‘For now, all steel plants focused on reducing greenhouse gases’

What are Tata Steel's short-, mediumand long-term strategies to reduce carbon footprint?

We not only report on financial outcomes but also other seven capitals — natural capital, manufactured capital, social capital, financial capital, human capital, intellectual capital and relationship capital. We have carbon-pricing mechanism, so for every new investment that we do, we measure the carbon impact of that investment.

First of all, we do a baselining, from that base line we look at whether it is increasing the base line or it is helping to reduce the baseline. Obviously, Tata Steel's sustainability principles are also embedded in the new product development process because our focus is to ensure that we have products which lower greenhouse gas emissions.

We are looking to work on switching to renewables to the extent possible. All our investments are benchmarked on carbon footprint and carbon pricing. There is a penalty, if there is any project which increases the carbon footprint and there is a premium or reward on the financials if it reduces the carbon footprint. There is a lot to do as an industry. As a company, we are also investing in technologies which actually look at steelmaking — replacing steam and electricity.

This is something which is going to be the future because one of our breakthrough R&Ds, which we are working on at Ijmuiden (the Netherlands) to produce steel from lower-grade raw materials without the need of coke-making or the agglomeration process. This would significantly reduce the carbon footprint in the future. We are currently operating on a pilot basis and working to see how it can be scaled up.

What kind of cost benefits does the new technology have?

If we are producing steel from lowergrade raw materials, it will help in lowering your raw-material cost. For example, if we are today working with an iron content of 62-65 per cent and if you can work with an iron content of say 40-45 per cent, it reduces cost significantly because you are working with an inferior-grade iron ore. Similarly, if you are working without the need for coke-making or you don't have to do agglomeration processes, there are ways in which it can be certainly have both capex benefit, opex benefit and benefit on carbon footprint. We have been working for the last maybe five-six years. Now it has got on to a real pilot plant.

But this is a different technology?

This is the HIsarna project. When we look at incremental volume in the future, when we find the answers to scalability, we will look at it. So, for now, existing plants across Tata Steel Group are focused on reducing greenhouse gases, reducing water, reducing energy intake, being more efficient both in work practices and adoption of technology, etc. When Tata Steel finds the answer to the scaling-up issue of HIsarna, then we will be looking at new capacity which can come through that route. So that is a completely new paradigm.

What is the level of awareness in India on the importance of climate change and its impact on business? There is no other Indian company in TCFD.

As far as the TCFD is concerned, I was the only Indian on the task force but that does not take away the importance of the subject. End of the day, the country has signed for compliance with the Paris agreement.

I think there are Indian companies that are conscious of this. I have seen some of them having disclosures and planning and deployments which are focused on reducing carbon footprint and water intake and natural resources. We need to have more and more communication and this is not to just top 30 or 50 or 100 companies.

“IF WE PRODUCE STEEL FROM LOWER-GRADE MATERIALS, IT WILL HELP IN LOWERING YOUR RAW MATERIAL COST”