Understanding the demand for Green Steel, page-198

https://www.mobilityoutlook.com/features/green-steel-critical-for-auto-component-makers-kalyani-steel/




Auto component makers will be early adopters of green steel, even ahead of vehicle manufacturers, according to R K Goyal, Chairman, Saarloha Advanced Materials.This is because many are already shipping out parts to Europe. 'We have a very large component industry which is exporting parts worth $20 billion,' he said.Incidentally, the European Union is a few months away from levying a carbon tax on components not made with green steel. By definition, steel is termed green when its production does not include use of fossil fuels. 'It is just a matter of time before component makers will have no option than to use green steel,' added Goyal.

At present, there are no regulations or laws mandating the use of green steel in India. Neither are there incentives or promotional schemes encouraging its adoption by organisations. 'Unless there is some directive from the Centre, companies might not start using green steel,' said Goyal.In his view, adopting green steel is more an opportunity than a challenge for OEMs. This is because many developed nations might follow Europe's example of imposing carbon cess not just on components made up of conventional steel, but also on vehicles not made with green steel.

'Companies willing to pay carbon cess will have to settle with lower net realisations,' said Goyal. For the record, the carbon tax on components and vehicles made with conventional steel might range between €100 and €200 per ton in Europe. Green steel producers will also have to address the problem of increased downtime in production as electric furnaces and other equipment used in the process need to be rested longer than conventional coal-powered furnaces."