Indian steel producers need to ramp up scrap-based steel production in the country to reduce extraction of natural resources—like iron ore and coking coal—and cut carbon emissions thereby.

National Steel Policy 2017 aims to develop a globally competitive steel industry by creating 300 MT a year steel production capacity by 2030 with a contribution of 35-40% from the EAF route. Steel scrap comes from various sources like mill scrap, used structural items like beams, reinforced steel and plates, plant and machinery including pipes, tubes, old vehicles, domestic goods, automotive scrap, shipbuilding industry and railways.

ArcelorMittal Nippon Steel (AM/NS) India plans to establish steel scrap processing centres across the country, while Tata Steel is setting up electric arc furnace (EAF)-based recycling plants. JSW Steel's plant in Dolvi plant will also use scrap steel as its feed.

As part of AM/NS India's plan to reduce emission intensity by 20% by 2030, the global steelmaker aims to increase scrap use to around 10% by 2030 from 3-5% currently. The company has also set out plans to establish several steel scrap processing centres across the country to participate in a circular economy for steel.

In September last year, JSW Steel increased its stake in NSL Green Steel Recycling Ltd to 100%, acquiring joint venture partner New Zealand's metal recycler NSHL's 50% stake. The primary objective of NSL is to establish scrap shredding facilities in India, starting with a plant in Khalapur, Maharashtra, which would supply scrap to JSW Steel's plant in Dolvi in the form of baled or bundled scrap. The project is slated for commissioning in FY25. The steelmaker will replicate it at other steel plants.

Tata Steel's first EAF plant is coming up in Ludhiana with a capacity of 0.75 million tonne (MT). The steelmaker will set up similar furnaces in other parts of the country as part of its plan to increase domestic manufacturing capacity to 36 MT a year.

Tata Steel commissioned its first steel recycling plant of 0.5 MT in Rohtak, Haryana, in 2021 in collaboration with Aarti Green Tech Ltd on a build-own-operate partnership. The facility is equipped with a shredder, baler, and material handler among others. The scrap is being procured from various market segments such as end-of-life vehicles, obsolete households, construction and demolition and industrial.

The steelmaker also plans EAF-based steelmaking at its Port Talbot site in South Wales with a capital cost of £1.25 billion. UK government has announced a $621 million support package for Tata Steel's proposal.

The use of every tonne of scrap shall save 1.1 tonne of iron ore, 630 kg of coking coal and 55 kg of limestone, according to Steel Scrap Recycling Policy. There will be considerable savings in energy consumption. It also reduces water consumption and greenhouse gas emissions by 40% and 58% respectively.

India's scrap consumption rose 12% to 29 MT in 2023, but the country does not produce enough scrap domestically. Hence, demand is met from abroad. Imports of ferrous scrap for steelmaking stood at around 9.8 MT in FY23, compared with around 3.6 MT in FY22. The country imported about $12 billion worth of metal scrap in 2022, more than double the amount from just five years earlier.

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