Commodities

Scrappage policy: Firms forge ahead to ‘steel’ scrap

Suresh P Iyengar Mumbai | Updated on March 21, 2021

Steel produced through the recycled route entails lower carbon emissions, lower resource consumption, and lower energy utilisation.   -  REUTERS

Move to cut greenhouse gas emissions

It’s not only automobile companies that are looking to gain from the new scrappage policy; steel companies, including Tata Steel, JSW Steel and Liberty group, are also gearing up to produce more steel by recycling scrap.

Steel produced through the recycled route entails lower carbon emissions, resource consumption and energy utilisation.

Globally, the steel industry contributes 6-7 per cent of total greenhouse gas emissions. . GHG emission of the steel industry is about 2-2.8 tonnes of CO per tonne of crude steel against the global average of 1.8 tonnes. Producing steel using scrap can reduce the GHG emissions to below 0.5 tonne of CO per tonne of steel.

Tata Steel has already set up a scrap-based steel plant with an annual capacity of 5 lakh tonnes at Rohtak in Haryana. The company sources scrap by procuring old vehicles, obsolete household, construction and demolition remains and industrial scrap.

Recycling routes

“Steel recycling through the electric arc furnace route is a global trend, and going forward, it would become imperative for India’s sustainable growth. India spends around ₹24,500 crore a year on steel scrap imports to meet the shortfall in domestic supply. The new scrappage policy would help steel players to become self-reliant in ferrous scrap by 2030,” said an industry expert.

Most developed countries have adopted the scrap-based EAF routes for producing steel. India uses both the EAF and induction furnace routes.

The main COload in EAF-based steel production comes from the electricity used to melt the scrap. This can be reduced by using renewable power for producing electricity.

Currently, India generates 25 million tonnes of steel scrap and imports about 6.5 mt a year.

Vehicle scrapping can generate about 70-75 per cent ferrous (steel) scrap, 6-8 per cent non-ferrous metal scrap, besides miscellaneous rubber and plastic scrap.

‘Blessing in disguise’

The vehicle scrapping policy will be a blessing in disguise for the steel industry which depends totally on imports for coking coal and natural gas, said an analyst.

Sanjeev Gupta, Executive Chairman, Liberty Steel, said the global strategy is to recycle more, especially in countries where scrap is available and eventually use hydrogen, rather than coal, as a source for making steel.

Published on March 21, 2021

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