In response to two individuals conscious of the matter, the metal ministry has written to varied infrastructure- and industry-focused ministries, asking them to nudge the PSUs below their administrative management to be the primary procurers of inexperienced metal being rolled out by the home {industry} after the federal government finalised the inexperienced metal taxonomy in December 2024.
Inexperienced metal, produced utilizing sustainable manufacturing practices, shall be 10-15% dearer than current varieties. The plan to contain PSUs in driving its consumption is aimed toward encouraging different metal customers to start out shopping for less-polluting metal.
Captive viewers
Below the proposed plan, the federal government goals to offer an assured marketplace for metal producers, with PSUs shopping for upto 25 million tonnes (mt) of inexperienced metal as and when its manufacturing turns into widespread, mentioned the primary individual cited above. This could require a big half of the present crude metal manufacturing capability of simply over 150 mt to show inexperienced.
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The second individual cited above mentioned that PSUs within the defence, transport, energy, oil and fuel, railways, and MSME sectors have been huge customers of metal. In the event that they began procuring metal produced environmentally pleasant metal, a prepared market could be created that might drive its use in different sectors, too.
As a part of its plan to creating the metal sector future-ready, the federal government can also require metal corporations to make a sure proportion of their output inexperienced and reserve a few of it for presidency procurement, the second individual added.
Queries despatched to the ministry of metal remained unanswered.
What constitutes inexperienced metal?
The push for inexperienced metal manufacturing comes after metal ministry revealed the Inexperienced Metal Taxonomy for India in December 2024 to offer a standard language and framework on what constitutes lower-carbon metal. The purpose to advance decarbonisation of India’s metal {industry} and catalyse demand for less-polluting metal.
Metal is categorised as inexperienced based mostly on the emissions depth of the metal plant the place it’s produced. To qualify, the CO2 equal (CO2e) emissions depth have to be lower than 2.2 tonnes of CO2e per tonne of completed metal (tfs). Metal with an emissions depth above this threshold will not be eligible for a inexperienced ranking, whereas metal beneath it will likely be rated on a three-tier system: three-star, four-star, or five-star inexperienced metal.
‘Early-mover benefit’
Abhijit Kulkarni, Senior Associate, Metals & Mining, EY-Parthenon India, “With the inexperienced metal taxonomy in place, the assured home demand plan of the federal government to devour 25 mt of inexperienced metal is essential for the sector’s decarbonisation. The present definition of inexperienced metal is de-risking early investments within the technological shift. The purpose is to realize emissions depth of lower than 1.6 tonne of CO2e per tonne of completed metal for or not it’s rated 5 star. The proposed emissions depth is prone to be achievable with out inexperienced hydrogen-based DRI (direct decreased iron) metal making or RE (renewable power)-powered electrical arc furnaces.”
He added, “The initiative will assist the Indian metal sector obtain compliance with rules equivalent to CBAM and India’s upcoming Carbon Credit score Buying and selling Scheme (CCTS). It would additionally compel Indian steelmakers to fulfill their clients’ demand for low-carbon-footprint metal.”
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Rajib Maitra, associate at Deloitte India, mentioned, “India has a median emissions depth of two.54 tCO2/tcs (tonne of Co2 per tonne of carbon metal) whereas these of main economies are: US 0.79 tCO2/tcs, Europe 1.06 tCO2/tcs, South Korea 1.35 tCO2/tcs; Japan 1.61 tCO2/tcs; and Russia 1.65 tCO2/tcs.
“Therefore, country-specific insurance policies might formulate their green-steel taxonomy beneath their common emissions depth. Nonetheless, the present framework of inexperienced metal taxonomy offers India an early-mover benefit. Indian producers will be capable of adapt quicker to tighter international rules, resulting in industrial competitiveness and know-how adoption.”
Inexperienced shoots
Indian {industry} has already began embracing the inexperienced metal taxonomy. Non-public metal main Arcelor-Mittal Nippon Metal (AMNS) is taking numerous initiatives to supply low-carbon inexperienced metal and plans to have 70% inexperienced metal in its portfolio by early FY27. The corporate can also be within the midst of investing greater than ₹60,000 crore to ramp up capability at its Hazira plant from round 10 million tonne to fifteen million tonnes. Public-sector metal main SAIL can also be modernising its crops to cut back emissions and qualify for star rankings below the inexperienced metal taxonomy.
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Maitra pointed to the same initiative in 2017 that bore fruit. He mentioned, “Below the Domestically Manufactured Iron and Metal Merchandise (DMI&SP) coverage launched in 2017, the federal government gave desire to home producers in procurement of 49 merchandise. The coverage led to an elevated avoidance of metal imports whereas elevating authorities procurement to ₹52,500 crore (equal to 7.5-10.5 mt in FY25). Equally, it’s anticipated that obligatory procurement of inexperienced metal in authorities tenders will enhance home demand and act as a essential lever in capability augmentation throughout the section.”
