Page 47 from: March 2014

47March 2014

on a larger scale – a unique feature, creating in

that way a niche in the domestic steel market.

Coal-based DRI production
Electric furnaces are fed by a mix of scrap and

direct reduced iron (DRI). Since 2003, India

has been the largest DRI producer in the world

but, in contrast to the global norm, the coun-

try’s DRI production is mostly coal-based.

Furthermore, India is challenged by limited

local availability of steel scrap and depends

largely on imports. In 2013, it was the world’s

third largest steel scrap importing country and

demand for this material is expected to rise in

the years ahead.

In the absence of steel scrap, DRI is the main

substitute and is sometimes used in induction

furnaces in proportions up to 80%. In India,

DRI is often produced in badly-managed,

small-scale rotary kilns using low-quality coal.

The Ministry of Steel has suggested that the

quality of steel produced in induction furnac-

es has deteriorated over the years mainly

through the use of large quantities of DRI when

quality steel scrap has not been available.

Steel re-rolling also plays a vital role in the

Indian steel industry, making the largest contri-

bution of all processes to total steel production;

a figure of 57% was suggested in ‘Energy Effi-

ciency in Steel Re-Rolling Mills’ from the Unit-

ed Nations Development Program (2012). Ship

recycling provides a large quantity of steel to the

re-rolling sector; an average of 70% of the total

steel recoverable from a ship can be re-rolled.

Potential for emission reduction
One of the major drivers behind the develop-

ment of the ship recycling industry in India is

the high demand for steel scrap. Approximate-

ly 75% of a ship’s total volume is recyclable steel

that can be either re-rolled or melted to pro-

duce crude steel.

The steel sector is considered to be one of the

key contributors to climate change because of

its high levels of both energy consumption and

The legislative arena
The EU Ship Recycling Regulation (SRR) entered
into force on December 30 last year, following
the main guidelines of the Hong Kong Interna-
tional Convention for the Safe and Environmen-
tally Sound Recycling of Ships (HKC).
This new regulation offi cially opens up the market
for the recycling of European ships as, unlike the
Basel Convention for the Transboundary Move-
ments of Hazardous Wastes and their Disposal,
it does not consider it illegal for EU-fl agged ships
to be dismantled outside the OECD. EU ships can
be recycled in any facility around the world whose
standards meet the specifi c EU requirements. In
that way, ships fl agged under one of the member
states are excluded from the scope of the Basel
Convention.
This could be considered a motive for upgrading
ship recycling facilities in countries like India –
but this has not been the case to date. It will take
years before the regulation is applicable and, at
the same time, it does not address the loophole
of re-fl agging prior to scrapping.
Without question, environmental, health and
safety standards need to be improved in the ship-
breaking yards of India. But at the same time, the
relationship between ship recycling and the Indian
steel industry is too crucial to be overlooked.

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