Page 182 - CW E-Magazine (12-11-2024)

Special Report Special Report

Furnace (EAF) with low-carbon electri- tonne increase in steel costs would raise refl ects the increased material costs as tion, CCUS, and the adoption of clean tion, which has driven down the costs helping make wind power competitive
city or using scrap materials. the car’s price by only about $180. sustainable practices are integrated into hydrogen. of EVs over time. Tesla’s Gigafactory with fossil fuels.
building processes. has scaled up battery production, mak-
The green premium Cement industry The green premium ing EVs more affordable and accessible Public policy
Green steel production, which in- Aluminium industry Transitioning to low-carbon fuels, while improving battery effi ciency. Such Government policies are crucial
volves using technologies like hydro- The urgency of decarbonised cement including using CCUS or hydrogen innovations across the value chain – in reducing the green premium. Gov-
gen-based direct reduction, is expected In 2022, the cement industry gene- The urgency of decarbonised aluminium technologies, can add a 20-30% pre- production, shipping, and even end-of- ernments can play a pivotal role by
to see premiums between $150-300 per rated 2.6-GtCO e, accounting for 6% Aluminium is a vital metal for ad- mium over traditional fossil fuels. In life recycling – are pivotal to reducing investing in research and sustainable
2
tonne over conventional steel (differen- of global Scope 1 and 2 emissions. The vancing technology and is essential for some cases, green hydrogen production the green premium. development and incentivising the
tial of green steel and CFR steel prices) cement industry can use CCUS, clean a net-zero future, playing a key role in can drive costs up to 50% higher than private sector to follow suit. Policy
in the near term. As hydrogen-based hydrogen, and clean power to achieve electric vehicles (EVs), wind turbines, grey hydrogen production. For consu- Financing mechanisms such as carbon pricing,
steel becomes more prevalent, some decarbonisation. photovoltaics, and energy storage. In mers, the increase is less pronounced. Adequate funding drives innovation subsidies, grants, green public pro-
projections estimate that premiums 2022, the aluminium industry was re- Using cleaner fuels may translate into and transforms production methods to curement mandates, tax credits, and
could stabilize as demand grows. The green premium sponsible for 1.2-GtCO e, representing a 3-10% increase in energy bills or lower green premiums. Financial tools codes and standardsare some of the
2
In the cement sector, using low-car- 3% of global Scope 1 and 2 emissions. gasoline prices, depending on how the such as green bonds and other sustain- impactful tools for encouraging indus-
Even with a $200 per tonne cost in- bon cement can lead to aB2B green pre- To reduce emissions, the industry can additional costs are passed through. able fi nancial products can signifi cantly tries to adopt new technologies and
crease due to the adoption of green hy- mium of 40-120% per tonne of cement, adopt decarbonisation strategies such support these initiatives. Additionally, reduce emissions.
drogen, DRI technology over conven- driven by costs from carbon capture as shifting to clean power, increasing Call to action: How do we bring the banks can provide households and busi-
tional BF-BOF steelmaking, the impact and alternative materials. For end-con- the use of scrap materials, and imple- premium down? nesses with lines of credit and loans to Example of EU Emissions Trading
on fi nal products like cars, buildings, sumers, this translates into a B2C green menting CCUS. According to Bill Gates, reducing facilitate their transition to more sus- Scheme (ETS)
ships, and machinery remains minimal. premium of a 1.5-3% increase in the the green premium depends on many tainable practices. As of 2023, EU ETS remains the
For example, considering that a typical cost of building houses due to the more The green premium factors. Here are the main three: largest compliance carbon market in
passenger car in the U.S. contains expensive sustainable materials used. The cost of producing low-carbon Sustainable fi nance by European the world in terms of traded value, and
around 900-kg of steel, a $200 per The overall impact on housing prices aluminium (B2B premium in $/ton Innovation Investment Bank (EIB) it has driven gradual cross-sector emis-
of aluminium)is estimated to be 40% Achieving a low green premium The EIB has been a global leader in sions reductions. It reduces the green
higher than traditional methods, espe- hinges on developing effi cient, profi t- climate fi nancing, offering low-interest premium by making carbon-intensive
cially when using renewable energy able, and emission-free methodsfor loans for renewable energy projects. activities more expensive, incentivising
or advanced smelting technologies. manufacturing products and delivering For instance, the EIB provided substan- industries to adopt cleaner technolo-
In some regions like India and China, services. This encompasses the entire tial fi nancing to offshore wind farms, gies, thus lowering emissions and fos-
where carbon intensity is high, this value chain, including production, ship- reducing the cost of these projects and tering innovation.
could rise to nearly 100% due to heavy ping, marketing, usage, and the end-of- ABOUT THE AUTHOR
reliance on coal-based power. For end- life phase. Research and development
Fig. 3: B2B and B2C green premium in the iron and steel industry consumers, such as in the automotive and technological advancements are OmkarKajrolkar is a seasoned professional with over four years of experience
or electronics industries, the B2C pre- essential in identifying and replacing in the energy and consulting sectors. He is currently pursuing his studies at
ESCP Business School, based in the London and Paris, and as an intern at the
mium translates into a relatively mod- the processes that contribute to higher International Energy Agency (IEA). Omkar holds a Dual Degree (Bachelor’s
est increase of around 1-2% on the fi nal green premiums. and Master’s) in Chemical Engineering, specialising in Sustainability and
products. Reaction Engineering, from the prestigious Indian Institute of Technology,
One example is Tesla’s battery
Oil and gas industry technology. Tesla innovated electric Bombay. His professional journey includes three years at Reliance Industries
Ltd. and nearly a year at Ernst & Young Associates LLP.
vehicle (EV) batteries and their produc-
The urgency of the oil and gas industry
Fig. 4: B2B and B2C green premium in the cement industry In 2022, the oil and gas industry
was responsible for 5.1-GtCO e, ac-
2
counting for 15% of global Scope 1 and Missed a copy !!!
2 emissions. More than half of these For Digital Edition of this month’s issue & all other past issues
emissions originate from methane Visit www.hpicindia.com
venting, fugitive emissions, and gas
fl aring. To address these challenges, PDF copies available for download
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Fig. 5: B2B and B2C green premium in the aluminium industry elimination of gas fl aring, electrifi ca-

182 Chemical Weekly November 5, 2024 Chemical Weekly November 5, 2024 183

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