(MENAFN- KNN India)
New Delhi, Aug 9 (KNN) Germany's upcoming Low Emission Steel Standard (LESS), set to be introduced in late 2024, is poised to create new challenges for India's steel industry.
This development comes at a particularly challenging time for Indian steel producers, who are already grappling with declining exports and rising imports, according to a recent report by the Global Trade Research Initiative (GTRI).
The GTRI report highlights a stark shift in India's steel trade balance. Steel exports have plummeted by 31.2 per cent, dropping from USD 31.7 billion in 2021-22 to USD 21.8 billion in 2023-24.
Simultaneously, steel imports have surged by 37 per cent, rising from USD 17.3 billion to USD 23.7 billion. This dramatic reversal has transformed India from a net exporter to a net importer of steel, underscoring the industry's current vulnerabilities.
LESS, a voluntary labelling program developed by the German Steel Federation and the Federal Ministry of Economics and Climate Protection, aims to classify steel based on the carbon dioxide emissions released during its production process.
The standard introduces a five-tier classification system, ranging from Class A (ultra-low emission) to Class E (high emission), taking into account factors such as carbon footprint and scrap content.
GTRI Founder Ajay Srivastava emphasizes the potential impact of this new standard on Indian steel producers. While compliance with LESS is not legally mandated for Indian companies, Srivastava warns that ignoring it could significantly harm export prospects.
"Global markets are increasingly demanding low-carbon products," he notes, "and Indian steel producers not aligning with LESS may struggle to compete in the international arena."
This new challenge compounds existing pressures on the Indian steel industry, including reduced exports, increased imports, and the looming implementation of Europe's carbon border adjustment mechanism (CBAM).
As the global steel market continues to evolve towards more sustainable practices, India's steel sector faces a critical juncture in maintaining its competitive edge.
(KNN Bureau)
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