Tata Steel Eyes Natural Gas to Cut Carbon Emissions, Coal to Stay Dominant

10 Oct 2023 , 11:37 AM

Tata Steel Ltd. is looking into using natural gas to cut its carbon emissions even as it investigates long-term alternative cleaner energy options. However, despite the company’s ambitious aim to expand its manufacturing capacity, the proportion of coal in its energy mix may stay the same.

Tata Steel must simultaneously reduce carbon emissions while controlling costs as it works to quadruple its manufacturing capacity in India to 40 million tonne per year by 2030. Although the company is looking into alternative energy sources for use throughout its supply chain, they have a cost and may have an adverse effect on its earnings before interest, taxes, depreciation, and amortization (EBITDA).

‘At the moment, coal is the main fuel used to make high-quality steel in India. However, Uttam Singh, vice president of iron making at Tata Steel, said, ‘We are working on alternative energy mixes to diversify the energy basket.

By 2025, Tata Steel wants to reduce its emission intensity to under 2 tCO2/tcs, and by 2045, it wants to be ‘net zero.’ Tata Steel’s consolidated emission intensity was 2.21 tCO2/tcs as of the fiscal year 2022–2023; on an individual basis, it was 2.38 tCO2/tcs.

Steel businesses are driven to explore decarbonization in the face of the global movement for environmental responsibility as they consider the potential effects of international carbon levies on their sector.

Tata Steel is working on a long-term decarbonization strategy that includes, among other things, lowering emissions, carbon capture and utilization (CCU), hydrogen-based steelmaking, increasing the production of renewable energy, and using more scrap to make steel. But even as the business, like other producers of steel, seeks to make the technology and costs viable, it considers gas as a temporary solution.

The vice president of safety, health, and sustainability, Rajiv Mangal, stated: ‘Until hydrogen is available, we are looking to use natural gas in the furnace. Jamshedpur does not currently have access to natural gas, but it has been delivered to eastern India. To find out when natural gas may be delivered to Tata Steel’s doorstep, we are in talks with GAIL. 

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