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Monday, June 04, 2012

IRON & STEEL, ENVIRONMENT, ODISHA, INDIA  
Nilachal Ispat ranks among top four environment-friendly steel plants, Bhushan Steel rated as the worst in India  

"Iron and steel sector has a long way to go in meeting environmental norms, says latest study by New Delhi-based research and advocacy body Centre for Science and Environment (CSE), released on eve of World Environment Day. Of the five companies rated from Odisha, Neelachal Ispat Nigam Limited of Kalinganagar has emerged at the top with its fourth ranking and a Two Leaves Award whereas Bhushan Steel of Dhenkanal has been adjudged “the worst performing plant under GRP in all aspects” for it is non-transparent and poor disclosure systems."

 
Centre for Science and Environment (CSE)  
   

The iron and steel industry in India is struggling to meet environmental norms. While some plants and companies are making efforts to clean up their acts, the sector’s overall environmental performance is poor. It is using up enormous quantities of resources (land, water, energy, raw materials), polluting and not complying with even the weak environmental norms that exist today, and getting away doing all this because of our lax regulatory and monitoring capabilities.

This assessment of the iron and steel sector in India has emerged from a unique rating of the industry done by the New Delhi-based research and advocacy body, Centre for Science and Environment’s Green Rating Project (GRP). The ratings were released here today by Montek Singh Ahluwalia, deputy chairperson, Planning Commission and Jayanthi Natarajan, Union minister of state for environment and forests (independent charge).

 

The iron and steel industry in India is struggling to meet environmental norms. While some plants and companies are making efforts to clean up their acts, the sector’s overall environmental performance is poor. It is using up enormous quantities of resources (land, water, energy, raw materials), polluting and not complying with even the weak environmental norms that exist today, and getting away doing all this because of our lax regulatory and monitoring capabilities.

This assessment of the iron and steel sector in India has emerged from a unique rating of the industry done by the New Delhi-based research and advocacy body, Centre for Science and Environment’s Green Rating Project (GRP). The ratings were released here today by Montek Singh Ahluwalia, deputy chairperson, Planning Commission and Jayanthi Natarajan, Union minister of state for environment and forests (independent charge).

The GRP has analysed all the top steelmaking plants in the country to find out how ‘green and clean’ the sector is – how much resources it uses, how much it emits, how it disposes its wastes, and how it deals with issues of local communities.

CSE’s Green Rating Project is a 15-year old programme – the only public disclosure programme of its kind in India -- which was envisaged as a tool to push for improvement in policy and practices in industrial sectors. It does this by assessing, rating and publishing the environmental and social performance of the companies.

The Project has already rated the automobile, paper, chlor-alkali and cement sectors; iron and steel is the fifth key industrial sector rated by it. In all the sectors, GRP’s efforts have led to significant improvements in environmental performance of companies and better environment policy formulation by the government. 

What the rating found

The GRP rating process is extremely rigorous, independent, participatory and transparent. The GRP rates companies that agree to participate voluntarily as well as those who do not. Data is collected from many sources, including industry, and verified by plant and site visits.

On the basis of its findings, the Project also confers the Five Leaves Awards on the plants which are rated the most environment-friendly.

In the case of the iron and steel sector, 21 companies, with over 0.5 million tonnes of annual capacity, were rated on over 150 parameters – from technology to process efficiency and from pollution to occupational health and safety and compliance. The rating of steel sector took two years to complete.

As a whole, the sector received a mere 19 per cent marks and the One Leaf Award. This has to be compared to rating of the an equally polluting sector, cement sector, which in 2005 got 36 per cent and Three Leaves Award. It shows that this core sector, which includes the biggest and most powerful names in Indian industry, has a long way to go.

Of the 21, three companies scored over 35 per cent marks – and got the Three Leaves: they are Ispat Industries, in Raigad district of Maharashtra, Essar Steel in Hazira (Gujarat) and Rashtriya Ispat Nigam Limited (RINL or Vizag Steel), based in Visakhapatnam, Andhra Pradesh. The Three Leaves Award represents ‘average’ performance under GRP.

Some of the other key findings of the GRP rating exercise are:

1. The Indian iron and steel sector’s energy consumption of 6.6 GCal/tonne is about 50 per cent higher than the global best practice.

2. Process water consumption, excluding power generation, townships and other downstream operations, is a high 3.5 m3/tonne – over three times the global best practice.

3. The large-scale plants have been found to be highly wasteful on land. They have close to 1,200 hectares (ha) of land per million tonne of installed capacity; a well-designed plant does not need more than 200 ha. If all the residual land with steel plants were to be properly utilised, the industry can produce more than 300 million tonnes steel, not the 75 million tonnes it is producing today. In fact, the steel industry will not need extra land till 2025.

4. Most steel plants have been found to be non-compliant with pollution norms.

Neelachal Ispat does well, Bhushan Steel Dhenkanal comes last

Of the five companies rated from Odisha, Neelachal Ispat Nigam Limited of Kalinganagar has emerged at the top with its fourth ranking and a Two Leaves Award. The state is fortunate to have plenty of cheaply available raw materials – iron and coal. A number of plants have been found to be following the coal-based sponge iron route of steelmaking.

As a result, pollution from fugitive dust emissions and solid wastes from these plants is acquiring epidemic proportions in Odisha. Though the state’s pollution control board has been trying to monitor pollution and enforce norms, the industry here has been beset by a number of concerns: high air and water pollution, poor waste disposal practices, non-compliance with environmental norms and poor health and safety record.

Neelachal Ispat’s high ranking has been owing to its use of advanced coke oven technology, and its practice of recycling waste energy for power generation. However, the plant has earned censure for its wastewater discharge not complying with norms and its inefficient utilisation of land.

SAIL Rourkela, at the 11th spot with a One Leaf Award, was the only SAIL plant which participated voluntarily in the rating exercise; the rest – Bhilai, Durgapur, Bokaro and Burnpur – did not and hence, were rated on the basis of available information. SAIL plants in general were found to be “non-transparent and non-compliant with environmental norms”.

Of the other three, Visa Steel (Kalinganagar) emerged at the seventh position with a Two Leaves Award, while Bhushan Power and Steel (Sambalpur) was at the 12th spot with a One Leaf.

Bhushan Steel of Dhenkanal has been adjudged “the worst performing plant under GRP in all aspects” – it is non-transparent, with poor disclosure systems, and did not participate in the rating exercise. It pollutes, has a very poor safety record and bad solid waste disposal practices, and has earned the ire of the local communities for its abysmal environmental performance.

Downslide: Indian industry gives the shove to environment

Says Sunita Narain, director general, CSE: “The poor environmental performance of this sector is a measure of the failure of the regulatory institutions in the country. Nobody is asking this sector to improve its green bottom-line. Nobody is measuring and monitoring its actual performance. We should not be surprised. The country has worked to decimate its pollution regulatory paraphernalia – the steel sector is a hard reminder of this.”

Chandra Bhushan, CSE’s deputy director general and head of the Green Rating Programme, points out, “The iron and steel sector’s score is the lowest compared with the other sectors that GRP has rated previously. In fact, the steel sector not only has the worst pollution compliance record, it was also found to be highly non-transparent and poor on information disclosure. 

The question now is, what do CSE’s green rating exercises point to in terms of the overall performance of industry in India?

Says Sunita Narain: “When we had begun our rating way back in the mid-1990s, Indian industry was starting to learn environmental management. By the time we rated the cement sector in 2005, we noted that Indian industry had mainstreamed environment management into its policy and practices. But in 2012, we are revising this assessment. The environmental non-performance of the iron and steel industry, a core sector of the economy -- involving biggest industry names and having a separate Union ministry – has left us worried.”

Even the companies which have performed relatively better in the rating programme seem to have done so incidentally. The top three companies have invested in efficient technologies to cut their energy and material costs – this, incidentally, has also improved their environmental performance.

According to Chandra Bhushan, what the GRP exercise has found about the iron and steel sector points to a worrying future, which calls for immediate corrective action. The sector is rapidly expanding: within a decade, it has moved from being a 24-million tonne industry to a 70-million tonne behemoth, and is aspiring to the 300-million tonne target in the next two decades. If the business-as-usual continues, the steel sector will create insurmountable environmental and social problems.

What can be done to stem the rot?

There is hope, of course.

Says Chandra Bhushan: “The future road map for the sector is clear. It will have to reduce its ecological footprints drastically, invest in health and safety of its workers and treat local communities as stakeholders and beneficiaries.”

Plants will have to halve their energy use, use only that much water which is needed for evaporative losses and thus stop discharging wastewater, and recycle and reuse their solid wastes. And they will have to take measures to reduce air emissions significantly.

In fact, the more the companies invest in environmental performance the better will be their cost-efficiencies. The investment in energy efficiency pays back as does the reuse and recycling of waste. The less the use of material and energy, the lower the costs and lower the burden of disposal into the environment.

“Therefore, good resource management not only makes the steel sector more efficient, but also protects the environment. This is a win-win that we must strive towards,” says Narain.

“On this eve of World Environment Day, the steel sector rating is a reminder of the challenges, but also the enormous potential of bringing about change,” she adds.

[Centre for Science and Environment is a Delhi based non-governmental Organisation known for its policy research and advocacy on environmental issues]

 

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