What is the Green Steel Taxonomy?
The Green Steel Taxonomy is a newly established framework by the Indian government designed to classify steel based on its carbon emissions. This initiative aims to set clear standards that promote the production of low-carbon steel, aligning the steel industry with India’s climate objectives.
How is Green Steel Categorized?
The taxonomy categorizes green steel into three distinct tiers according to carbon emissions per tonne of finished steel (tCO₂e/tfs):
- Three-Star Green Steel (2.0 - 2.2 tCO₂e/tfs) – Represents the highest emissions within the green steel classification.
- Four-Star Green Steel (1.6 - 2.0 tCO₂e/tfs) – Features moderate emissions.
- Five-Star Green Steel (Below 1.6 tCO₂e/tfs) – Denotes the lowest emissions and is considered the cleanest category.
Any steel emitting more than 2.2 tCO₂e/tfs does not qualify as green steel.
Who Will Certify Green Steel?
The National Institute of Secondary Steel Technology (NISST) is responsible for overseeing the certification process. They will issue star ratings after conducting measurement, reporting, and verification (MRV) of emissions.
Why is the Taxonomy Important?
- Encourages Cleaner Production: It provides a benchmark for steel producers to reduce emissions.
- Boosts Competitiveness: Helps Indian steel meet international climate commitments.
- Supports Policy Development: Forms the basis for future incentives like green procurement and carbon pricing.
What Are the Challenges in Implementing Green Steel?
- High Production Costs: Green steel production is 20-30% more expensive due to the adoption of cleaner technologies.
- Limited Demand: There is a need for domestic industries to be encouraged to adopt green steel through various incentives.
- Monitoring and Verification: The system requires robust transparency and independent audits to ensure credibility.
How Can the Government Promote Green Steel?
- Incentives: Offering tax benefits and subsidies for green steel production.
- Public Procurement: Mandating the use of green steel in government projects.
- Carbon Markets: Introducing policies such as carbon pricing to reward low-emission production.
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