ArcelorMittal Nippon Steel (AM/NS) India has announced a massive Rs 60,000 crore investment in its Phase-I capital expansion with the vision of being the nation's first steelmaker compliant with the government's new green steel standards.
The firm aims to increase its capacity to produce steel, enhance scrap processing capacity, and enhance the use of renewable power. AM/NS India hopes that 70% of its production will be rated three stars under the government's carbon emission intensity regulations that will be implemented in December 2024.
The National Institute of Secondary Steel Technology (NISST) will be responsible for the certification of green steel from different manufacturers. The green steel standard requires that emissions per tonne of finished steel must be less than 2.2 tonnes. Steel meeting the green standards will be rated three, four, or five stars, with five stars being the most sustainable output.
As per company officials, AM/NS India's strategic plan involves increasing its steel output in its Hazira plant in Gujarat from 9 million tonnes per year (MTPA) to approximately 15 MTPA. The company also intends to increase its scrap processing plants, including the establishment of three new ones in India, apart from the one located in Khopoli, Maharashtra.
Apart from production expansion, AM/NS is making investments in cleaner power solutions, including its green hybrid energy project in Kurnool, Andhra Pradesh, and process improvements in its steelmaking. Phase-I investment is part of the company's Rs 60,000 crore vision to become a green steel industry leader.
Arvind Bodhankar, India Chief Sustainability Officer, AM/NS, stressed that these efforts will also stand the company well to achieve the government's aggressive green steel buying targets, where over one-third of future supplies of steel to various projects would be green steel.
Today, AM/NS India currently makes approximately 60-65% of its steel through a gas-based direct-reduced iron (DRI) process, which is cleaner than conventional coal-based blast furnaces. Nevertheless, the company recognizes that more investments in green technology, such as carbon capture, utilization, and storage (CCUS), and lowering hydrogen prices are needed to achieve the four- or five-star green steel ratings.
One of the primary issues for the firm is getting adequate scrap for its recycling operations. Though India has a deficiency in scrap, AM/NS is developing scrap processing capacity and sees increased supply of scrap coming with the auto scrappage policy, growth in the building segment, as well as import of scrap. As per-capita steel use is expected to go up, generating more scrap and aiding in the company's ambitions for green steel.
Domestic ferrous scrap production rose by 8% in FY25 to nearly 32 million tonnes as per BigMint's analysis, but India continues to have a deficit of about 8.5 million tonnes and must rely on imports. Domestic scrap consumption is projected to grow to 60-65 million tonnes in FY30, as per the report, based on the increasing demand from the steel manufacturing industry.
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