Steel industry flags high input cost, seeks support for green transition

Demands include zero duty on natural gas, use of District Mineral Foundation and CAMPA funds

Tata Steel and ArcelorMittal Nippon Steel India (AM/NS), two of the country’s largest steel firms, have urged the government to ramp up funding and policy support for the transition to green steel, while also pushing for measures to cut high input costs.

Speaking at an industry event here on Monday, Dilip Oommen, chief executive officer (CEO), AM/NS India, said the government must take steps to decrease the costs of inputs in steel production. 

“Steel input prices, including iron ore, electricity duty, and import duty on liquefied natural gas (LNG), have to come down,” he said. Oommen added that lower costs would make steel more affordable, boost consumption, and even help contain inflation, and the government should recognise this because “sustainability comes at a cost”. 

Speaking at the same event,  D B Sundara Ramam, vice-president, Tata Steel, said the government must allocate more to the National Green Hydrogen Mission. “Under that, the budget is close to ₹445 crore. The way the steel industry is looking for a lead in steel production, (but) this may not be sufficient,” he said. 

Ramam called for incentives to make low-carbon steel viable. “If this green steel is used in public resource projects, it could be an investment for the industry,” he said. He also highlighted unorganised scrap collection as a structural weakness in India’s decarbonisation efforts.  

Other demands included cutting duties on natural gas to zero, and using funds collected under the District Mineral Foundation (DMF) and Compensatory Afforestation Fund (CAMPA) to support the sector’s green transition.  

On mining, Ramam pushed for reforms to reduce costs and delays. “The proposal from the steel industry is how we can have a national auction calendar, how we can move to a single-stage auction from the current process, and how we can use digital, real-time grade determination instead of the offline measurement, which takes a lot of time,” he said. 

Both the executives stressed that sustainability would require financial backing because customers might not be willing to pay a premium for low-carbon steel.