Tata Steel Ltd is actively exploring ways to reduce its carbon emissions, with a focus on transitioning to gas in the short term, while also considering other cleaner energy options for the future. Despite its ambitious plan to double its manufacturing capacity, the company is challenged to balance emissions reduction with cost efficiency. Coal remains the primary fuel for steel production in India, but Tata Steel is diversifying its energy sources to achieve its emission reduction goals.

The company is working on initiatives such as carbon capture and utilisation, hydrogen-based steelmaking, increased use of renewable energy, and incorporating more scrap in steel production. In the interim, Tata Steel is looking into natural gas as a viable alternative and is in discussions with GAIL to source liquefied natural gas (LNG) to replace a portion of diesel used in its Heavy Earth Moving Machinery (HEMM) at its mines. Additionally, the company has signed agreements with Indian Oil Corporation Ltd to use liquefied petroleum gas (LPG) in place of furnace oil and high-speed diesel at its ferroalloy plants, starting in Odisha.

While Tata Steel explores the potential of hydrogen as a fuel, it is also engaging with government agencies and startups to enhance its expertise in the hydrogen space. The company is mindful of the challenges, such as infrastructure and cost-effectiveness, associated with transitioning to alternative fuels. Despite these hurdles, Tata Steel is committed to decarbonisation, driven by societal pressure and regulatory demands, including the implementation of the Carbon Border Adjustment Mechanism (CBAM) by the European Union. Tata Steel acknowledges the need for strategic decisions that balance environmental responsibility with stakeholder interests, taking into account fluctuating fuel prices and market conditions.

Source: Money Control