Environmental and economic evaluation of decarbonization strategies for the Indian steel industry

Abstract

Decarbonizing hard-to-abate sectors, such as iron and steel, is critical to achieving climate change goals given the unique and often fossil fuel-based manufacturing processes. Evaluating the iron and steel sector for India is also pertinent, given the immense industrial growth expected in the upcoming decades (IEA, 2021). Cost and emission models have been developed and analyzed using the Sustainable Energy Systems Analysis Modelling Environment (SESAME) Industry and Industrial Fleet models. The models calculate cradle-to-gate greenhouse gas (GHG) emissions and the levelized cost of several steel production pathways. In addition to plant-level analysis, the models estimate emissions and energy consumption for the Indian steel sector.From the marginal abatement cost (MAC) analysis, smelting technologies with carbon capture provide the best option with a MAC as low as $9/t CO2e and a 70% emission reduction relative to the BF-BOF. However, the green H2-DRI pathway reduces emissions even more (84%) with a higher MAC of $112/t CO2e. For existing NG-DRI plants, switching to hydrogen is more advantageous than carbon capture with MEA since the emissions are sensitive to natural gas upstream methane leakages. Sector scenario analysis with The Energy Resource Institute steel demand and International Energy Agency production pathway projections indicate that combined resource efficiency efforts and decarbonization pathways will aid in decreasing cumulative 2050 emissions by about 27% from the baseline scenario. Future steel production will need to be flexible to new fuels for reducing agents and potential CCS retrofitting to support the decarbonization efforts and mitigate climate change.