Study Finds Carbon Capture Cheaper for Decarbonizing India's Steel Industry

Economic Times
Economic Times
20h ago
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Carbon capture and reuse is projected as the lowest-cost method to reduce emissions in India's steel sector, requiring $12-14 billion investment over 25 years, cheaper than hydrogen or gas-based alternatives.
Study Finds Carbon Capture Cheaper for Decarbonizing India's Steel Industry
A What happened
India's steel industry heavily relies on blast furnaces emitting nearly 370 million tonnes of CO2 annually. The study advocates CCUS as a decarbonization lever, needing $12-14 billion over 25 years. Early projects require $200 million investment over 5 years, followed by $2.5-3 billion over the next decade. Though production costs may increase by $72-80 per tonne, CCUS remains cheaper than hydrogen-based methods. The government is supporting green steel initiatives including Green Steel Taxonomy and the National Mission on Green Steel.
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Key insights

  • 1

    Structural reliance on coal blast furnaces increases decarbonization challenges: India's steel production is dominated by coal-dependent blast furnaces that emit high CO2 volumes, creating significant technical and financial barriers for direct low-carbon substitutes like hydrogen.

  • 2

    CCUS offers a practical interim pathway enabling emission reductions despite: Carbon capture can be integrated with existing steel plants, allowing emission mitigation without complete overhaul of production methods, which is crucial given India's scale and growth targets in steel.

  • 3

    Capital intensity and staged investments frame policy and business strategies: The need for phased investments, starting with demonstration projects, underscores a transition approach where technology maturity and cost declines over time will influence adoption pace and policy incentives.

Takeaways

Carbon capture and storage emerges as a financially viable decarbonization pathway for India’s steel industry, aligning with national climate goals while acknowledging the technological and investment challenges ahead.

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Climate & Environment Climate World & Politics Policy & Regulation Business & Markets Energy & Commodities