Acutely conscious of the hard-to-abate nature of steel, Tata Steel accords due importance to sustainability. It has been recognised as Sustainability Champions by the World Steel Association for five consecutive years. The Indian multinational steelmaker has been consistently ranked amongst top 10 steel companies in the Dow Jones Sustainability Indices (DJSI) Corporate Sustainability Assessment since 2016. The company is working towards reducing carbon emissions through several processes and initiatives. Speaking to Outlook Business TV Narendran, global CEO and Managing Director of Tata Steel, details how the company is integrating ESG targets in its operations. Edited excerpts:
Tata Steel Limited and Tata Steel Europe have been recognised as 2022 Steel Sustainability Champions by the World Steel Association for the 5th consecutive year. What is your next goal?
Though we are in a hard-to-abate sector, yet we are already in a leadership position in sustainability practices in India and Europe and we want to continue to be a leader and lead the way as far as decarbonization and good ESG (Environment, Social and Governance) practices are concerned. The vision of Tata Steel is to be a benchmark in value creation and corporate citizenship.
You plan to achieve a carbon emission intensity of less than 2 metric tons by 2025. What is the roadmap to meet the target?
Our Jamshedpur plant is already at 2.25; it’s a benchmark in India. There are multiple steps being taken in terms of the kind of raw materials that we use, and many other initiatives to make sure the energy efficiency continues to improve. Our new plants that we have acquired in Angul, Odisha, and the Usha Martin plant in Gamharia are lagging in this journey. They also have undertaken various initiatives and by 2025 we are confident of reaching the 2 metric ton level. We are also starting a new process route which is recycling-based steelmaking. We have set up our first steel recycling plant in Rohtak, Haryana in the North and in the next 2-3 years this route will also enable a much lower carbon footprint than the blast furnace based process route that we largely follow now. So, going forward, we will have more recycling-based plants set up in the North, West and South of India, which will help bring the average down because a recycling based plant has a carbon footprint of 0.4 to 0.5 tons per ton of steel. As we have more and more of that in the mix the average will come down to 2. Our goal is reach the target of 2 by 2025, and 1.8 by 2030.
We understand that in a hard to abate sector like steel, green hydrogen and even carbon capture and storage technology are going to play a key role. What are you doing on this front?
All these technologies are available but these need to be scaled up in order to become competitive. We have a number of pilots going on carbon capture and usage. For carbon capture and storage in India, we need to do the geological mapping in more detail to see where good storage is possible. In a place like the Netherlands you can store in the North Sea Oil wells but then you need to build that infrastructure to take the gas/ CO2 to those oil wells. In India storage is not yet evolved as an option because we don’t know yet where it can be stored. Regarding usage, we are already working with a lot of startups. We’ve already set up a pilot plant to capture the blast furnace gases, extract CO2 & Hydrogen and use it within the existing process.
For green hydrogen, firstly you need it to be available; secondly it should be available at $1 a kilo and we are a long way from there, and thirdly it should be available in the East. So it’s not just about producing hydrogen, it also needs to be stored and transported because most of the steel capacity – where the blast furnace route is used will come up in the East. If you need to substitute coal with hydrogen and convert iron ore into steel then you need to have hydrogen available in the eastern part of the country. We are at least 10 years away from all that. So when gas and hydrogen are available in the East, we will convert those sources.
Can we infer from this that your plants abroad will be ahead of the plants in India on decarbonisation?
Yes, because in Europe the policy framework is already there. The support infrastructure is being built, and the European governments and the European Union are also bringing in carbon border adjustment mechanisms. There is already carbon pricing. So there are multiple actions which Europe has taken over the last decade which have made Europe the leader in this transition. It is leading the rest of the world and our experience in Europe will help us transition faster in India when the decarbonisation ecosystem is in place.
Tata Steel has had its share of controversies in the past regarding displacement and pollution in India and abroad. How did you manage to address those and what is the learning?
There are no shortcuts. If the community feels that there is a disconnect between you and them, then you have to work hard to build that trust. When we started the Kalinganagar plant (in Odisha), the government was trying to help us, there was a firing incident and some people died. So, it took us five years to build that equation with the community and get the plant started, but we did not give up despite the problems. One of the learnings we have is when you go to a new site you really need to start from scratch and not go with the assumption that because you have done a good job on another site you will be welcomed. We sensitize our senior managers on the subject, expose them to the challenges of the community, and not just assume that it is for the CSR team to sort out these problems. In Kalinganagar we did a programme for all the senior managers to expose them to the challenges that the communities were facing so that they are conscious while making decisions.
Tata Steel has been ahead on the governance part of ESG. How are you integrating the other two – environment and social parts – in your operations and strategy now?
On governance, we are generally rated quite well. We take care of the shareholders, the independent directors who are representing the shareholders, and the non-promoter shareholders. Tata Steel was the first company in India to have an Integrated Report about six years back. We have in the past subjected ourselves to social audits many times. So, I think in many ways and through many practices, we try to really stay up there and we are always looking for opportunities to keep improving.