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Increased coal usage a serious setback for carbon reduction in

Press Trust of India  |  Mumbai 

Global rating agency Moody's today said that Indian industry is yet to introduce more stringent emission regulations, and an increase in usage poses a serious limitation to the potential for carbon reduction.

The global industry's progress in reducing emissions and use continues to be limited. The challenge for the industry will be to lower carbon intensity at a time when demand for is forecast to grow 31 per cent by 2030, from 2016 levels.

The reports CO2 intensity has increased by more than 10 per cent, to 1.9 tonnes per tonne of steel manufactured over the past decade, while intensity has fallen modestly.

Under the agreement has agreed to reduce the emissions intensity of its GDP by 33 to 35 per cent by 2030 from 2005 levels. has yet to introduce more stringent emission regulations. We expect measures to be introduced, but they could be more gradual given India's abundant supply of iron ore, which could delay the shift to electric arc furnaces (EAF's), said in its report here.

Potentially offsetting the benefits of China's rationalisation is the expected doubling of Indian steel production by 2030, challenging the industry's efforts to correct overcapacity and reduce carbon intensity.

The International Agency (IEA) projects India's share of energy dedicated to will rise to 29 per cent by 2040, up from 21 per cent in 2013, while energy consumed by the industry is set to more than quadruple over the same period.

India's anticipated steel growth is due to the country's rapid urbanisation, large infrastructure needs, and an increasing preference for steel and over materials such as clay bricks. is likely to become less carbon intensive as new mills are built and more scrap becomes available, however is expected to remain the dominant for the sector, the report said.

Increased usage poses a serious limitation to the potential for carbon reduction within the Indian steel industry, since the is the largest industrial energy user in and also the source of the largest forecast increase in over the period to 2040. In addition, the imposition of tariffs under Section 232 on steel imported into the US is likely to result in some capacity restarts.

across the globe are facing increasing pressure to reduce Efforts to decarbonise the global economy will bring greater scrutiny to the energy and carbon intensity of the steel sector, which is responsible for 6-7 per cent of global emissions. Yet the industry's carbon intensity will likely continue to rise through 2020, coinciding with a period of strong demand growth, Moody's said.

According to the IEA, China's will begin to decline as its industrial activity switches to higher-technology in coming years, falling about 30 per cent by 2040 from 2015 levels. At that level, would account for only 30 per cent of global production in 2040, down from almost 50 per cent today, it said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, March 21 2018. 20:40 IST