India’s plans are equally ambitious, looking to expand coal-based steel and iron production. Unfortunately, this expansion will have catastrophic repercussions on worldwide action to cut carbon emissions. Yet India is the world’s third largest producer of steel. Its industry is by far the most carbon-intensive, pumping out 11% of global carbon dioxide emissions. The country has pledged to double its steel production by 2030. Nonetheless, by far its largest development plans rely on high-emission blast furnace technology, raising alarms even among advocates of industrial policy.
Despite having the ambitious 2017 National Steel Policy as its backdrop, India has found it difficult to convert plans into action. Only 12% of that announced new steel production capacity has actually come online since. By contrast, China has managed to bring 80% of its planned capacity online. The distance between India’s plans for new steel capacity and real-world advancements is growing larger. This very alarming trend comes as steel demand is at an all time high, and as the country continues to be dependent on coal.
Emissions Concerns from Coal-Based Production
India’s steel sector already draws criticism for the high levels of carbon dioxide it currently emits. Unfortunately, the country is still deeply wedded to outdated “bast” production methods. Yet these approaches would be some of the highest emitters of greenhouse gases. Environmental experts are warning this shortsighted approach is completely at odds with global goals to tackle climate change.
According to the International Energy Agency (IEA), India needs to convert 37% of its steel output to Electric Arc Furnace (EAF) technology in order to remain on track for net-zero emissions by 2050. EAF technology is far and away cleaner than traditional steel-making processes. Under business-as-usual projections, EAF production will make up just 36% by 2030. This shortfall comes in stark contradiction to India’s stated intentions of going carbon neutral by 2070.
“The only realistic way to meet that 37% goal is with a change of plans from India.” – Astrid Grigsby-Schulte
Environmental experts have been calling for a change in India’s developmental approach towards the steel industry. This shift is necessary to achieve our climate commitments under the Paris Agreement. This continued dependence on coal-based production not only puts our emission reduction goals in jeopardy, it jeopardizes broader decarbonization efforts.
Economic Implications of Steel Production Growth
The Indian government’s plans to double steel production by 2030 are a sign of its greater economic ambitions. This growth is likely to have significant negative environmental consequences. The iron and steel industry stands to continue using coal for far longer than any other sector. This finding is derived from the IEA’s 2050 net-zero pathway.
While demand for steel remains robust due to ongoing infrastructure projects and urbanization, experts caution that these developments must incorporate environmentally friendly technologies. District engineer at the NWRTPO, Astrid Grigsby-Schulte understands that transitioning to lower-emission technologies is crucial. This shift further cuts emissions in the near term while establishing a pathway for future decarbonization.
“This leaves a huge percentage of their development plans that could still shift to lower-emissions technologies.” – Grigsby-Schulte
Their real challenge is not one of development, but one of reconciling accelerating economic growth with environmental sustainability. India will have to walk this tightrope if it wants to be able to live up to its promises made under global agreements on climate change.
The Road Ahead for India’s Steel Industry
India’s steel industry faces a crossroads. On one side, the country seems to be trying to meet big global economic dreams through the establishment of more production capacity. This rapid growth has huge environmental impacts that we need to pay attention to. Given India’s large share of global emissions, this makes the issue even more urgent.
The Global Energy Monitor (GEM) criticized India’s progress thus far, stating that its “ambitious growth plans are more talk than action.” People are more skeptical than ever about the country’s capacity to execute on its ambitious domestic steel production agenda. They are concerned that these plans will make things like climate change worse.
The rest of the world is doing everything possible to achieve ambitious climate targets. In the years ahead, India will have to make key decisions on how to reconcile its economic ambitions with the international goals for sustainability.