Circularity in the steel value chain

This article is authored by Rajiv Mangal, vice president, safety, health and sustainability, Tata Steel.

Before we hit the middle of the current century, most major steel producers in India expect to become net-zero companies, meaning the carbon we produce and set-off will balance out. Steel is an asset-heavy and natural resource-intensive business. It is also still largely a commodity business, meaning it is subject to strong price fluctuations on the demand side. When we bring these facts together, what we get is a business that is a hard-to-abate greenhouse gas emitter; one that not only has to be competitive and profitable but also become environmentally sustainable. Today the steel sector accounts for 7-9% of global carbon emissions, and if left unchecked, the sector alone is set to account for nearly 35% of fossil fuel-related emissions by 2050. Building an environmentally sustainable steel industry is also in some ways forced by carbon taxes on steel products in large markets like Europe. In plain speak, we have little choice but to become net-zero in the earliest possible time frame, for any number of reasons we may choose finally. 

Steel(Reuters)

In a linear value chain, the one we are moving away from, it is largely a take-make-discard system that is not sustainable. The circularity we seek in our industrial processes may seem like a new idea, but in essence it is a replication of what we see in nature. For instance, water and nutrients in the soil that are so fundamental for our existence, are in fact continuously recycled. Global steel producers, including the ones in India have embarked on building a circular value chain in which resources in all shape and form are given an extended life to the maximum extent possible.  

Steel, which is the end output, by itself can have an infinite life through recycling, thus saving on raw materials, energy, and other resources. Companies are actively pursuing a sustainable future by transitioning to low-carbon steel plants, specifically scrap-based electric arc furnace facilities. They are also committed to maximising resource efficiency by ensuring that most materials used in steel production are recycled, reused, or reduced through more efficient processes.  

Energy released (as heat) from the steelmaking process is captured and reused, while water discharged is treated and repurposed for industrial use and afforestation projects. Large steel plants are also increasingly relying on renewable energy sources like solar, wind and hydro power to not only run their plants but also use them in transporting raw material and finished goods by using electric vehicles and biofuel-powered shipping. 

In our own experience, Tata Steel has successfully replaced thousands of tonnes of fossil fuel with biochar (biomass-based charcoal). We are doing this by supporting local farmers grow bamboos, thus also creating fresh livelihood opportunities for community members. Additionally, we are setting up our first large scale scrap-based electric arc furnace (EAF) in Ludhiana, India. This commitment to reduce carbon footprint extends beyond India. 

Large steel makers are also increasingly relying on digitalisation of the value chain to meet their sustainability goals.  This is today done through the integration of Artificial Intelligence (AI) and Industry 4.0 technologies. With the help of numerous AI models across the value chain, steel companies are able to enhance yield, throughput, and quality while reducing energy consumption and emissions. 

The key to creating a more sustainable steel industry lies in understanding and implementing circularity in the entire value chain. In doing so, every aspect of the steelmaking process from mining raw materials to recycling finished steel, and everything in between will have to be seen through the lens of sustainability.

This article is authored by Rajiv Mangal, vice president, safety, health and sustainability, Tata Steel.