Industry calls for Viability Gap Funding & Subsidies
Representatives of the Steel Industry have called for Government support by way of Viability Gap Funding (VGF) for green transition projects and Subsidies for green steel production and achieving the nation’s net zero target by 2070.
This was highlighted at the Conclave on Green Steel: India’s Journey towards Low Carbon Steel Manufacturing organized by PHDCCI wherein Vizag Industrial Scan was industry partner and was supported by the Ministry of Steel.
The Chief Guest on the occasion, Mr Ashwini Kumar, Economic Adviser, Ministry of Steel, GOI stated that India is in a bright spot in the global steel scenario, being the fastest-growing major economy in the World.
‘Our steel consumption is projected to grow by 10% every year. While other countries discuss excess capacity, in India we are talking about adding the capacity’ said Mr Kumar.
The economic adviser emphasized the need for the entire ecosystem to step up in monitoring emissions and accredited professionals to monitor steel plants across the Country.
Mr. Kumar mentioned that there is no single pathway for green transition while highlighting the importance of availability and accessibility of technology and said that Green H2 is one area that holds a lot of potential.
He further emphasized on carbon capture utilization and storage, along with R&D. When looking at multiple pathways, we must minimize the cost of transition.
The financing requirement is huge, estimated at 8.5 trillion rupees, and the Ministry is mindful of this. Steel companies should come up with projects aimed at decarbonization, and financing can be mobilized from multilateral development banks, Mr. Kumar concluded.
Mr Anil K. Chaudhary, Chairman, Minerals & Metals Committee, PHDCCI, and Former Chairman, SAIL, in his Theme Address said that the Steel Industry with capacity of 178 MT and production of 138 MT has been one of the largest emitters of Green House Gases (GHS) in the Country.
He exhorted the Industry to achieve the greening across the value chain starting from mine head and ending with consumption of steel. Keeping in view very high quantum of emissions vis-a vis World’s average, it is high time to take substantial measures towards reduction in CO2 emissions in a phased manner so as to achieve net zero position much before 2070, Mr. Chaudhary added.
The former SAIL chairman emphasized the need for policy and regulatory interventions on a continuous basis.
He stated that measures like defining the Green Steel and setting standards for Green Products and use of scrap in steel making, creating demand for green steel including mandating use of Green Steel for public infra. etc. will go a long way in in decarbonising the India’s Steel Sector.
He highlighted that Green Financing would require innovative financing frameworks and mechanisms including blended finance, technical assistance grants, guarantees, risk insurance and concessional capital. He further requested for Viability Gap Funding (VGF) from the Government to take care of the very high initial capital cost for transition.
