1. Doing more with Less Coal Efficiency and GHG Intensity enhancement potential for the Steel Sector in India Institutional Mentor / Partner Lead Researchers: Dr. Amit Garg, Vivek Gilani Co-Researchers: Gyan Prakash, Saumya Aggarwal, Bhaskar Govindrajan, Udit Bansal

2. Facts from India Coal Market Watch – August 2011  Domestic coal production target for 2011-12 is 554 mt  India adds 1660 MW generation capacity in July (all Thermal Power)  Indian plants exceed power generation target in July 2011  Coal India Ltd (CIL) reported a 64.06% rise in profit after tax (PAT) during the first quarter (April-June) of 2011-12 So far so good……………..

3. Facts from India Coal Market Watch Out! – August 2011  India’s coal import in 2011-12 likely at 137.03 mt  The import of coking coal through Paradip port on the eastern coast of India surged by almost 4,10,095 tons in July 2011 to 6,68,574 tons as compared to 2,58,479 tons in June 2011  Imports of PCI coal through Vizag port in July 2011 stood at 1,13,467 tons, which was higher by 86,764 tons than 26,703 tons imported in June 2011  The imports of Low Ash Metallurgical (LAM) coke through Paradip port in the month of July 2011 rose sharply to 60,590 tons compared with 6000 tons in June 2011  171 coal mining proposals involving 28,862 hectares of forest land are awaiting forestry clearance as on June 30, 2011  44 projects of Coal India Ltd (CIL) stuck under Comprehensive Environment Pollution India (CEPI) norms introduced by MoEF

4. Question? Can the most efficient users of coal in India’s Steel Sector help - increase India’s Energy Self-Sufficiency, meet it’s Climate Change Commitments, and also save some Forests in the bargain?

5. Trends - GHG Intensity of Production in Sample Steel Companies

7. Sr. No.Parameter200820092010 SAMPLE Companies 1Total Production - SAMPLE Companies (mt Steel)68.466.177.5 2Sample: Universe Ratio81%82% 3Coal Use (Direct + Indirect) - SAMPLE Companies (mt Coal)34.742.443.7 4GHG Emissions (Total Production) - SAMPLE Companies (mt CO2e)91.7106.4112.5 5Potential Coal Savings w. BPT Replication - SAMPLE Companies (mt Coal)25.329.829.4 6Potential GHG Mitigation w. BPT Replication - SAMPLE Companies (mt CO2e)72.082.084.5 7% Coal Intensity Improvement- Steel Sec.73%70%67% 8% GHG Intensity Improvement- Steel Sec.79%77%75% ENTIRE Steel Sector (Liquid Steel Production) 9Total Production - Steel Sec. (mt Steel)84.680.694.4 10Coal Use (Direct + Indirect) - Steel Sec. (mt Coal)42.951.753.3 11GHG Emissions (Total Production) - Steel Sec. (mt CO2e)113.5129.6137.1 12Potential Annual Coal Savings through BPT Replication (mt Coal)31.336.335.8 13Potential Annual GHG Mitigation through BPT Replication - mt CO2e89.1100.0102.9 14% Target of Annual GHG Emissions Mitigation (COP15 commitment)139.3%156.2%160.8% Coal Efficiency & GHG Intensity Enhancement in Steel Companies

9. Source: Mckinsey – Environment and energy sustainability: An approach for India

10. Energy Efficiency measures  Process efficiency – sinter plant heat recovery, coal moisture control  Optimized energy use - pulverized coal injection, coke dry quenching and recovering waste heat Fuel Shift  Substituting coke used in BF/BOF furnaces with fuel based on biomass (charcoal)  Replacing 10% of coke as the primary blast furnace tool

11. Technology Changes  Direct smelting  remove need for coking plants  Challenge – Issues with technologies need to be resolved  Scrap based steel making  1/3 energy required by standard blast furnace  Challenge – if 10% of the total production moved to this system 70% of India’s steel would need to be recycled which involves a economic cost  Gas based direct reduced iron  Challenge: Availability of gas to steel plants  Cogeneration – gas from the BOF/BF process is recovered, cleaned and used for power generation

12. Energy Self-Sufficiency and Indian Steel Sector  Coking coal prices at $225 a ton for the second quarter beginning July 2010 compared with $129 a ton level in 2009-10  Very high dependency on Australia for coking coal  Energy Self-Sufficiency: India would need 2.4 billion tonnes of steel/yr by 2030 which would assume India would need to import 40% of its coal needs

13. Learnings and Way Forward  Best practice gap in terms of GHG Intensity of Production from Coal for Cement Industry: increased from ratio of 13.4 to 15.7 in 3 years.  Best Practice Technology (BPT) replication achievable realistically using off- the-shelf technologies in India  BPT replication in Steel Industry alone can yield 36 million tons of coal saving and reduce India’s imports dramatically  BPT replication from merely this sector can help India achieve more than 100% of its GHG Emissions commitment to COP15 (reducing GHG intensity of the GDP by 20%-25% by 2020)  Thus, despite being a proactive environmental research and outreach body – not anti-coal as a fuel – but a rational promoter of the roadmap to do more with the lessening coal we have in India and globally.  Need of the hour – process optimisation technology sharing amongst the Steel Industry and active promotion and incentivisation of efficient users of coal and low-GHG intensity steel on platforms such as coaljunction and metaljunction.