Professor Vikram Gandhi’s Immersive Field Course (IFC) “Development while Decarbonizing: India’s Path to Net-Zero" delved into the critical aspect of decarbonization and sustainability goals amid India's rapid development. The course presented an opportunity for students to advance their knowledge of sustainability efforts, decarbonization, and net zero in the context of a broader development agenda. The class culminated in a series of site visits in January 2024 in Mumbai and Bangalore and this is one of 14 student essays that highlights their reflections on uncovering sustainable solutions across the country.

How to juggle the challenge of developing a country of 1.4 billion people while being pressured to achieve a net zero target? As we explored India during our ten days for our Immersive Field Course, from its Financial Center in Mumbai to its Tech Hub in Bangalore, we were exposed to different players in this quest. From incumbents in traditional businesses revamping processes and technologies to account for emissions to startups creating new solutions to existing challenges such as agriculture, mobility and waste management. For some sectors, the so-called “hard-to-abate” such as Cement and Steel, the hardest challenge is to balance the need for infrastructure and the need to build it sustainably, when it currently grows emissions at 1.5% per annum.

Priority to Abate

After an early ferry ride and bus journey, that took us from the Gateway of India to the JSW Dholvi facility, around 2:30 outside of Mumbai, we met the company’s executives and learned about both their net zero commitments and how sustainability is embedded in the company’s culture, through a series of high ROI projects which also help them to reduce emissions intensity.

The view from the JSW team is that the sector should be treated as a priority to abate sector by the government given its contribution to total emission levels. However, they mentioned that, to achieve net zero, it would require them and the sector to revisit their manufacturing process. With the difficulties in reimagining the whole production process, some technologies emerge as the main avenues for tackling this problem, such as green hydrogen, top gas recovery, scrap based EAF and Carbon Capture, Utilization and Storage (CCUS).

Carbon Capture, Utilization and Storage – The Role of Policy and PPPs

Focusing on CCUS as our main topic, we’ve learned that the company currently is testing the CCU technology at a steel DRI facility, capturing around 100 tons per day. However, the overall assessment from the Chief Sustainability Officer, Prabodha Acharya, is that despite the CCUS technology being currently feasible, it is economically unviable, and it would require a lot of process innovation to make financial sense and for them to scale it. Despite the potential here, Mr. Acharya doesn’t “see it happening in the next 20 years”. However, regulation outside of India might play a role in shaping the industry and driving more CCUS adoption. The European Carbon Border Adjustment Mechanism (CBAM) approval, for instance, raises scrutiny on carbon levels and tightens procurement rules on their imports, and so to be compliant and be able to partake in the European Steel market, players in India are incentivized to adopt CCUS faster than they would be if based on the current local regulatory landscape.

To help advance CCUS, JSW believes that key players in the public sector, such as India’s Ministry of Steel and private players, such as themselves, need to come together to ultimately decide the future of CCUS in India. Therefore, Public Private Partnerships would be key in helping establish a viable market.

India has yet to decide if it will follow the US’ carrot approach or the EU’s stick approach as it pertains to carbon emissions and therefore its capture. Nevertheless, bringing in more regulation could replicate the success achieved in renewable energy, with India set to increase its clean energy capacity from its current 157GW to 497GW by 2030, as well as in water treatment, with requirements for decentralized sewage systems in buildings with more than 50 units. If it chooses to establish required thresholds (e.g. a percentage of captured CO2 to be used in a production process) for key industries, India could create incentives for high-emitting companies to invest in carbon capture and for others to buy the captured CO2.

The Challenges that Lie Ahead

Mr. Acharya broke down the current difficulties of advancing CCUS in India and JSW more specifically.

• Process Innovation: even in DRI operations that have a purer CO2 emission level, carbon is still diffused and hard to capture. In addition, for JSW, DRI is not the main production process used and the facilities are smaller.
• Utilization: there are two main challenges in how to utilize the captured carbon. The first is converting it into usable products at a competitive price. The second is finding a market to consume these products that are close enough to create a cluster and make it economically viable, with attractive unit economics for buyers. Clustering would help reduce transportation and liquefaction costs and make the supply chain frictionless as it would require no or very few investments in pipeline network.
•Storage: the difficulty of storing carbon in today’s policy environment in India is purely economic. Given there are no financial incentives, taxes nor fines, storing carbon is just pure cost for the emitting companies and just hits their bottom line, disincentivizing them to invest in this technology.

On a broad assessment, in today’s policy environment, CCUS did not present itself as the immediate main alternative to advance the decarbonization journey in steel and cement. However, seeing the combination of different projects JSW is deploying and the sustainability culture permeating all levels of the organization was very heartwarming, as well as encouraging, and showed a true concern to improve the processes and take a step forward towards producing both a greener steel and cement.