Developing countries’ achievement of Net Zero goals depends on technology transfer & access
A massive transition towards clean energy is underway in the global industrial sector. Steel and cement are considered hard-to-abate sectors due to their major reliance on fossil fuels and limited financial and technical options for aligning with Net Zero targets declared globally. The challenge becomes bigger for developing countries, encompassing the need for a just industrial transition.
In India, these sectors significantly contribute to the gross domestic products and exports, and are core inputs for satisfying the growing economy, population and urbanisation.
India is the second-largest producer of crude steel (around 120 million tonnes) and cement (around 340 million tonnes), only behind China. Estimates suggest that owing to the rising demand, India’s steel and cement production capacity will surge to around 300 million tonnes and around 660 million tonnes, respectively, by 2030. The steel sector contributes around 5 per cent and the cement sector around 6 per cent to India’s greenhouse gas (GHG) emissions.
The technology used in these production processes is critical to determine whether this sector will achieve decarbonisation and Net Zero goals. Recent reports by the Centre for Science and Environment estimated that GHG emissions can be reduced in steel (around 64-79 per cent) and cement (around 42 per cent) sectors by 2030. However, technology and resource development, access and transfer will play a key role in achieving these reductions.
Developing countries have low research & development spending, especially in technology for cement and steel. As such, their achievement of Net Zero goals depends quite a lot on technology transfer and access.
But technology transfer from developed to developing countries has been a thorny issue since adoption of the United Nations Framework Convention of Climate Change (UNFCCC) in 1992. Limited progress has been made to ensure technology is shared evenly.
Steel and cement R&D spending in India, EU, Japan and China (2020-2022)
| Country / region | R&D (billion $) |
Share of GDP spent on R&D | Steel sector R&D (billion $) |
Cement sector R&D (billion $) |
| India | 15.4 | 0.64 per cent (2020-21) | 68.7** | Unknown |
| EU | 381.3 | 2.22 per cent (2021-22) | Unknown | Unknown |
| Japan | 131.18 | 3.59 per cent (2020-21) | Unknown | Unknown |
| China | 430.8 | 2.43 per cent (2020-21) | 22.1*** | 8.8* |
*This amount is for general non-metallic mineral products
** Steel R&D has been calculated summing the R&D expenditure of the top four companies in the sector: JSW, Tata, SAIL and Arcelor Mittal Nippon Steel
***China’s ferrous metals only
Tech interventions for decarbonising India’s steel sector
To understand the technological requirement for decarbonising the Indian steel industry it is essential to identify the biggest source of emissions in the Indian steel sector.
CSE’s study on decarbonising India’s steel sector revealed that as of 2020-21, the steel produced from blast furnace-basic oxygen furnace (BF-BOF) route contributed 42.7 per cent and the coal-based scrap / direct reduced iron with green hydrogen and the electric arc furnace (scrap / DRI-EAF) route contributed 51.1 per cent of the emissions from the steel sector in India.
The individual emission intensity of these two technology routes was also the highest compared to other alternate routes. This clearly showed that the blast furnace and production of DRI from coal were the biggest areas of intervention when it comes to decarbonising India’s iron and steel sector.
Globally, the clean steel production pathways are emerging around scrap / DRI-EAF route. However, India is expanding its share of BF-BOF technology. As coal-dependent countries like China are actively considering increasing its share of steel from EAF from below 10 per cent to 20 per cent by 2030, India plans to decrease its share of EAF / IF steel from the current 50 to 55 per cent to 30 to 35 per cent by 2030.
India’s choices are said to be closely linked to the rising prices of natural gas and the limited availability of domestic steel scrap, leading to its dependence on coal / coke in both DRI-EAF / IF and BF-BOF technologies.
Four major areas need technology interventions. First and the most essential area for tech intervention would be development of a cleaner fuel-based technology for the small scale DRI plants in India. Currently, most of them operate rotary kilns that are dependent on coal. A big breakthrough is required to bring out a technology of the required scale that could operate on cleaner fuels like synthetic gas, natural gas and hydrogen, with minimal disruption to their livelihoods.
The second area of intervention is the technology required to reduce the emission intensity of India’s current and upcoming fleet of blast furnaces, which is a harsh reality. The average CO2 emission intensity of BF-BOF technology route in India is 2.5 tonnes of CO2 per tonne of crude steel. A number of fuel and raw material beneficiation technologies, technologies to improve energy efficiency and path-breaking furnace technologies are needed to bring the emission intensity of Indian BF-BOF plants lower.
The world’s most efficient blast furnaces operate at an emission intensity of 1.4-1.5 tonnes of CO2 per tonne of crude steel. Carbon capture, utilisation and storage (CCUS), if becomes feasible in India, could further play a role in managing the rest of the emissions from this route.
Thirdly, it’s important to develop affordable electrolysers and related technologies that are required to increase the possibility of producing green hydrogen based DRI-EAF steel in the country. This is the cleanest steel-producing technology world over which has to be adopted overtime. We call this intervention crucial because the sooner this picks up, the earlier the technological trajectory of Indian steel could witness a shift.
Last but not the least, technology interventions are also required to set up a well-equipped steel scrap collection, processing and management infrastructure in the country. As the domestic scrap generation grows in India, it becomes essential to develop a formalised system for proper accounting, handling and using steel scrap to decarbonise the Indian steel sector.
Tech to decarbonise India’s cement sector
The larger part of emissions in a cement plant are due to the use of limestone as a raw material (responsible for almost 50-55 per cent emissions in a plant) and the use of coal and pet coke to fire the kiln (responsible for 35-40 per cent of emissions in a plant), which produces clinker from limestone. Clinker then becomes the main ingredient to produce cement.
The Indian cement sector has demonstrated a good set of interventions in the past in terms of replacing limestone with fly ash and slag and in improving its energy efficiency. Replacing limestone with other cementitious materials will be a key driver of decarbonisation in the sector. A major intervention would be to increase the limit of fly ash in Portland Pozzolana Cement (PPC) from 35 to 45 per cent. PPC is the largest share of cement type produced in India.
The key technological intervention for decarbonising the cement sector would be the electrification of the kiln which could operate on renewable energy. Currently, India does not have any commercial / pilot kiln in cement plants that runs on electricity.
Ultratech Cement in 2022 entered into a collaboration with a Finland based company Coolbrook to implement their roto dynamic heater kiln electrification technology which heats the kiln by using renewable energy. The companies had said that they expect to begin its commercial use by 2024, although not much has been reported on it since then.
In 2024, a similar strategic cooperation agreement happened between Jindal Steel Works and Coolbrook on implementing their roto-dynamic heating technology at JSW’s steel and cement manufacturing sites at Vijayanagar Works in Karnataka, India.
The challenge was that for such technologies, India is dependent on foreign companies and the upfront costs for such technologies are also significant. The larger plan is to also add carbon capture to these kilns to tackle the rest of the emissions, although with not much progress on CCUS in India, the implementation looks far from today.
Industry initiatives & patent distribution
There have been several initiatives on industrial decarbonisation on various global platforms. Some of the very recent initiatives are Climate Club, Leadership Group for Industry Transition (LeadIT), Industrial Transition Accelerator and Industrial Deep Decarbonization Initiative, among others. So far, only the LeadIT initiative directly mentions technology transfer as one of its major pillars, while a few others mention providing technical expertise and assistance.
The LeadIT initiative was launched by the governments of Sweden and India at the UN Climate Action Summit in 2019. Since then, the number of members have increased to 38 (including companies and countries), and last year at COP 28, the Lead IT 2.0 version was also launched. During the launch event, an upcoming partnership between Dalmia Cement in India and SaltX Technology in Sweden was showcased, wherein they plan to set up a pilot plant to produce electrically produced cement by 2024. There has been no public update on the pilot as of April 2024.
However, these initiatives are yet to see large funding and implementation of R&D, despite the strategies, policy dialogues and information sharing. Some of the main concerns include that a bulk of these initiatives are by the private sector, with only limited public sector involvement.
Additionally, the current paradigm envisages transfer from developed to developing countries, ignoring the vast potential of developing countries to create technologies unique to their circumstances. The United Nations Conference on Trade and Development has found that developed countries continue to be the predominant beneficiaries of green technologies.
The question of international patent rights (IPR) underlying these technologies also remains unresolved. Private IPR owners are not obliged to share technology with developing countries on an affordable basis under UNFCCC. Low-carbon technology development tends to be concentrated in a few countries, especially developed countries. The academic evidence suggests that IPR policies can contribute or impede climate technology transfer and even create barriers.
While there is quite some fanfare at the events of these alliances and initiatives building partnerships between the developed and the developing world, we are hard-pressed to show progress on technology transfers in these sectors.
Sangeeth Selvaraju is a sustainable finance analyst at the Grantham Research Institute, London School of Economics.
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