What is “Green Steel? Renewable Electric Arc Furnaces (EAFs)

Decarbonizing India’s Steel Sector: 

The Paradox of Growth

• Economic Importance: Steel is the backbone of Indian manufacturing and infrastructure.

• Climate Impact: * India is the 2nd largest steel producer globally (120 MT/year).

  • The sector contributes 7–9% of global CO₂ emissions.

• The Goal: India must decarbonize this sector to meet its global commitment of Net-Zero by 2070.

Technological Pathways to “Green Steel”:

Advanced technologies can reduce emissions by 95–97% by 2050, including:

• H₂-DRI: Green hydrogen-based direct reduced iron.

• Renewable EAFs: Electric Arc Furnaces powered by clean energy.

• Carbon Capture: For legacy assets (existing traditional plants).

• Circular Economy: Increased utilization of scrap metal.

 The Economic Barrier: The “Green Premium”:

• Cost Gap: Green steel is 20–40% more expensive than conventional Blast Furnace (BF-BOF) steel.

• Current Policy Flaws:

  • Reliance on subsidies (PLI, capital grants, viability gap funding).

  • Risks: Subsidies can lock in inefficiencies, stifle innovation, and create fiscal strain on the government.

 The Solution: Strategic Public Procurement:

The government has a “potent weapon” to bypass the subsidy trap by leveraging its role as a buyer.

• Market Leverage: Public sector procurement across infrastructure (Railways, Roads, Defence, Housing) accounts for ~30% of India’s GDP.

• The Shift: Move away from “Carbon-Neutral” procurement (which only looks at the lowest price) to Green-Mandated procurement.

• Key Benefits:

  • Predictability: Creates a stable, creditworthy demand base.

  • Market Nudge: Forces the industry to scale green tech to meet government tender specifications.

  • Innovation: Encourages competition based on sustainability rather than just cost-cutting.

Green Hydrogen-Based Direct Reduced Iron (H₂-DRI):

In traditional steelmaking, we use Coke (derived from coal) to remove oxygen from iron ore. This process releases massive amounts of $CO_2$. H₂-DRI changes the chemistry of this process.

• The Process: Instead of coal, Green Hydrogen ($H_2$) is pumped into a furnace with the iron ore.

• The Chemical Shift: In a traditional furnace, the byproduct is $CO_2$. In an H₂-DRI furnace, the hydrogen reacts with the oxygen in the ore to produce pure water vapor ($H_2O$).

• “Green” Requirement: For this to be truly carbon-free, the hydrogen must be produced via electrolysis powered by renewable energy (wind or solar), rather than natural gas.

Why it matters: It addresses the “Primary” steel production phase—the most difficult part of the industry to decarbonize because it replaces the actual chemical reducing agent (coal).

Renewable Electric Arc Furnaces (EAFs):

Traditional steel uses a Basic Oxygen Furnace (BOF), which requires molten iron from a coal-fired blast furnace. An Electric Arc Furnace (EAF) is a more flexible, modern alternative.

• The Process: An EAF uses high-power electric arcs to melt raw materials (like scrap metal or the DRI mentioned above). Imagine a giant pot where electricity creates a “lightning bolt” to melt the metal.

• The “Renewable” Factor: An EAF is only as green as the grid it sits on. If it runs on coal-powered electricity, it still has a footprint. Renewable EAFs are specifically synced with dedicated solar, wind, or hydro power plants.

• The Circular Economy: EAFs are excellent at recycling. They can take 100% steel scrap and turn it into high-quality new steel, using significantly less energy than making steel from scratch.