JSW Steel laying groundwork for CBAM regime, says CEO Jayant Acharya

JSW Steel remains focussed on the domestic market due to a strong growth potential in the coming years, even as it continued to lay the foundation for a low-carbon future as the industry geared up for the European Union’s (EU’s) Carbon Border Adjustment Mechanism (CBAM).

 

“Our main focus will be the domestic market because we really see a strong growth in the coming years in India,” JSW Steel’s joint managing director and chief executive officer Jayant Acharya, said.

 

However, the company is putting in place the building blocks for low-carbon exports, as India’s key market for steel exports moves towards the CBAM regime.

 

At Salav in Maharashtra, JSW Steel is setting up a 4 million tonne (mt) green steel plant -- DRI (direct reduced iron) based on natural gas and on renewable energy -- which may come up in phases.

 

“Between now and the end of FY31 (financial year 2031), we will be executing the Salav project which will be up to 4 mt in two phases. The first phase of 2 mt is part of the 50 mt capacity target we have set for ourselves,” Acharya said.

 

He added that the company was waiting for more clarity on the CBAM framework and tariff structures before finalising its capacity expansion plans and its timing. Guidelines are expected in November.

 

The objective of the CBAM, set to be implemented from January 1, is to level the playing field between EU producers who pay for their carbon emissions and foreign exporters who don’t, by putting a “carbon cost” on imports into the EU.

 

Moreover, the EU has proposed cutting tariff-free steel import quotas to 18.3 mt a year, nearly 47 per cent lower than 2024 levels, and doubling out-of-quota duties to 50 per cent to protect its domestic industry.

 

The plan to replace the existing steel safeguard measure, which is due to expire in June 2026, is pending approval from the European Parliament and Council.

 

Acharya said the capacity at Salav would serve as JSW Steel’s facility for production of low carbon emission steel products.

 

“The capacity will be more than sufficient for the medium term to cover our export requirements for such products,” he said.

 

In the interim, JSW will have some low carbon emission steel in its portfolio by incorporating various emission reduction initiatives like SEED (Sustainable Energy, Environment and Decarbonisation), renewable energy, etc in the steelmaking process.

 

The SEED project is aimed at reducing 18 mt of CO2 emissions by 2030.

 

The company has commissioned a 25Mw green hydrogen electrolyser, with an annual production capacity of 3,800 tonnes.