Doing more with LessCoal Efficiency and GHG Intensity enhancement

potential for the Steel Sector in India

Institutional Mentor / Partner

Lead Researchers: Dr. Amit Garg, Vivek GilaniCo-Researchers: Gyan Prakash, Saumya Aggarwal, Bhaskar Govindrajan, Udit Bansal

Facts from India Coal Market Watch – August 2011

Domestic coal production target for 2011-12 is 554 mt

India adds 1660 MW generation capacity in July (all Thermal Power)

Indian plants exceed power generation target in July 2011

Coal India Ltd (CIL) reported a 64.06% rise in profit after tax (PAT) during the first quarter (April-June) of 2011-12

So far so good……………..

Facts from India Coal Market Watch Out! – August 2011

India’s coal import in 2011-12 likely at 137.03 mt

The import of coking coal through Paradip port on the eastern coast of India surged by almost 4,10,095 tons in July 2011 to 6,68,574 tons as compared to 2,58,479 tons in June 2011

Imports of PCI coal through Vizag port in July 2011 stood at 1,13,467 tons, which was higher by 86,764 tons than 26,703 tons imported in June 2011

The imports of Low Ash Metallurgical (LAM) coke through Paradip port in the month of July 2011 rose sharply to 60,590 tons compared with 6000 tons in June 2011

171 coal mining proposals involving 28,862 hectares of forest land are awaiting forestry clearance as on June 30, 2011

44 projects of Coal India Ltd (CIL) stuck under Comprehensive Environment Pollution India (CEPI) norms introduced by MoEF

Question?

Can the most efficient users of coal in India’s

Steel Sector help -

increase India’s Energy Self-Sufficiency,

meet it’s Climate Change Commitments,

and also save some Forests in the bargain?

Trends - GHG Intensity of Production in Sample Steel Companies

Coking Coal40%

Coal26%

Steam Turbines12%

Coke3%

Non-Coking Coal2%

Grid Electricity12%

Combined Others5%

Indian Steel Sector - GHG Emissions Sources (2010)

Trends - GHG Intensity of Production in Sample Steel Companies

Company NameProduction GHG Intensity 2008

Production GHG Intensity 2009

Production GHG Intensity 2010

tonnes CO2e/tonne product

tonnes CO2e/tonne product

tonnes CO2e/tonne

J S W Steel Ltd. 1.275 1.528 1.432Steel Authority of India ltd. 1.554 1.619 1.537Jindal Steel & Power Ltd. 2.943 2.971 2.666Tata Steel Ltd. 1.875 2.269 2.100

Essar Steel Ltd. 0.541 1.334

J S W Ispat Steel Ltd. 0.319 0.368 0.292Bhusan Steel Ltd. 0.367 0.641 0.695J S L Stainless Ltd. 0.616 0.601

Monnet Ispat & Energy Ltd. 2.675 4.060 4.578M S P Steel & Power Ltd. 3.838 3.636 2.583Mukund Ltd. 0.911 2.790 0.966Jai Balaji Industries Ltd. 0.377 0.445 0.441Kalyani Steels Ltd. 0.776 0.837 0.647Electrotherm (India) Ltd. 0.838 0.965 1.591Lloyds Steel Industries Ltd. 0.651 0.746 0.693I S M T Ltd. 0.670 0.743 0.963Ankit Metal & Power Ltd. 1.265 1.431 0.942Shah Alloys Ltd. 0.799 1.414 1.542Tulsyan N E C Ltd. 0.363 0.377 0.313

Mittal Corp. Ltd. 0.288 0.454 0.534Narbada Steels Ltd. 0.636 0.760 0.813Anil Special Steel Industries Ltd. 0.716 0.816 0.713Facor Steel Ltd. 1.014 1.150 1.459Gallant Metal Ltd 1.713 1.841 1.772

Sr. No. Parameter 2008 2009 2010

  SAMPLE Companies      

1 Total Production - SAMPLE Companies (mt Steel) 68.4 66.1 77.5

2 Sample: Universe Ratio 81% 82% 82%

3 Coal Use (Direct + Indirect) - SAMPLE Companies (mt Coal) 34.7 42.4 43.7

4 GHG Emissions (Total Production) - SAMPLE Companies (mt CO2e) 91.7 106.4 112.5

5 Potential Coal Savings w. BPT Replication - SAMPLE Companies (mt Coal) 25.3 29.8 29.4

6 Potential GHG Mitigation w. BPT Replication - SAMPLE Companies (mt CO2e) 72.0 82.0 84.5

7 % Coal Intensity Improvement- Steel Sec. 73% 70% 67%

8 % GHG Intensity Improvement- Steel Sec. 79% 77% 75%

  ENTIRE Steel Sector (Liquid Steel Production)      

9 Total Production - Steel Sec. (mt Steel) 84.6 80.6 94.4

10 Coal Use (Direct + Indirect) - Steel Sec. (mt Coal) 42.9 51.7 53.3

11 GHG Emissions (Total Production) - Steel Sec. (mt CO2e) 113.5 129.6 137.1

12 Potential Annual Coal Savings through BPT Replication (mt Coal) 31.3 36.3 35.8

13 Potential Annual GHG Mitigation through BPT Replication - mt CO2e 89.1 100.0 102.9

14 % Target of Annual GHG Emissions Mitigation (COP15 commitment) 139.3% 156.2% 160.8%

Coal Efficiency & GHG Intensity Enhancement in Steel Companies

50%

70%

90%

110%

130%

150%

170%

190%

10

30

50

70

90

110

130

150

2008 2009 2010

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Year

Steel Sector Coal Savings, GHG Intensity Reduction and COP15 Commitment Opportunities -2008-2010

Coal Savings GHG Mitigation COP-15 Committment

Source: Mckinsey – Environment and energy sustainability: An approach for India

Energy Efficiency measures

Process efficiency – sinter plant heat recovery, coal moisture control

Optimized energy use - pulverized coal injection, coke dry quenching and recovering waste heat

Fuel Shift

Substituting coke used in BF/BOF furnaces with fuel based on biomass (charcoal)

Replacing 10% of coke as the primary blast furnace tool

Technology Changes

Direct smelting remove need for coking plants Challenge – Issues with technologies need to be resolved

Scrap based steel making 1/3 energy required by standard blast furnace Challenge – if 10% of the total production moved to this system

70% of India’s steel would need to be recycled which involves a economic cost

Gas based direct reduced iron Challenge: Availability of gas to steel plants

Cogeneration – gas from the BOF/BF process is recovered, cleaned and used for power generation

Energy Self-Sufficiency and Indian Steel Sector

Coking coal prices at $225 a ton for the second quarter beginning July 2010 compared with $129 a ton level in 2009-10

Very high dependency on Australia for coking coal

Energy Self-Sufficiency: India would need 2.4 billion tonnes of steel/yr by 2030 which would assume India would need to import 40% of its coal needs

Learnings and Way Forward Best practice gap in terms of GHG Intensity of Production from Coal for

Cement Industry: increased from ratio of 13.4 to 15.7 in 3 years.

Best Practice Technology (BPT) replication achievable realistically using off-the-shelf technologies in India

BPT replication in Steel Industry alone can yield 36 million tons of coal saving and reduce India’s imports dramatically

BPT replication from merely this sector can help India achieve more than 100% of its GHG Emissions commitment to COP15 (reducing GHG intensity of the GDP by 20%-25% by 2020)

Thus, despite being a proactive environmental research and outreach body – not anti-coal as a fuel – but a rational promoter of the roadmap to do more with the lessening coal we have in India and globally.

Need of the hour – process optimisation technology sharing amongst the Steel Industry and active promotion and incentivisation of efficient users of coal and low-GHG intensity steel on platforms such as coaljunction and metaljunction.