A plan to impose safeguard duty on steel imports is on, but the government will also address the concerns of the user industry, while taking a final call, steel minister H D Kumaraswamy said on Thursday.
The minister unveiled Indian standards for green steel and hinted at incentives for the producers to encourage its production. In government procurement, green steel may get preferential treatment.
Earlier this month the steel ministry had proposed up to 25% safeguard duty — in addition to basic customs duty — to protect the domestic industry from cheaper imports. The proposal had come for criticism by the users industry particularly the micro, small and medium enterprises which said that tariff increase in key raw material will increase their costs and make them uncompetitive with respect to imports, besides stoking inflation.
Imposition of safeguard duty will first require an investigation by the Directorate General of Trade Remedies (DGTR) on a formal complaint by a domestic producer backed by data establishing the extent of injury due to cheaper imports. Based on the probe findings DGTR will recommend the extent of duty. This duty then will be notified by the Central Board of Indirect Taxes and Customs (CBIC).Ministry of Finance.
India on Thursday became the first country in the world to define what qualifies as Green Steel. According to the Green Steel Taxonomy for India the carbon emission of less than 2.2 tonnes of every tonne of steel produced will be eligible to be marked as green steel. The steel produced with carbon emissions below 2.2 tonnes will be further rated from five star to three star as in the case of appliances.
Steel with carbon intensity of lower than 1.6 tonnes will be five star rated, between 1.6 tonnes and 2.0 tonnes will be rated four star and between 2.0 tonnes and 2.2 tonnes will be rated three star. The threshold limit for defining star rating will be reviewed every three years.
As companies would have to invest heavily to move to green steel production Secretary in the Ministry of Steel Sandeep Poundrik said move to green steel is not an option but the future everyone will have to move towards for the sake of the environment.
India has a target of net zero carbon emissions 2070 and the steel industry worldwide accounts for 7% of all greenhouse gas emissions. India is the second largest producer of steel after China.
He said to ease the shift to green steel that the government will provide a set of incentives.
One of the incentives he pointed to is preference in public procurement. “The government is putting a framework in place for Green Steel which will include mandates from 2030 and incentives from much earlier. The incentives would come before the green steel is made mandatory,” the secretary added.
The secretary also said that the work on the Green Steel Mission is on which will involve spending of Rs 15,000 crore by the government and will be put before approval from the appropriate authority.
While helping the country meet its carbon emission obligations, the move to green steel will also help the industry protect its export markets as big markets like the European Union (EU) has implemented Carbon Border Adjustment Mechanism (CBAM) that will impose additional duties on steel with emissions higher than its prescribed threshold. UK, US and Canada are also considering CBAM-like mechanisms.