russia is approx. 545,000 MT while NSL has imported about 78,520 MT.

Additionally, a delegation visited Mongolia in September-October 2024 to explore the possibilities and viabilities for import of coking coal for the Indian Steel sector.

International Strategy

The development of a global strategy for India's steel sector is crucial for enhancing its competitiveness and sustainability in the international market. Fostering partnerships with global players and participating in international forums can help India align its standards with global best practices. A comprehensive global strategy will position India as a leader in the steel industry, capable of meeting domestic needs while also becoming a significant exporter Accordingly, a Working Group has been formed to formulate India's Steel Global Outlook Strategy with focus on the four strategic areas for collaboration viz. Raw Materials, Investments, Technologies, and Steel Exports. After extensive consultations with the stakeholders, a Strategy Paper will be formulated identifying focused areas of cooperation and action plan for priority countries.

Ensuring the Quality of Steel through Standardization and Quality Control Order

Measures have been taken to formulate standards, for the steel consumed in the country and incorporating them in the quality control order (QCO). Standardization involves establishing uniform specifications, testing methods, and manufacturing processes for steel production. This ensures consistency in the quality of steel across different manufacturers. Such steel is required to adhere the standard defined by BIS and domestic as well as foreign manufacturers, are required to obtain BIS license for manufacturing. By enforcing QCO, Government enforces supply of only quality product. So far 151 such steel standards formulated by BIS, have been incorporated in the QCO and this exercise is continuing towards the goal of formulating standards for all the steel consumed in the country. The import of steel consignment is also subjected to scrutiny to check supply of any substandard steel consignment. The relevant portal (TCQCO) through which the applications of the imported steel consignments are examined, has been merged with SIMS 2.0 Portal which will be integrated with Custom’s ICEGATE under the SWIFT 2.0 initiative. Additionally, the new merged portal would be providing NOC only in advance for six months requirement of the importers and individual consignment against the NOC will be cleared by the system.