‘India to contest EU carbon levy’

India plans to challenge certain provisions of the European Union’s Carbon Border Adjustment Mechanism (CBAM) as the government is concerned about its impact on steel exports from India, steel secretary Nagendra Nath Sinha said. He said certain CBAM clauses deviate from World Trade Organization norms. The steel ministry has advised importers to look at India-made steel products to substitute imports, Sinha said in an interview. The government has also set up 13 task forces to formulate a strategy for green steel production, Sinha added. Edited excerpts:

Are we on course to achieve 300 million tonnes (mt) of steel production capacity?

 Crude steel capacity in the country has increased to 160 mt in FY23 from 102 mt in FY14 despite suffering the pandemic period of two years. India’s vision to reach 300 mt of crude steel capacity by 2030 from the present level seems achievable. All major integrated steel players are working and have announced or are contemplating new capacity. I am optimistic that the target will be met. Further, to encourage industrial growth, the government, through its initiatives and policies, has been in continuous discussions with investors and stakeholders, and today, the mineral-rich states of Odisha, Jharkhand, Chhattisgarh and Karnataka are all on the threshold of witnessing significant investments in the creation of steel capacity in their states through setting up of industrial hubs/special economic zones/steel plants.

What is the outlook for steel demand in India as we have seen a global weakening of demand across countries?

 Let me share with you that backed by the government of India’s robust infrastructure programme, India’s estimated per capita consumption jumped to 87 kg in FY23 from 77 kg in FY22. India’s steel consumption grew strongly by 13% year-on-year to 119.9 mt. World Steel Association projected in April that Indian steel demand is expected to show healthy growth of 7.3% in 2023 and 6.2% in 2024. We expect that during FY24, Indian steel consumption to grow to 130-132 mt. I am confident that India will achieve the target of 158 kg per capita steel consumption by the year FY31 as set out in the National Steel Policy 2017.

What is the outlook on steel prices?

 Steel prices have moderated of late. Prices have always remained cyclical, volatile, and driven by sentiments. Due to poor global demand, prices have been depressed internationally.  With the rapid growth of steel imports from Japan, Korea, China and Russia, will the government look at restoring import duty on steel products to levels that existed before FY22 and impose safeguard duty?

 We have undertaken a detailed analysis regarding imports to see if there is any trend in imports that needs more attention. It is true that imports from the mentioned countries have increased. A sharp increase in imports will be a matter of concern. However, we don’t see that kind of situation. We are monitoring it closely. Steel being a deregulated sector, the government does not have control over markets. The government has, however, taken a lot of measures to diversify its production so that steel imports are not required. We have urged the major importers to pay attention to the growing capabilities of the Indian steel sector, which has taken a lot of strides in the past decade.

 The industry is worried about new regulations in Europe. Is the government speaking to its counterparts in Europe over CBAM?

The CBAM regulation is particularly applicable to the iron and steel sector, which is considered a polluting sector. We are concerned about the exports of steel to the European Union that will be impacted due to the regulation. To avert any adverse impact, the steel ministry has been discussing with the industry and other stakeholders. There are certain clauses in the CBAM regulation that do not seem to be in line with WTO norms. These will be taken up appropriately by the government of India.

What about the plan to reimpose export duty on steel and ores that were withdrawn in November to check price rise?

The circumstance in which the export duty was imposed was extraordinary, and the duty provided a much-needed relief to the steel users. The government has its own mechanism of monitoring domestic and international development with respect to prices of steelmaking raw materials, domestic, import and global steel prices. The policies are formulated depending on the growth of the domestic steel sector besides the impact of any price variations on the economy and the consumers of steel.

How fast are we moving to manufacture green steel?

Our ministry has formed 13 task forces to work out a strategy for green steel production in the country or define the roadmap for ‘Green Steel’. The task forces comprise experts and industry stakeholders, which will deliberate on various aspects of ‘Green Steel’ production and chalk out action points. Tata Steel has carried out trials with hydrogen injection in blast furnaces. Kalyani Steel is utilizing solar power in its electric arc furnace. Tata Steel, JSPL and JSW have also installed CO2 capture plants.

 How is the plan for the ‘Brand India’ label for Indian steel progressing?

‘Brand India’ labelling is an important exercise to differentiate Indian quality steel from others. We should recognize that the products of Japan or Germany exude quality, craftmanship and we appreciate them with well-made quality products. We, in the government, envisage cultivating a similar brand image with India-made steel. For the ‘Brand India’ exercise, we initially plan to cover a few products like hot-rolled coils with SAIL and stainless with JSL, who will run pilot projects. The current approach of the steel ministry is to ensure consensus on common branding of India-made steel among the steel players.

 How is the steel scrap generated in the country proposed to be used by the steel companies?  

Steel scrap is becoming an important commodity in the global steel trade in view of the increasing thrust on producing low-carbon steel. Aggregation of good quality scrap is an activity which can no longer be ignored. Even at present, about 15-20% of steel is produced using scrap. The government envisages increasing this quantum substantially in the forthcoming years. Steel Scrap recycling policy and Vehicle Scrapping Policy of the government of India are steps towards achieving a healthy ecosystem for scrap-based steelmaking in the country.

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Updated: 29 May 2023, 12:05 AM IST

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