Three years ago, Saarloha embarked on a transformative journey towards green steel, propelled by a steadfast commitment to decarbonise its operations through the innovative RRR initiative at its plant: Recycle, Renewable, Reduce. This initiative encompasses the recycling of scrap, utilization of renewable energy sources, and reduction of fossil fuel consumption.
As this progressive journey unfolded, Saarloha keenly observed a growing emphasis on the green economy and sustainable manufacturing practices from its European clientele, particularly within the automotive sector. With approximately 80% of its steel destined for export markets, aligning with these evolving sustainability standards became not just advantageous but imperative to maintain competitiveness and prevent potential business loss to rivals.
Quest for the definition
In its quest for a precise definition of green steel, Saarloha turned to internationally recognized standards and drew inspiration from COP 26, where President Joe Biden and the World Economic Forum, introduced the First Movers Coalition (FMC). The FMC stands as a global alliance of companies committed to driving new technologies crucial for decarbonising hard-to-abate industrial sectors such as shipping, trucking, aviation, cement, concrete, steel, and aluminum.
Acknowledging the authority and credibility of this groundbreaking initiative, supported by one of the world’s largest economies, Saarloha made the strategic decision to embrace the FMC’s officially endorsed definition of green steel, as unveiled in 2022.
“To ensure the credibility and verifiability of our assertions, we pursued certification from a reputable agency. After thorough evaluation of several options, we recognized DNV for its extensive expertise and steadfast reliability. Collaborating closely with DNV, we meticulously refined our definition of green steel and initiated the implementation and promotion of these standards within our production operations,” Mr. Goyal elaborated.
Reflecting on milestones
Established nearly half a century ago, the Saarloha plant started as a secondary steel facility, primarily utilizing scrap generated from its group companies as its principal raw material. Over the course of the last five decades, Saarloha has consistently elevated and modernized its manufacturing facilities. Today, it proudly stands as the epitome of cutting-edge steel production, boasting one of the most advanced and sophisticated facilities in the industry, including state-of-the-art technologies such as Electroslag Remelting (ESR) and Vacuum Arc Remelting (VAR).
Operating on a circular economy model, Saarloha demonstrates its dedication to decarbonisation by sourcing nearly 75% of its scrap materials from its clientele. This symbiotic relationship, built on trust and collaboration, facilitates the seamless collection of scrap generated at customers’ sites, further enhancing the company’s environmental stewardship.
The plant specializes in the production of highly specialized materials tailored for niche markets, including contributions to space missions like Chandrayaan, defense applications such as precision gun barrels, shipbuilding endeavours, wind power, nuclear power sector, and automotive industry. This firm focus on high specialization and quality sets Saarloha apart as an industry leader.
“This facility also serves as the epicentre of Saarloha’s green steel initiatives. Our esteemed KALYANI FeRRESTATM brand was officially unveiled in December 2022, marking a momentous milestone in our quest for sustainable steel production. This occasion stands as a defining moment, underscoring our unwavering dedication to environmental governance and innovation within the steel industry.
Since its launch, KALYANI FeRRESTATM has embarked on a transformative journey of continual enhancement and expansion, aiming to redefine the benchmarks of green steel production. With over a year and a half of operation, the brand has garnered invaluable experience and insights, adeptly navigated challenges while seizing upon the myriad opportunities presented in the dynamic realm of sustainable manufacturing,” elucidated Mr. Goyal.
Technological transformation
Transitioning production to green practices is a substantial undertaking, given the intricate and multifaceted nature of the process, compounded by numerous variable factors.
Mr. Goyal highlighted this complexity: “Addressing such a challenge necessitated a methodical approach of breaking it down into manageable components. We conducted a thorough examination of every facet of our operations, meticulously scrutinizing each activity to discern its carbon footprint. For instance, we closely analyzed the inputs required for furnace charging, the energy utilized, the types of fuels and consumables utilized, among other factors. It became evident that our electricity consumption significantly contributed to CO2 emissions.”
To counter this, Mr. Goyal explained, “We prioritized transitioning to renewable energy sources, particularly leveraging solar power. Collaborating with state authorities, we implemented innovative solutions like energy banking, ensuring uninterrupted access to solar energy throughout the day. Additionally, we embraced electric furnaces to the extent possible and maximized usage of biofuels to further minimize our environmental impact. Maximizing the use of scrap materials over other raw materials emerged as another key strategy. Furthermore, optimizing the overall efficiency of our plant operations was paramount in reducing resource consumption across the board. These concerted efforts collectively underpin our commitment to sustainable steel production.”
“Establishing our 74-megawatt solar power plant demanded substantial investment from Saarloha, considering the limited availability of renewable energy sources at the time. Nonetheless, we recognized the pivotal significance of this investment in securing our energy needs sustainably,” Mr. Goyal emphasized. “Our proactive stance enabled us to surmount initial hurdles and forge a resilient renewable energy infrastructure. Consequently, we now benefit from dependable access to renewable energy, a cornerstone in our dedication to environmentally conscious steel production.”
From planning to realization
“Prior to the official launch, meticulous planning was undertaken to ensure the presence of key stakeholders who could lend credibility to the event and underscore the significance of Saarloha’s initiative in the eyes of the government and the nation,” Mr. Goyal elaborated.
He continued, “Discussions were held with the Honourable Minister of Steel, Government of India to garner support and validate the credibility of the endeavour. The palpable enthusiasm from the Ministry was evident, with the Minister of Steel, Mr. Jyotiraditya Scindia, alongside the Secretary and other officials gracing the occasion to gain insights into the offering and its implications for the industry. This endorsement provided a solid foundation, sparking discussions in boardrooms across the steel sector. The audacity of a relatively small company like Saarloha to spearhead such an initiative ignited intrigue and lively discussion within the industry,” Mr. Goyal proudly shared with us.
“The attention garnered from foreign dignitaries, including the Parliamentary State Secretary at the Federal Ministry for Economic Affairs and Climate Action, Mr. Stefan Wenzel, further bolstered our company’s confidence and commitment to our green steel mission,” Mr. Goyal noted.
He continued, “The visits from high-ranking officials, such as the US Consul General and the Counsel for Economic Affairs, underscored the global significance of Saarloha’s efforts and served as a testament to its potential for international collaboration. Encouragingly, discussions with European customers have been progressing positively, with agreements for the supply of green steel currently under consideration,” Mr. Goyal remarked, highlighting the positive momentum and international recognition garnered by Saarloha’s endeavours in green steel production.
“Despite the investments made thus far awaiting returns, our company maintains an optimistic outlook on future prospects, firmly believing in our contribution to society through the production of steel with reduced CO2 emissions and its positive impact on the environment,” Mr. Goyal affirmed, expressing confidence in the long-term benefits of their green steel initiative.
Pushing ahead
Mr. Goyal shared that since the launch of its green steel brand, Saarloha has made remarkable progress in reducing its environmental footprint. Its Scope 1 emissions, which include direct emissions from operations, are guaranteed to be less than 190 kg of CO2 per tonne of steel produced.
“With the transition to green energy sources, our Scope 2 emissions, associated with indirect emissions from purchased energy, have been reduced to zero,” Mr. Goyal explained. “Regarding Scope 3 upstream emissions, which cover indirect emissions from sources like procurement, fuel, transportation, and waste, we are currently at around 400 kg of CO2 per tonne of crude steel. Taking all three scopes into account, our total CO2 emissions per tonne of steel stand at approximately 590 kg.”
Saarloha’s immediate focus is twofold: firstly, ramping up marketing efforts to promote and supply its sustainable steel to customers in Europe, India, and the United States.
“Simultaneously, we are exploring ways to further reduce CO2 emissions in our production processes,” Mr. Goyal highlighted. “Additionally, we are actively pursuing the adoption of hydrogen-based Direct Reduced Iron (DRI) production technology as a strategic measure to mitigate potential scrap shortages in the future.”
Mr. Goyal concluded our conversation by reflecting on the importance of our actions. “If we envision a healthy life for our children and future generations, action is imperative today. The urgency to address environmental challenges cannot be overstated, as the consequences of inaction may jeopardize our existence in the not-too-distant future. We are presented with a clear choice: act now or face the repercussions. There is no alternative. By prioritizing sustainability today, we safeguard the well-being of generations to come — a responsibility that transcends individual interests and underlines the importance of collective action.”
