India's Steel Industry Could Face US$184 Billion Stranded Asset Risk: Report
Moneylife Digital Team 22 June 2022
The steel industry could face US$518bn (billion) in stranded asset risk as countries work towards meeting their long-term carbon neutrality commitments, if the 345.3MTPA (million tonnes per annum) of emissions-heavy blast furnace basic oxygen furnace capacity (BF-BOF) proposed or under construction is fully developed, a new data from Global Energy Monitor's Global Steel Plant Tracker said on Tuesday.
Much of this stranded asset risk is concentrated in Asia: 80% of the BOF steelmaking capacity under development globally is planned in China (158MTPA with up to US$237bn) and India (123MTPA; up to US$184bn).
An additional 14 per cent of the BF-BOF steelmaking capacity under development is planned for Indonesia (24MTPA, US$35bn), Vietnam (16MTPA,US $23bn), and Malaysia (12MTPA, US$17bn).
Yet, progress towards decarbonising the sector by replacing BF-BOF steel-making with the less emissions-intensive electric arc furnace pathway is stagnant.
According to the International Energy Agency's Net-zero by 2050 scenario, the share of electric arc furnace steelmaking capacity should reach 37% by 2030 and 53% by 2050.
This target requires an additional 576MTPA electric arc furnace capacity, while, at the same time, cancelling or retiring 419MTPA BOF capacity.
According to data in the Global Steel Plant Tracker, the shares of capacity by steelmaking technology would only shift from 69% BOF and 31% electric arc furnace in 2022 to 68% BOF and 32% electric arc furnace in 2030, and remain approximately the same through to 2050.
The report also finds that emissions estimates for steel-making fail to account for the impact of metallurgical coal mining.
The steel industry currently emits approximately 2.6GT (gigatonnes) of direct CO2 emissions per year and 1.1GT of indirect CO2 emissions from the power sector and combustion of steel off-gasses.
If the methane emissions from metallurgical coal mining are accounted for in global assessments of steel-making emissions, the footprint of the steel industry may be as much as 27% (1 Gt CO2-e20) higher than currently reported.
"Transitioning to less carbon-intensive steelmaking is a big part of countries meeting their net zero goals," said Caitlin Swalec, project manager for the Global Steel Plant Tracker.
"We need to stop investing in coal-based blast furnace basic oxygen equipment and speed up the shift towards electric arc furnace steelmaking," Ms Swalec said.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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