Context

• India is considering the possibility of mandating the purchase of green steel for premium or ultra high-end models among auto-mobile companies, including luxury carmakers like Audi or BMW.

Some European Examples

• European carmakers like Volkswagen are partnering with Salzgitter AG to source green steel. Volkswagen plans to use low-CO2 steel in key future projects from the end of 2025.
• Mercedes-Benz AG became the first carmaker to take an equity stake in Swedish start-up H2 Green Steel as a way to introduce CO2-free steel into series production.
• BMW and Ford are also exploring the possibility of incorporating green steel as part of their supply chains.
• In such a situation, Indian automobile companies should also move in this direction.

About Green Steel

• In general, there is no specific definition of 'green steel'. It refers to metal produced using methods that have minimal carbon emissions.
• This includes the use of hydrogen, renewable sources of electricity, use of recycled scrap, etc. instead of the traditional carbon-intensive manufacturing route of coal-fired plants.
• In other words, green steel means manufacturing of steel without the use of fossil fuels.

Benefit

• Reduces greenhouse gas emissions.
• Cuts costs.
• This improves the quality of steel.
• Low-carbon hydrogen (blue hydrogen and green hydrogen) can help reduce the carbon footprint of the steel industry.

Production Methods

• Replacing primary production processes with cleaner alternatives
• Carbon Capture and Utilisation Technology
• Use of traditional sources of energy
• Direct electrification through electrolysis of iron ore

Importance

• In view of the commitments made at the United Nations Climate Change Conference (COP26), the Indian steel industry needs to significantly reduce its emissions by 2030 and reach net-zero carbon emissions by 2070.
• In such a situation, this step can play an important role in fulfilling India's commitments.