India's Path to Leading the Global Green Steel Revolution

Green Steel
Production
Pathways for India
October 2024
PAGE 1
Green Steel Production Pathways for India

CREDITS
Copyright © WWF India. Published by WWF-India.
Reproduction in full or part of this publication is authorized, provided source is
acknowledged and the title and the publisher as the copyright owner is
mentioned.
Acknowledgements
Date of Publication
October 2024
Authors
EY Parthenon: Kapil Bansal, Reshma Narayanankutty, Swapnil Kaushik
WWF India: Vishal Dev, Vishal Sukhija, Kalyan Verma
Reviewed by
Mr Bernt Nordman, Head of Climate Program, WWF Finland
Acknowledgement
The transition towards Green Steel has become one of the major topics in the
Steel Industry. The whitepaper “Green Steel Production Pathways for India” has
been prepared by Ernst & Young (EY)-Parthenon in collaboration with WWF-
India. Mr Bernt Nordman, Head of Climate Program of WWF Finland, is an
advisor to the project. We are grateful to the India Green Steel Coalition (IGSC)
steering committee members for their inputs. We are extremely thankful to all
stakeholders who supported the development of this whitepaper, and for
providing valuable feedback that helped shape the contents and finalize the
recommendations. Finally, we would like to thank all the members of the team
who were involved in the development process at various stages of the
initiative. The report is produced under a project funded by WWF Finland. The
report does not necessarily reflect the views of the funder.
Disclaimer
This report has been prepared by WWF-India with research and inputs from EY
Parthenon, based on publicly available information and data gathered from
different sources. WWF-India and EY Parthenon disclaim any and all liability for
the use that may be made of the information contained in this report. While the
experts and organizations listed in the acknowledgements and appendix have
provided inputs for the development of this report, their participation does not
necessarily imply endorsement of the report’s contents or conclusions. The
tables and charts in the report are based on the available data accessed from
various reliable sources. The sources have been duly recognized in the report.
Further, the views in the document do not necessarily reflect those of WWF-
India or EY Parthenon.
PAGE 2

Table of
Contents
6 Executive summary
8 Steel sector: global and Indian outlook
12 Indian steel sector: BF-BOF on rise
18 What is green steel?
22 Cost of green steel
28 Production pathways of green steel
32 Select H2 DRI case studies
36 Recommendations
PAGE 3

List of Figures
Figure 1: Global crude steel production (million tons) over the years
Figure 2: Country wise crude steel production (million tons) in 2023
Figure 3: Split of steelmaking routes in 2023
Figure 4: India's crude steel production v/s installed capacity (million tons)
Figure 5: India's finished steel production v/s finished steel consumption
Figure 6: Steel production routes in India
Figure 7: Announced capacity of steelmaking projects by year 2032 (million tons)
Figure 8: BaU emissions from Indian BF-BOF projects in pipeline by 2032
Figure 9: SBTi aligned roadmap for 15 MMTPA BF-BOF player expanding with 5 MMTPA green steel pathways
Figure 10: Emission intensity reduction with decarb levers and green steel technology integration
Figure 11: Cost of abatement v/s carbon price (India) for BF-BOF
Figure 12: Emission intensity and cost of steel production pathways (FY24)
Figure 13: Emission intensity and cost of steel production pathways in FY30
Figure 15: Green hydrogen-DRI based green steel production pathway
Figure 16: Scrap based electric arc furnace powered with renewables for green steel production
PAGE 4

List of Common Abbreviations
BaU EAF
Business as Usual Electric Arc Furnace
BF FeMn
Blast Furnace Ferromanganese
BOF FeSi
Basic Oxygen Furnace Ferrosilicon
CCUS MMTPA
Carbon Capture, Utilization, and Storage Million metric tons per annum
DRI RE
Direct Reduced Iron Renewable Energy
PAGE 5

01 Executive summary
PAGE 6

The steel industry has been a cornerstone of economic MMTPA production, the emission intensity potentially
development, with global production rising steadily due fall from 2.33 tCO2/tsteel in FY24 to 0.22 tCO2/tsteel
to industrialization and infrastructure growth. Despite by FY50. This highlights the possibility of continued
a temporary plateau during the post-pandemic brownfield BF-BOF decarbonized operations while also
economic recovery, with a slight decline in demand in adapting green steel technologies as greenfield
2022 and 2023, the sector is poised for a resurgence. initiatives. This transition aligns with the Science Based
The World Steel Association predicts a robust increase Targets initiative's 1.5ºC Iron & Steel guidance.
in demand by 2024, particularly in India, where an 8%
growth is expected over two years. China's dominance The concept of green steel lacks a single definition,
as the top producer and exporter is complemented by with various industry standards and initiatives setting
India's strong position as the second-largest steel different emissions targets and focusing on distinct
producer. The traditional BF-BOF route, dependent on aspects of production. Key standards suggest
virgin iron and coking coal, remains the most carbon- emissions intensity targets ranging from 0.05 to 0.4
intensive and widely used method, representing 71% of tons of CO2 per ton of steel.
global steel production. In contrast, the EAF process, Industry standards indicate that green steel can be
which utilizes steel scrap, presents a more sustainable produced with near-zero emissions using Green
alternative with a lower carbon footprint. The EAF's Hydrogen in Direct Reduced Iron (DRI) for primary
share is set to grow, driven by its flexibility, the steel production and scrap in Electric Arc Furnaces (EAF) for
industry's net-zero ambitions, the falling costs of secondary production. These methods significantly
renewable energy, and tightening environmental reduce emission intensity compared to traditional
regulations. steelmaking. Our analysis shows how the Natural Gas-
India's steel production has been growing robustly, based DRI, BF-BOF with Carbon Capture, and Scrap-
fueled by swift economic growth, government based EAF cut emissions by 41%, 50%, and 71%,
incentives for domestic manufacturing, and rapid respectively, due to cleaner combustion, CO2 capture,
urbanization. The Ministry of Steel's ambitious targets and the use of recycled materials. Renewable-powered
under the National Steel Policy aim for a capacity of EAFs and Green Hydrogen DRI processes can achieve
300 MTPA and a production level of 255 MTPA by up to 88% and 97% lower emissions, respectively.
2030. The BF-BOF method accounts for ~43% of India's Under the projected Indian carbon pricing scenario, the
steel output, with Induction Furnace and Electric Arc production cost of green steel using the hydrogen-
Furnace contributing ~35% and ~22%, respectively. The based direct reduced iron (H2-DRI) method is expected
majority of secondary steelmakers use coal-based DRI to be $441 per ton of steel by FY35. This represents a
as the primary raw material, leading to significant CO2 24% cost reduction compared to the $581 per ton of
emissions. India's status as the top DRI producer, with steel produced via the traditional blast furnace-basic
a substantial portion derived from coal, underscores oxygen furnace (BF-BOF) route.
the need for a shift towards greener practices. Adopting green steel production technologies is in line
With the steel sector at a pivotal point, the urgency to with worldwide environmental objectives and provides
reduce emissions is met with the high costs of adopting Indian steelmakers with a competitive edge in a market
low-carbon technologies. India plans to maintain the that is progressively prioritizing sustainability. This
BF-BOF route as the mainstay of production, which will shift not only invites fresh investment and innovation
result in a dramatic increase in CO2e emissions. The in the sector but also prepares Indian manufacturers to
expansion of steelmaking capacity through the BF-BOF take advantage of international trade policies that are
route amplifies the need for decarbonization to increasingly biased towards low-carbon products.
mitigate the risks of market contraction and Indian steelmakers who actively minimize their
competitive disadvantages in environmentally emissions could enjoy favored entry into select
conscious markets. markets. Additionally, the successful implementation
of green steel methods will require the establishment
In the report, we performed an analysis of a steel of conducive policies, the enhancement of
company with a 15 MMTPA steel production using the infrastructure, and the upskilling of the workforce to
BF-BOF method. The analysis showcases how facilitate a seamless transition to these eco-friendly
renewable electricity, green hydrogen injection in blast technologies.
furnace, and Carbon Capture can significantly reduce
emissions in BF-BOF. Going forward, when the
company decides to expand the production levels
through green steel production pathway to reach 20
PAGE 7

02 Steel sector:
global and Indian outlook
PAGE 8

The global steel production has witnessed a steady rise anticipated to resurgent in 2024, and continue to grow
over the past few decades, driven by rapid in 2025. This projection is primarily ascribed to India,
industrialization, urbanization, and infrastructure where demand is expected to surge by 8% over the
development in emerging economies. The crude steel next two years. 1 China continues to dominate the
production faced a stagnation period during post- sector as the world’s largest producer and exporter of
pandemic economic recovery, following continuous steel, whereas India has maintained its position of the
decline in demand in 2022 and 2023. However, as per 2nd largest steel producer.
World Steel Association, the global demand is
Figure 1: Global crude steel production (million tons) over the years
1963
1885 1890 1892
1627
1435
1148
2005 2010 2015 2020 2021 2022 2023

Source: World Steel Association, World Steel in Figures 2024
Figure 2: Country wise crude steel production (million tons) in 2023
China 1019
India 141
Japan 87
USA 81
Russia 76
South Korea 67
Germany 35
Turkey 34
Brazil 32
Iran 31
Others 289
1
World Steel Association, April 2024, worldsteel Short Range
PAGE 9
Outlook

The highly carbon intensive Blast Furnace – Basic EAF route may evolve in times to come driven by
Oxygen Furnace (BF-BOF) is the traditional route, factors such as:
which relies on virgin source of Iron and coking coal,
has the highest rated installed capacity in terms of ► Flexibility in terms of utilizing diverse raw
materials like Scrap, Direct Reduced Iron (DRI)
steel production. On the other hand, the Electric Arc
Furnace (EAF) process, which primarily uses steel ► Realizing steelmaker’s net zero ambitions
scrap as feedstock, offers lower carbon footprint. In
2023, around 71% of the global steel production was ► Declining costs of renewable energy
via BF-BOF route, complemented by 28% of steel ► Environmental regulations & mandates
production from EAF route. The relative share of the
.
Figure 3: Split of steelmaking routes in 2023
0.30%
28.60%
BF-BOF
EAF
Other
71.10%
While the global crude steel production output rise in demand, the Ministry of Steel has established a
remained flat, with a mere 0.1% rise in crude steel lofty goal within the framework of the National Steel
production levels in 2023 compared to 2022, India’s Policy (NSP) to achieve a capacity of 300 million tons
production levels have ramped up significantly in per annum and a production level of 255 MTPA by the
recent years. India’s swift economic growth, along with year 2030. 3 Over the previous four years, India has
government’s incentives for domestic manufacturing, experienced a substantial increase of approximately
investments in infrastructure and rapid urbanization 45% in the consumption of finished steel, highlighting a
are the key drivers bolstering the production to meet significant uptick in the country's internal demand for
the required demand. 2 In response to the anticipated this material.
PAGE 10
2
Joint Plant Committee, August 2024, Indian Steel Industry – 3
Ministry of Steel, India, May 2017, National Steel Policy
A Trend Report

Figure 4: India's crude steel production v/s installed capacity (million tons)
154.062 161.299
143.914 179.515
144.299
127.197
120.293
103.545
FY21 FY22 FY23 FY24
Crude Steel Production Installed Capacity
Source: Ministry of Steel, Annual Report 2023-24
Figure 5: India's finished steel production v/s finished steel consumption

139.153
113.597 123.196
96.204
136.291
119.893
105.752
94.891
FY21 FY22 FY23 FY24
Finished Steel Consumption Finished Steel Production
In India's steel production landscape, the

Figure 6: Steel production routes in India
predominant pathway is the BF-BOF method,
accounting for ~43% of the steel output.
Meanwhile, ~35% of steel production is derived
from Induction Furnaces (IF), and another ~22%
from EAF. While few steelmakers utilize steel
scrap as the main raw material in IFs & EAFs, in
the majority case, Direct Reduced Iron (DRI) 35.4% Basic Oxygen
produced via coal based rotary kilns is utilized as 42.7% Furnace
the primary raw material. Like the BF-BOF Electric Arc

process, coal based DRI-EAF / DRI-IF steelmaking Furnace
is associated with high levels of CO2 emissions. Induction
Furnace
Notably, India continued to maintain its position as
the top DRI producer in the world, with 49.3 21.9%
million tons production in 2023, of which
prodigious 39.9 million tons came from coal based
DRI. 4
PAGE 11
4
Midrex, September 2024, 2023 World Direct Reduction Statistics

03 Indian steel sector:
BF-BOF on rise
PAGE 12

As the industry stands at a critical juncture with a dual the processes. Additionally, there are further ventures
challenge of urgent need of reducing the emission in the development stages without a set
footprint, and high investment costs of low carbon commissioning date, poised to introduce roughly 56
technologies, India’s steel sector plans to keep BF-BOF million tons of BF-BOF capacity. 5 This trend raises
route as the main production pathway. concerns, considering that the average lifespan of a
Blast Furnace, including the time for relining, is 50
By the year 2032, it is anticipated that there will be an years 6, indicating that these installations will have a
increase of at least 118 million tons in BF-BOF long-term presence in India, along with recently
capacity, accompanied by an additional 24 million developed facilities.
tons of steel produced through EAF and IF. It is crucial
to note that the EAF/IF projects in pipeline is expected
to utilize coal-based DRI as their primary feedstock.
Only a minority of EAF projects shall adopt Scrap in
Figure 7: Announced capacity of steelmaking projects by year 2032 (million tons)
Source: Global Energy Monitor’s Global Steel Plant Tracker (v1) release & EY Parthenon analysis
India is expected to have a minimum installed capacity of commissioning. Under typical operational scenarios
of 190 million tons for BF-BOF steel production by for BF-BOF steel production, the CO2e emissions are
2032. Aforementioned, the figure excludes any BF- projected to surge to over 2.5 times the current levels
BOF projects that have yet to have a confirmed date of emissions.
Figure 8: BaU emissions from Indian BF-BOF projects in pipeline by 2032
Source: Global Energy Monitor’s Global Steel Plant Tracker (v1) release & EY Parthenon analysis
5
Global Energy Monitor, April 2024, Global Steel Plant 6
Institute for Energy Economics and Financial Analysis,
PAGE 13
Tracker (v1) release February 2024, India’s technology path key to global steel
decarbonisation

While the steelmaking capacity of India expands four decarbonization ideas viz. Renewable Electricity,
through BF-BOF route, the imperative to decarbonize Energy Efficiency, Green Hydrogen Injection in Blast
the operations becomes critical. The consequences Furnace, and Carbon Capture (Cradle-to-gate,
are not limited only to increased GHG emissions, but including pipeline transport; for all the analysis in the
there is a tangible risk of market contraction in whitepaper) for decarbonizing the existing operations
countries & regions with stringent environmental and within the brownfield setup. Additionally, we proposed
regulatory norms. Additionally, there is pressure from the introduction of a 2 MMTPA scrap-based electric
clients focusing on sustainable supply chain, which arc furnace operating with renewable electricity and a
could result in competitive disadvantages for Indian 3 MMTPA green hydrogen-based DRI-EAF operation as
producers. technological advancements for producing green
steel. This strategic analysis illustrates how the
To address these challenges, we performed an company's existing 15 MMTPA BF-BOF infrastructure
analysis for a steel company with an annual can operate concurrently with the adoption of new
production capacity of 15 million metric tons per technologies for 5 MMTPA of green steel production.
annum (MMTPA) using the BF-BOF method. Our The approach is designed to align with the Science
analysis hypothesized that the company aims to Based Targets initiative (SBTi) guidance for Iron &
increase its capacity from the current 15 MMTPA to Steel sector.
20 MMTPA between FY34 and FY36. We identified
Figure 9: SBTi aligned roadmap for 15 MMTPA BF-BOF player expanding with 5 MMTPA green steel pathways
Source: EY Parthenon analysis

PAGE 14

To reduce carbon emissions from current BF-BOF FY33, relative to the FY24 benchmark. This
processes, the company may plan to implement substantial reduction will be the cumulative effect of
energy efficiency strategies such as Waste Heat all the decarbonization measures implemented and
Recovery, Variable Frequency Drives (VFDs), the full-scale carbon capture.
Enhanced Sinter Burner Efficiency, Energy Monitoring
Systems starting in FY25. Additionally, in the same For the expansion projects, the company may consider
fiscal year, the company may fulfill 90% of its investing in a 2 MMTPA scrap-based electric arc
electricity needs through group captive renewable furnace powered by renewable energy and a 3 MMTPA
energy sources. By FY27, the company may explore green hydrogen-based DRI facility in FY35 and FY40,
carbon capture at pilot level, and by FY28, it can respectively. The total capital expenditure for these
introduce green hydrogen injection into the blast greenfield projects is estimated at INR41,500 crore.
furnace. These initiatives are expected to result in a These technologies are also the route for the
31% reduction in emissions from the FY24 levels by production of green steel.
FY30, with an estimated capital expenditure of
INR4,800 crore. By integrating decarbonization efforts in existing BF-
BOF operations and adopting new technologies in
A subsequent investment of approximately INR17,500 greenfield expansions, the company would be on track
crore in FY30 for full scale carbon capture technology to achieve a 90% reduction in Scope 1 and 2 emissions
is projected to further decrease emissions by 74% by by FY50, in comparison to the FY24 baseline.
Figure 10: Emission intensity reduction with decarb levers and green steel technologies integration

PAGE 15

Our analysis reveals the significant potential of in India are expected to start reaping the benefits of
renewable electricity, energy efficiency measures, their investment in decarbonization technologiesThis
green H2 injection in BF, and carbon capture to move is expected to be economically motivated
reduce CO2e emissions by up to 74% from BF-BOF as carbon prices are projected to exceed the
operations. Energy efficiency measures include Waste costs of abating CO2. The same decarbonization
Heat Recovery, VFDs, Improved Sinter Burner levers previously mentioned were considered in
Efficiency, Energy Monitoring System etc. As the plant this analysis and upcoming carbon prices for
undergoes expansion and progressively integrates India are projected based on evolution of carbon
Green Steel technologies, we observe a substantial prices in other regions.
decrease in scope 1 and 2 emission intensity.
By abating CO2 emissions at a cost lower than the
Specifically, the emission intensity is projected to drop
carbon price, BF-BOF steelmakers may realize
from 2.33 tCO2/tsteel in FY24 to just 0.22
significant cost savings by overcoming the higher
tCO2/tsteel by FY50. This highlights the critical
expenses tied to carbon taxation or the need to
impact and necessity of not only pursuing
purchase emissions allowances.
decarbonization strategies but also embracing the
pathway of Green Steel technologies, which we will Moreover, this strategy provides a solid foundation for
define in a subsequent section of this paper. Green the continued operation of the newly established BF-
steel definition and its pathways are defined in the BOF facilities. These decarbonization levers will play a
subsequent sections of this paper. crucial role during the transition period before the full
adoption of green steel technologies becomes feasible
Further, with reference to Figure 11, our assessment and widespread.
indicates between 2029-2031, BF-BOF steel producers
Figure 11: Cost of abatement v/s carbon price (India) for BF-BOF
PAGE 16

The evaluation presents two scenarios forecasting the Key notes for the analysis:
future costs of decarbonization in relation to carbon
pricing in India and potential exports to Europe. ► Levers considered: Energy Efficiency, Renewable
Energy, Green Hydrogen injection in BF, and
In Scenario 1, it is projected that by the year 2031, Carbon Capture
the cost of decarbonization will drop below $64 per ► Indian carbon prices are projected based on
ton of CO2. Concurrently, carbon prices in India are evolution of carbon prices in other regions
expected to rise above $64 per ton of CO2.
As highlighted earlier, carbon capture is crucial for
Scenario 2 predicts that by 2029, the cost of
decarbonization will remain above $60 per ton of decarbonizing BF-BOF operations. While carbon
capture offers solutions for reducing emissions,
CO2, while carbon prices will be lower than $60 per
several aspects of its deployment suggest a thoughtful
ton of CO2. This scenario takes into account an
stance and raises ambiguity. The absence of a
effective carbon price that combines the European
dedicated carbon capture utilization and storage
Union Emissions Trading System (EU ETS) and Indian
policy in India creates a regulatory uncertainty and
carbon prices, based on a steady export volume of 5
potential investment risks. Moreover, the definite CO2
million metric tons per annum (MMTPA) of finished
storage capacity in India is yet to be assessed along
steel to Europe.
with downstream utilization market. While few pilot
The decreasing trend in decarbonization costs in both scale projects exist in India, the necessary
scenarios is attributed to a significant reduction in the infrastructure, including assessment of definite CO2
expenses associated with CO2 capture and the storage capacity is to be analyzed for full scale
declining cost of green hydrogen. Moreover, in projects. Even if the conventional route of
Scenario 2, the decarbonization costs are anticipated steelmaking deploys the identified levers, the
to be even lower than in Scenario 1, reflecting the dependence on coal as fuel will persist. As the global
potential for further cost reductions as the relevant peers of Indian steel manufacturers are increasing
technologies advance and scale up. their efforts to carb the emissions, Indian players may
focus on transitioning from ‘Carbon Direct Use’ to
‘Carbon Direct Avoidance’.
PAGE 17

04 What is green steel?
PAGE 18

One particular definition of green steel does not exist. emissions accounting and reporting, such as GHG
There are increasing number of standards, protocols, Protocols, ISO Standards, and The World Steel
initiatives, and government policies, each focusing on Association.
different components of the industry. These measures
can be categorized based on their focus on steel The diversity of the steel industry's global operations
manufacturers, the demand side, or the finance and makes a single universal standard impractical. A more
funding aspects. 7 realistic approach might be to develop a few high-
quality, mutually aligned standards and protocols.
The definition of green steel requires the definition of Harmonization could concentrate on emissions
system boundaries, which varies from standard to accounting boundaries, the types of GHGs included,
standard. For near-zero steel production, emissions and the criteria for zero-emission or near-zero-
intensity targets are defined by ResponsibleSteel and emission steel. Integrating the perspectives of major
the IEA as ranging from 0.05 to 0.4 tons of CO2 per steel-producing emerging economies, especially China
ton of steel, contingent on the scrap ratio used., and India, into these decarbonization standards is
Demand-side initiatives like IDDI, the First Movers critical. Effective communication and coordination
Coalition, and SteelZero share this definition but set among these standards and protocols are imperative to
varying targets for steel procurement. Other initiatives streamline requirements and alleviate the industry's
specify time-bound emissions reduction goals, while compliance burden, thereby supporting the shift
some are dedicated to establishing frameworks for towards reduced emissions.
Standards and Key players

Description
initiatives 8 (non-exhaustive)
► Sets emission intensity target based on scrap usage across 4 bands

for 100 to 0% scrap usage:
► Level 1 – 0.50 to 2.8 tCO2/tcs
► Level 1 is termed as Basic Threshold, whereas level 4 is Near Zero
► The Science Based Targets Initiative (SBTi) developed the Steel

Science-Based Target-Setting Guidance to help steel companies set
climate targets that align with the Paris Agreement's 1.5°C goal
► Sets emission intensity target based on scrap usage across between

0.05 (at 100% scrap usage) to 0.4 tCO2/tcs (at 0% scrap usage)
► It is envisaged that these targets shall be accomplished basis
advanced green technologies like H2 DRI, CCUS, Electrowinning etc.
► Emission intensity reduction in BF operations by 20%, if baseline is

more or equal to 2 tCO2 per ton steel; 15% reduction if baseline less
than 2 tCO2 per ton of steel
► Emission intensity target reduction by 20% & 40% for fossil gas
based & coal based DRI respectively
7
Ali Hasanbeigi and Adam Sibal, January 2023, What is Green 8
Standards and initiatives, Description, and Key players are
PAGE 19
Steel? Definition and Scopes from Standards, Initiatives, and publicly available information
Policies around the world

Apart from various standards, protocols, and commitment to environmental responsibility and
initiatives, companies are developing their own green attract customers seeking sustainable products.
steel definition and issuing corresponding certificates. However, the proliferation of different green steel
Generally, these definitions focus on specific aspects definitions and certifications can create confusion
of the steel production process, such as reduced amongst the buyers of green steel. To address this
carbon emissions, energy efficiency, or the use of issue, corporates have assigned auditing protocols to
renewable energy sources. The certificates serve as a verify their own claims of green or low carbon steel.
valuable tool for companies to showcase their
Companies 9 Certificates Description
► XCarb green steel certificates are issued by company’s

operation in Europe – Flat Products based on audit by Det
Norske Veritas (DNV) on CO2 savings
► Two distinguished certificates are provided based on
processes used: BF-BOF with reduced coal, and scrap
based EAF with 100% renewable electricity
► Carbon Lite solution offers a 30% reduction in CO2e
intensity compared to the Tata Steel Nederland baseline
Jan 2018
► Carbon Savings are independently assured by Det Norske
Veritas (DNV)
► bluemint® recycled offers 0.75 tCO2e per ton of hot
strip compared to 2.1 tCO2e per ton of conventional hot
strip
► Follows DIN EN ISO/IEC 17029 and TUV SÜD VERIsteel
Standard for bluemint® steel production
► This lower emissions product is certified by TÜV SÜD
► Offers two unique certificates under KALYANI
FeRRESTA™, and KALYANI FeRRESTA™ PLUS
► KALYANI FeRRESTA™ has an emission intensity of less
than 0.19 tCO2e per ton of crude steel or less than 0.35
tCO2e per ton of rolled steel
► KALYANI FeRRESTA™ PLUS offers net zero GHG
emission intensity for both, crude & rolled steel.
► Both the certificates use GHG Protocol ISO 14404-
2:2013 and ISO 14064-1 (2018)
► Certificates are jointly issued by DNV Business Assurance
India Private Limited and Saarloha
► Follows mass-balance approach in accordance with Japan
Iron and Steel Federation guidelines to reduce GHG
emissions of diverse product portfolio
► Nippon Kaiji Kyokai assessed JFE’s claims of GHG
reductions and carbon footprint of JGreeX™ products
Focusing on the development and commercialization of low carbon emission steel products, rather than solely
pursuing broad corporate-level decarbonization strategies, may be crucial for securing premium pricing during the
transition phase. This product-centric approach allows for differentiation in the market, where the industries are
increasingly willing to pay a premium for materials that contribute to their own sustainability goals. By positioning low
carbon emission steel as a distinct, value-added product, companies can capture a competitive edge and drive
industry-wide change, encouraging the adoption of greener practices throughout the supply chain.
PAGE 20
9
Companies, Certificates, and Description are publicly available information on company’s respective website

PAGE 21

05 Cost of green steel
PAGE 22

The preceding section threw light on the absence of a emission steel is feasible using Green Hydrogen in
universally accepted benchmark for the carbon Direct Reduced Iron processes for primary steel
emission levels that qualify steel production as production, and through Scrap utilization in Electric
'green.' Ideally, the closer the emissions approach Arc Furnaces powered by renewables for secondary
zero, the greener the steel. For all practical purposes, producers. As these innovative technologies gain
steel production resulting in less than 0.5 tons of traction, it is imperative for Indian steel
CO2e emissions per ton of steel may be considered manufacturers to embark on a journey of
green. Current standards and industry consensus decarbonization by adopting these methods.
suggest that the production of green or near-zero
Figure 12: Emission intensity and cost of steel production pathways (FY24)
The emission intensity of low carbon emissions steel production methods such as Natural Gas-Based Direct Reduced
Iron (DRI), BF-BOF with Carbon Capture and Scrap-Based Electric Arc Furnace (EAF) is significantly lower than that of
the traditional BF-BOF steelmaking route, by 41%, 50%, and 71%, respectively.
PAGE 23

The key factors contributing to these reductions are: 1. The integration of renewable energy into the
Scrap-EAF process minimizes emissions related
1. The use of natural gas in the DRI process offers a to electricity consumption, whether sourced
cleaner combustion alternative to coke, which is from the grid or generated on-site.
the primary fuel in the BF-BOF method.
2. Utilizing green hydrogen as a reducing agent in
2. The implementation of carbon capture the DRI process results in a cleaner reaction,
technology in the BF-BOF process enables the with water vapor being the only byproduct, thus
capture of CO2 emissions from the steelmaking dramatically lowering emissions during the iron
workflow. ore reduction in the shaft furnace.
3. The Scrap-EAF method eliminates the need for The production costs for steel with reduced carbon
coke as a fuel source and leverages recycled emissions are greater compared to the BF-BOF route:
scrap metal, which bypasses the requirement for 13% more for natural gas based DRI, 27% more for BF-
raw iron extraction, resulting in lower emissions BOF with Carbon Capture, and 5% more for scrap-
throughout the production cycle. based electric arc furnace operations. In terms of
environmentally friendly steel production methods,
using an EAF powered by renewable energy sources
Green steel production methods offer a substantial
incurs a 30% cost increase over conventional steel,
decrease in emission intensity. When renewable
while the green hydrogen direct reduced iron (Green
energy sources power a Scrap-Based Electric Arc
H2 DRI) steelmaking route is 54% more expensive.
Furnace, the emission intensity is 82% lower
compared to the conventional Blast Furnace-Basic In fiscal year 2030, this trend is expected to change
Oxygen Furnace (BF-BOF) method. Additionally, the as technologies aimed at reducing emissions, such as
Hydrogen-Based Direct Reduced Iron (H2-DRI) process Carbon Capture and Green Hydrogen, become more
achieves a remarkable 97% reduction in emissions cost-effective and efficient when compared to FY24.
relative to the BF-BOF approach. The underlying Declining decarbonization costs are projected to
reasons for these significant reductions include: reduce H2 DRI EAF production cost by 22% and BF-
BOF with Carbon Capture production cost by 3%.
PAGE 24

Under the carbon price scenario, it is anticipated that the production costs for low carbon steel methods will be
reduced by 1% to 10% compared to traditional steel manufacturing. Conversely, the costs for producing green steel
are expected to be 1% to 6% more than those of standard steel production. Meanwhile, the price of steel produced
through conventional methods is projected to rise by 24% by the fiscal year 2030.
Key notes for the analysis: ► EAF RE emission intensity considered with 50%
renewable energy
► Carbon price in FY30 is projected to be
58.3$/tCO2 ► Effective benchmark emission intensity reduction
for Indian steel sector mirrors that of CBAM in
► Carbon Capture abatement price considered 53
EU
$/tCO2e
► For effective implementation of a CCTS scheme
► RE carbon abatement price considered
in India, grant and phasing out of free allowances
98$/tCO2e translating to 0.07$/kWh
is important
► EAF RE benchmark considered with 90%
PAGE 25
renewable energy

By the fiscal year 2035, the expense of producing carbon steel methods are forecasted to be 5% to 20%
green steel through the hydrogen direct reduction (H2 less than those of traditional steel manufacturing.
DRI) method is expected to decrease significantly, Moreover, the costs for green steel production are
becoming 26% less costly than in FY24 (refer figure projected to be 10% to 24% less than conventional
12), owing to the anticipated reduction in the price of steel methods. This trend suggests that green steel
green hydrogen. In a scenario where carbon pricing is will become increasingly cost-effective in the future.
implemented, the estimated production costs for low

PAGE 26

Key notes for the analysis: As the steel industry moves towards a more
sustainable future, the financial viability of green steel
► Carbon price in FY30 is projected to be
82$/tCO2 production becomes a pivotal factor for widespread
adoption. The projected cost reductions for green
► Carbon Capture abatement price considered steel, as outlined for FY30 & FY35, signal a
45$/tCO2e transformative shift in the economics of steel
manufacturing. This shift is not only driven by the
► RE carbon abatement price considered
decreasing costs of green hydrogen but also by the
98$/tCO2e translating to 0.07$/kWh
implementation of carbon pricing mechanisms that
► EAF RE benchmark considered with 90% incentivize cleaner production methods. The
renewable energy anticipated affordability of green steel positions it as a
compelling alternative to traditional steel, potentially
► EAF RE emission intensity considered with 50%
accelerating the industry's transition towards
renewable energy
environmentally friendly practices.
► Effective benchmark emission intensity reduction
for Indian steel sector mirrors that of CBAM in
EU
► For effective implementation of a CCTS scheme

in India, grant and phasing out of free allowances
is important
PAGE 27

06 Production pathways of green steel
PAGE 28

1. High grade iron ore (Fe > 67%) & lower impurities
Key raw
materials 2. Green Hydrogen as reducing gas in DR Shaft
required
3. Carbon injection and slag forming additives in EAF
The steelmaking process using green hydrogen begins with the electrolysis of water, powered by
renewable electricity, to generate hydrogen. This green hydrogen acts as the reducing gas in the
process. Iron ore pellets are fed from the top of a shaft furnace, while the green hydrogen is
Brief process introduced from the bottom. This process results in the formation of Direct Reduced Iron and
description water vapor as a byproduct. The DRI is then fed into an Electric Arc Furnace for steelmaking. This
step can be done either as cold charging or preferably hot charging of DRI, leading to potential
energy savings and increased productivity during the steelmaking process. The liquid steel
undergoes casting, followed by rolling and other downstream finishing processes.
1. Unavailability of high-grade iron ore can attract additional gangue

2. Increased slag volume in low grade iron ore
3. H₂-DRI based DRI has lower melting efficiency due to absence of carbon content
Key challenges 4. Nitrogen management during steelmaking process
5. High upfront capital costs (40% higher than conventional)
6. GH2 production & use is up to 80%-120% costlier than fossil fuels
7. Water intensive (10 ltr Distilled water for 1 kg hydrogen production)
Key technology
players (non-
exhaustive) 10
Companies
deploying GH2
DRI (non-
exhaustive)
PAGE 29
10
Key technology players and Companies deploying GH2-DRI are publicly available information on respective websites and press
releases

1. Scrap is the primary raw material
Key raw materials
2. Fluxes like Dolomite, Limestone etc.
required
3. Ferroalloys such as FeMn, FeSi etc
The steel production process begins with the formulation of a scrap recipe, which involves
combining various types of scrap materials such as bushelling, shredded scrap, bundles etc.
These materials vary in size and density and are assembled in scrap bucket according to the
specific needs of the process.
Brief process The recipe is then introduced into an electric arc furnace (EAF) for melting. Following the
description charging of the scrap, electric current is passed through electrodes to generate a high-
intensity heat that melts the scrap. The subsequent stage involves refining the molten metal
and forming slag, which is facilitated by the addition of specific additives. To achieve the
desired steel grade, various alloying elements are incorporated. This high-energy process
has the potential to achieve near-zero emissions when integrated with renewable energy
sources, thereby enhancing the sustainability of this secondary steelmaking route.
1. Unavailability of substantial scrap in India and globally

2. Tramp elements like Cu in scrap
Key challenges
3. Scrap based EAF is energy intensive process, and switching to RE would be capital
intensive
Key technology
players
(non-exhaustive) 11
Companies deploying
Scrap-EAF +
renewables
(non – exhaustive)
PAGE 30
11
Key technology players and Companies deploying Scrap-EAF + Renewables are publicly available information on respective
websites and press releases

PAGE 31

07 Select H2 DRI case studies
PAGE 32

Case: HYBRIT collaborative mission by SSAB, LKAB, Vattenfall 12
Summary: with green hydrogen, produced using renewable
energy. This breakthrough technology has the
Advancing towards a value chain free from fossil fuels,
potential to significantly reduce carbon emissions,
from extraction to steel production, by employing
making steel production fossil-free and contributing to
renewable electricity and hydrogen
the global transition towards a more sustainable
Background: economy.
The HYBRIT (Hydrogen Breakthrough Ironmaking Project financials:

Technology) project was initiated in 2016 as a joint
► SSAB, LKAB, and Vattenfall invest a total of SEK
venture between SSAB (steel producer), LKAB (iron 259 million in the hydrogen storage itself
ore supplier), and Vattenfall (electricity producer),
aiming to decarbonize the steel industry. In response ► SSAB is investing €4.5 billion in a new mill that is
to rising climate change concerns and the global push expected to produce 2.5 million tonnes of fossil-
for sustainable industrial processes, HYBRIT seeks to free steel a year by 2029
revolutionize steel manufacturing by replacing coal
Project timelines:
2016: Project announced by SSAB, LKAB, Vattenfall for the fossil free steel making initiative
2017: SSAB, LKAB, and Vattenfall formed the JV company, Hybrit Development AB
2020: Project’s pilot plant inaugurated for production of sponge iron in Sweden
2021: First Hydrogen reduced sponge iron produced and finished steel delivered to the automobile customer.
The customer produced 1st vehicle made from fossil free steel
2022: The customer produced construction machinery from fossil free steel
Underground Hydrogen gas storage of 100 m3 is inaugurated in Sweden
2023: Launched a fossil free product
2026: Fossil free steel will be available in the market
Conclusion:
The project aims to revolutionize steel production by using green hydrogen, significantly reducing carbon
emissions. Its success could set a new standard for sustainable industry and play a vital role in addressing climate
change
PAGE 33
12
Information available on company’s website and press releases

Case: ArcelorMittal Dofasco’s transition to low-carbon steel production 13
Summary: facility's capacity expansion potential using the H2
DRI-EAF method.
ArcelorMittal Dofasco, a steel producer in Canada, has
embarked on an ambitious project to significantly The rationale behind the project is the company’s
reduce its carbon footprint by transforming its commitment to phasing out coal from its primary
steelmaking process. The company plans to cut three steelmaking operations, targeting a 60% reduction in
million tons of CO2 emissions by constructing a 2.5 emissions, leading to around 3 million tons of
million tons per annum hydrogen-ready direct reduced annual CO2 abatement. This move is not only
iron (DRI) facility. This initiative is a strategic move environmentally responsible but also positions the
towards sustainable steel production, aligning with company as a leader in the transition to green steel
global efforts to combat climate change. production.
Background: Project financials:
The proposed expansion involves the introduction of a The project is estimated to cost 1.8 billion Canadian
vertical shaft DRI using natural gas, coupled with an dollars. It has secured significant funding from the
electric arc furnace (EAF), while retaining the existing government, with contributions of CAD$400 million
downstream facilities. The DRI shaft is designed to be and CAD$500 million from the Government of Canada
adaptable for future integration with green hydrogen and the Government of Ontario, respectively.
(H2) as a fuel source. This would further enhance the
Project timelines:
2021: Project announcement and formation of the project team. Completion of significant pre-front end
engineering and design (pre-FEED).
2022: Ground-breaking ceremony marking the start of the project.
2023: Commencement of detailed engineering and demolition of the decommissioned Coke Plant-1, followed
by the start of onsite construction work.
2024: Foundation work is set to begin.
2026: Construction of new assets, including the EAF, is expected to be completed.
2028: The full transition from the active BF-BOF route to the DRI-EAF route is anticipated.
Conclusion:
The company’s strategic shift to a hydrogen-ready DRI facility represents a significant step forward in the steel
industry's journey towards decarbonization. The project not only demonstrates the company's leadership in
adopting green technologies but also serves as a blueprint for other steel producers aiming to reduce their
environmental impact. With the support of the Canadian government, this initiative sets a precedent for public-
private collaboration in achieving sustainability goals within the industrial sector.
PAGE 34
13
Information is available on company’s website and press releases

PAGE 35

08 Recommendations
PAGE 36

To advance the adoption and production of green steel in India, a multifaceted approach is essential. This
approach should encompass technological advancements, policy interventions, ecosystem requirements,
and strategic collaborations. The following recommendations outline the key areas of focus:
Green steel definition and mandate captive projects and innovative cooperative models
that drive larger supply chain decarbonization.
To establish a robust framework for green steel, it is
essential to implement Product Level Carbon
Footprinting (PCF) for accurate emission tracking and Carbon capture utilization and storage
reporting at the product or grade level. Policy
High Technology Readiness Level (TRL) carbon
interventions should include the development of
capture and separation technologies must be
standards and certification for green steel production,
developed to achieve a cost of at least $35 per ton of
setting maximum carbon allowances and steel sector’s
CO2 captured by 2030, supporting emission reduction
plant level emission reduction targets are required.
via the BF-BOF route. Policy interventions should
Additionally, there should be an adoption mandate
mandate the utilization of captured CO2 from the
requiring a specific percentage of green steel usage
steel industry in downstream applications, provide
by domestic consumers, similar to Renewable
carbon credits for sequestration under Article
Purchase Obligations (RPO). The ecosystem must
6.2/6.4, and establish Carbon Capture Utilization
support these initiatives through Green Steel
(CCU) hubs around industrial areas. The ecosystem
Certification Programs, collaborating with industry
should assess the downstream market for captured
and certification bodies to create audited low-emission
CO2 utilization like methanol, ethanol, polyurethane
certificates, and fostering a demand pool from
etc. production. An additional application to
consumers focused on their scope 3 reduction targets.
investigate is the potential for improved oil extraction
by utilizing captured CO2 for injection into oil fields,
Adoption of green steel pathways thereby facilitating enhanced oil recovery. Further,
the evaluation of definite CO2 storage capacity is
For the adoption of green steel pathways, existing BF-
required.
BOF steelmakers should invest in energy efficiency,
renewables, alternate fuels and carbon capture
technologies. Greenfield expansions should focus on Scrap processing
pathways like Electric Arc Furnaces (EAF) with
To effectively integrate scrap into the formal sector, it
renewables and Green Hydrogen-Direct Reduced Iron
is recommended to setup state-of-the-art scrap
(H2-DRI). A strong policy framework is required,
processing centres with advanced sorting and
offering tax incentives, capital subsidies, viability gap
recycling technologies. An Extended Producer
funding and grants for companies decarbonizing their
Responsibility (EPR) framework should be
current assets or adopting green steel technologies.
implemented to ensure manufacturers take back end-
The ecosystem should facilitate joint research and
of-life products, complemented by incentives for
development programs to address specific challenges
companies investing in scrap infrastructure. The
in green steel production, foster global technology
Government of India has established a vehicle
collaborations and develop the necessary workforce
scrappage policy. In a similar vein, the development of
and skillsets for implementation.
a policy dedicated to the aggregation and processing
of scrap materials from infrastructure projects could
Renewable energy availability be considered. These measures will formalize the
scrap industry, contribute to the circular economy,
Achieving the target of 90% renewable energy by
and reduce the environmental footprint of steel
2027 necessitates advancements in solar, wind and
production.
energy storage technologies. Investments in power
evacuation infrastructure, grid stability and managing
load curve fluctuations are crucial. Policy Beneficiation of low-grade iron ore and technology
interventions should focus on land availability and integration
rebates for captive renewable energy plants, banking The direct reduction process necessitates the use of
facilities, support for phasing out captive power plants high-grade iron ore for optimal performance. Using
(CPP) for existing assets, bringing steel hubs and iron ore of a lower grade can lead to a host of issues,
states under interstate transmission, prioritization of
including lower process efficiency, gangue presence in
RE demand to the sector, and funding support or tax
the direct reduced iron, and increased energy
exemptions under open access green energy policies.
demands. To counter these challenges, it may be
The ecosystem must encourage tie-ups with
beneficial to consider the beneficiation of the lower-
renewable energy developers, setting up group
PAGE 37
grade iron ore to enhance its quality. Additionally, the

adoption of technologies such as melters for DRI or must consider the implications of imposing a carbon
the installation of submerged arc furnaces directly tax on the steel value chain.
below the direct reduction shaft could be explored.
These technologies have the capability to liquefy the
CBAM challenge
direct reduced iron into molten hot metal. A
significant benefit of this approach is the ability to To navigate the CBAM challenge, it is recommended
integrate with existing basic oxygen furnace (BOF) that India adopts a uniform mechanism for verifying
infrastructure for the steelmaking process. and accounting for GHG emissions, supported by
technological advancements for real-time verification.
India should establish a national framework in line with
Carbon pricing and cost of abatement
international CBAM standards, while also formulating
The cost of decarbonizing technologies, particularly a protectionist, India-specific CBAM policy to
carbon capture and green hydrogen injection, must safeguard domestic industries, including phased
decline rapidly to reduce the overall cost of implementation and financial support for technological
decarbonization. Policy interventions should introduce upgrades. Furthermore, an ecosystem fostering
carbon pricing via carbon capture and storage (CCTS) collaboration between government, industry, and
for the domestic steel sector and provide guidelines environmental experts is essential, alongside sector-
for the impact of the carbon border adjustment specific alliances to innovate and collectively align
mechanism (CBAM) on Indian players. The ecosystem with CBAM regulations.
Conclusion:
In conclusion, the transition to green steel production requires a comprehensive approach encompassing
technological advancements, robust policy frameworks, and a supportive ecosystem. By defining and mandating
green steel standards, adopting innovative production pathways, ensuring renewable energy availability, advancing
carbon capture technologies, and implementing effective carbon pricing, India can lead the way in sustainable steel
production. These recommendations provide a strategic roadmap for achieving significant emission reductions and
fostering a greener, more resilient steel industry.
PAGE 38

PAGE 39

Notes:
PAGE 40

Notes:
PAGE 41

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Ernst & Young LLP About India Green Steel Coalition
EY | Building a better working world To promote green steel manufacturing and consumption in
India through enabling policies and demand alignment,
India Green Steel Coalition (IGSC) has been constituted by
EY exists to build a better working world, helping to create WWF India and Confederation of Indian Industry (CII). IGSC
long-term value for clients, people and society and build has a vision towards ensuring optimal reduction in steel
trust in the capital markets. sector’s emissions intensity by 2030.
IGSC will support the efforts of the government towards
Enabled by data and technology, diverse EY teams in over
increasing domestic steel production and for creating an
150 countries provide trust through assurance and help
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clients grow, transform and operate. intensity of the sector. IGSC will work actively with the
Working across assurance, consulting, law, strategy, tax primary and secondary producers, demand side players to
and transactions, EY teams ask better questions to find new understand the challenges in this transition and advocacy
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Green Steel

Green Steel Production Pathways for India

Green Steel Production Pathways for India

8 Steel sector: global and Indian outlook

12 Indian steel sector: BF-BOF on rise

18 What is green steel?

22 Cost of green steel

28 Production pathways of green steel

32 Select H2 DRI case studies

Green Steel Production Pathways for India

Green Steel Production Pathways for India

Green Steel Production Pathways for India

Green Steel Production Pathways for India

Green Steel Production Pathways for India

Green Steel Production Pathways for India

2005 2010 2015 2020 2021 2022 2023

Figure 2: Country wise crude steel production (million tons) in 2023

Green Steel Production Pathways for India

Figure 3: Split of steelmaking routes in 2023

Source: World Steel Association, World Steel in Figures 2024

Green Steel Production Pathways for India

FY21 FY22 FY23 FY24

Crude Steel Production Installed Capacity

Source: Ministry of Steel, Annual Report 2023-24

Figure 5: India's finished steel production v/s finished steel consumption

FY21 FY22 FY23 FY24

Finished Steel Consumption Finished Steel Production

Source: Ministry of Steel, Annual Report 2023-24

In India's steel production landscape, the

the primary raw material. Like the BF-BOF Electric Arc

Green Steel Production Pathways for India

Green Steel Production Pathways for India

Figure 7: Announced capacity of steelmaking projects by year 2032 (million tons)

Figure 8: BaU emissions from Indian BF-BOF projects in pipeline by 2032

Green Steel Production Pathways for India

Source: EY Parthenon analysis

Green Steel Production Pathways for India

Source: EY Parthenon analysis

Green Steel Production Pathways for India

Source: EY Parthenon analysis

Green Steel Production Pathways for India

Green Steel Production Pathways for India

Green Steel Production Pathways for India

Standards and Key players

► Sets emission intensity target based on scrap usage across 4 bands

► The Science Based Targets Initiative (SBTi) developed the Steel

► Sets emission intensity target based on scrap usage across between

► Emission intensity reduction in BF operations by 20%, if baseline is

Green Steel Production Pathways for India

Companies 9 Certificates Description

► XCarb green steel certificates are issued by company’s

Green Steel Production Pathways for India

Green Steel Production Pathways for India

Green Steel Production Pathways for India

Source: EY Parthenon analysis

Green Steel Production Pathways for India

Green Steel Production Pathways for India

Source: EY Parthenon analysis

Green Steel Production Pathways for India

Source: EY Parthenon analysis