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Govt eyes steel units’ residual gases to produce clean energy

Govt eyes steel units’ residual gases to produce clean energy


The steel ministry is exploring the possibility of converting residual gases from steel units to produce renewable power as part of the government’s focus on shoring up clean energy supplies.

Residual gas from coke ovens, as well as blast furnaces in integrated steel plants, can be converted into clean energy, a senior government official told Moneycontrol. The idea still at a nascent stage and the ministry will take it up with government-backed think tank NITI Aayog, as well as the power ministry to work on its feasibility.

The steel ministry has also taken up the key inter-ministerial policy-related issues with NITI Aayog, with topics ranging from railway freight rates to removal of coking coal from clean energy cess, the official said. The think tank is examining these issues and would present its views soon.

The ministry has sought removal of clean environment cess on coking coal as domestic manufacturers were unable to pass on the price increase to buyers because of stiff competition. The domestic steel industry is strongly opposed to the environment levy on coking coal as a surge in international prices of the fossil fuel has only added to the woes of the steelmakers, the official said. The levy on coal, including thermal and coking coal was doubled to 400 rupees per tonne in the Union Budget for 2016-17.

The steel ministry has claimed that coking coal—key raw material in the steel-making process—does not pose any danger to the environment, unlike thermal coal, which is used by power producers. According to the official, unlike steelmakers, power producers have an option to switch to alternative sources of energy, including solar and wind and is not a possibility for steelmakers.

The ministry had already taken up this matter with the coal ministry and has now sought NITI Aayog’s view on it. In addition, the think-tank is examining the ministry’s plea to the railway ministry to lower the freight rates for ferrying iron ore, key material in steel production. The local industry has argued that iron ore is also a key raw material, similar to coal, and, therefore should be eligible for lower freight rates as the latter. The proposal, if accepted by the railway ministry, can make freight rates cheaper for local steel producers, already grappling with issues related to high debt and steep raw material cost.

Anand Gupta Editor - EQ Int'l Media Network


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