The steel sector in India is facing potential challenges due to the European Union’s proposal to ban steel scrap exports, a crucial raw material for producing steel through the electric arc furnace route. The Economic Survey highlights that this proposed ban could significantly impede developing countries’ ability to produce more carbon-efficient steel.
Steel production through the electric arc furnace route is known to be less carbon emitting compared to the traditional blast furnace route, which relies on coal and iron ore as primary raw materials. Data shows that steel produced through electric arc furnaces has an emission intensity of 0.4 to 0.8 tonnes of carbon dioxide per tonne of steel, while blast furnace steel production emits around 2 tonnes of carbon dioxide per tonne of steel.
India, a major importer of steel scrap, imported approximately 1.33 million tonnes of stainless steel scrap and 9-10 million tonnes of mild steel scrap last year from countries like Thailand, Europe, Indonesia, the US, and the Middle East.
The Steel Scrap Recycling Policy aims to encourage efficient recycling, as high-quality scrap availability in sufficient quantities is crucial for transitioning to green steel and supporting the industry’s future growth.
India previously raised objections to the EU’s proposal to impose duties on steel scrap exports from member nations or ban exports to non-OECD countries. The country argued that such measures constitute restrictive trade practices, highlighting the challenges faced in achieving economic development while addressing climate change.
The Waste Shipment Management policy outlines that exports of “green-listed” waste are prohibited, with exceptions for non-OECD countries under certain conditions. Countries willing to receive waste exports from the EU must demonstrate their ability to treat the waste sustainably. The EU exports approximately 20% of the scrap generated in the region due to insufficient uptake by European steel mills.
In conclusion, the proposed ban on steel scrap exports by the EU could pose a significant challenge for the steel industry in India and other developing countries. The availability of high-quality scrap is essential for transitioning to green steel and achieving more carbon-efficient production methods.
