There is no silver bullet for green transition in hard-to-abate sectors, including steel, said Tata Steel CEO & Managing Director, T V Narendran. He noted that this is a complex challenge that needs government support.
The statement from the industry leader comes amid growing concerns across economies over emissions and the need to increase the usage of green energy.
Steel is the most commonly used metal in the world and one cannot do without steel. Even for the transition, steel will be needed to hold solar panels, windmills, storage and pipelines, said Narendran, addressing a session at B20 Summit India 2023.
“You need to find a solution, and there is no silver bullet for that… India is alone going to add 100-150 million tonne steel capacity every decade… For the next few decades you will have these hard-to-abate sectors growing. Cement production is twice the amount of steel production globally… You need to find solutions that are technical, which don’t get solved by just finding another energy source,” he said.
The supply chain in the steel sector has been built over 100 years; so transitioning from coal to gas and even hydrogen is a very complex challenge from a supply chain point, said Narendran, who is also the chairman of the manufacturing council of the industry body CII (Confederation of Indian Industry).
“This journey is going to be significant and we should not underestimate that the industry can support part of the cost… cost of transition, so needs government support. You need customers to be willing to pay more for green products… It’s a long journey and I think the journey has started in Europe and the US,” he said.
In India too, aggressive renewable energy targets have been set. A lot needs to be done because the majority of increasing steel capacity in the world is going to come up in India, he said. “We need to transition to greener process routes.”
He also said steel accounts for about 8% of the carbon footprint in the world as the industry is growing, particularly in the emerging markets.
The transition can happen only if there is a policy framework to support it and carbon markets, which are there in Europe, he added.
Speaking on Tata Steel’s operations in the Netherlands, Narendran said the business there is moving from coal to gas to hydrogen. The transition is important for that nation because Tata Steel Netherlands will become one of the biggest consumers of hydrogen there, noted Narendran.
In the UK, it’s different because the operations have a lot of scrap; so it’s about how you recycle that, he said.
Edited by Swetha Kannan
