Private / Public-Private initiatives

Transcription

1 Session-4: Economic feasibility of demonstrating innovative I&S technologies and overcoming barriers Private / Public-Private initiatives Shibojyoti Dutta, Head (Climate Change & Strategic Planning), Tata Steel Asian Steel Experts Dialogue; Shanghai, 24 May 2018

2 Determinant factors influencing the economic feasibility of demonstrating / adoption of innovative I&S technologies 1. Capital intensive most technologies from overseas with limited market, retrofitting challenges, premium of latest technology (IPR) / limited supplier 2. High cost of capital economic condition of country foreign exchange rates risk profile of breakthrough research, reliable operation & success (program management capability, averse to change takes longer time to standardize & deploy practices) 3. While facilitation continues, fiscal support not inadequate due to Govt. priorities delivering basic amenities (livelihood, healthcare, education, infrastructure etc.) and addressing other critical issues (e.g. national security) 4. Retrofitting challenges: space, shutdown, process integration land Private / public-private initiatives on low-c I&S Technologies 2

3 Transferability of learnings from these projects to other technologies / regions Should share learnings to leverage partnerships & collaborations Case studies of innovating applications to overcome economic hurdles / securing international funds can be shared (e.g. internalising external cost of emissions through voluntary adoption of internal carbon pricing after validating success of the objective) Lessons learnt (example): CDM benefits not realized due to process complexity (additionality, methodology) & market Life-span > years; Carbon revenue > 10 years was not available Market based mechanism with CER price US$ 15/tCO 2 did not impact project financials significantly; remained difficult to establish justify otherwise economically unviable projects Internal Carbon (shadow) pricing at lower rates face similar challenge Yet to establish effective forum for sharing such learnings Sometimes binding T&C, competitiveness issues (often misplaced concerns) are barriers Private / public-private initiatives on low-c I&S Technologies 3

4 How can financial mechanisms unlock investments to support the sector s sustainable transformation? Engagement needed to understand roadblocks and innovative financial solutions which can remove such roadblocks Innovative solutions may include utilization of insurance corpus to provide funding / grant with intent to minimize GDP loss due to Climate Change Debottlenecking ESCO route for accelerated deployment (off-balance sheet enabling through addressing concerns w.r.t. financial reporting standards and risk sharing) Mobilizing available funds (e.g. GCF, internationally, or corpus from Coal Cess, in India or pooling resources by insurance consortium) to fund innovative research (e.g. breakthrough, low grade energy recovery, consolidation of scrap business) or Provide grant / funding of technology transfer / adoption Sourcing funds at low cost Soft loans, grants through Carbon Energy trading / other instruments &/or programs Engineering challenge more of success case Need to incentivize business especially, early movers, to take plans and implement actions; incentivize for adopting next phase expansion through Scrap-EAF route etc, Private / public-private initiatives on low-c I&S Technologies 4

5 What public-private partnerships have succeeded in advancing in developing and demonstrating environmentally sustainable process technologies and strategies! Most public-private partnerships had share of success GAP, NEDO demonstration projects (G BF Stove WHR & CDQ Batt.567 at Tata Steel, Sinter Cooler WHR at RINL), APPCDC (development of the state-of-the-art clean technologies - SOACT) GIZ project (survey of MSME sector & rolling mills) GSEP, PPP / BOCM (incl. standardization, identification of most potential technologies customised list on energy & environmental protection) CDM though relatively less impact considering the footprint of Indian Steel sector However, Indian steel assets still have lower adoption of potential mitigation technologies Sample analysis of 7 Integrated Steel Companies in India (ascending based on mitigation scenario intensity) Mitigation Scenario Potential Analysis: Tata Steel Climate Change team, Private / public-private initiatives on low-c I&S Technologies 5

6 How are governments addressing barriers and supporting opportunities to improve the sector s environmental sustainability? Ministries of Finance, Steel, Environment, Power, Government of India: Promote adoption of best available technologies & innovation through CDM, bilateral initiatives (GAP, NEDO, APPCDC, GSEP, PPP / BOCM) Launched market based mechanism to enhance energy efficiency through PAT (sectoral analysis, normalisation through industry engagement, energy efficiency target setting, rolling out energy certificate trading and enforcement), Renewable through REC trading Multi-stakeholder engagement Formed Taskforce (expert, academia, industry, industry association) to assess action plans & funds to meet NDC aspirations (two groups under Taskforce: Sub Group 1 for integrated steel plants and Sub Group 2 for Sponge Iron and MSME sector) Reward & recognition to drive gap analysis & benchmarking TIFAC under DST engaged in evaluation of imported technologies Capacity development & standardisation of management system & MRV Scenario analysis engaging industry to look beyond 5 year long term plans TIFAC: Technology Information, Forecasting and Assessment Council DST: Department of Science & Technology GSEP: Global Superior Energy Performance Partnership Private / public-private initiatives on low-c I&S Technologies 6

7 Conclusions No silver bullet higher degree of engagement to decide timebound action plan Innovative actions needed Banks & FIs may be mandated to deliver portfolio decarbonization / include carbon performance of an organization against benchmark value in investment decision making / risk profiling Build awareness & capacity Encourage companies to assess business risks associated with Climate Change; adaptation budget needs Private / public-private initiatives on low-c I&S Technologies 7

8 End of Presentation Private / public-private initiatives on low-c I&S Technologies 8

9 Biodata of speaker: Shibojyoti Dutta Head, Climate Change & Strategic Planning, Tata Steel; with > 2 decade experience in Energy Management and Climate Change of Integrated Steel sector, experience in combustion of Steel plant by-product gases. Joined SAIL in 1991 and moved to Tata Steel in Graduated with B.Tech.(Hons) Energy Engineering, 1991 and later completed MBA(Finance) in Climate Change Champion (Tata Group, since 2009); CII-certified Sustainability Assessors (since 2013); External assessor of Tata Business Excellence Model (based on EFQM model) in Tata Group (2010); ex-lead Auditor of EMS ISO and OHSAS (2007 & 2012) and AccountAbility Accredited Sustainability Assurance Practitioner (2011, non-practicing). Has led Tata Steel to global benchmark position - highest rated steel company, globally, in Climate Change Disclosure in CDP 2014 & CDP 2015 and global leader in Environmental Sustainability in DJSI Recognized CII-ITC Sustainability Awards (1) as Best Leader award, Dec 2016; (2) as Best Assessor, Dec 2017 and (3) by Indian Institute of Metals, Burnpur for innovation (2000) at IISCO, Burnpur; recipient of scholarship from Indian Institute of Technology, Kharagpur ( ); National Scholar in Higher Secondary (1987) and Secondary (1985) Examinations. Climate related initiatives rolled-out in Tata group units and across various sites of Tata Steel. Assessing impact of climate risks. Contributed to stabilization of boilers after conversion from coal to 100% gas firing and establishing cause of explosion at LD Gas holder through RCFA. Member of Energy Management sub-committee (MED39) of BIS. Developed CDM New Methodology NM0179: Waste Gas and/ or Waste Heat Utilization for Process Steam generation or Process Steam and Power - approved by UNFCCC as ACM0012. Participated in global initiatives between Governments of India, Germany & Japan (BOCM, GSEP, GIZ programs) involved in development of practical methodology for evaluation of GHG abatement through CDQ with Nippon Steel Corporation and Mitsubishi UFJ Research Private / public-private initiatives on low-c I&S Technologies 9

10 Private partnerships Industry Collaborations & other entities Role of Industry associations (e.g. CII, FICCI, Indian Steel Association) Coordination of stakeholder engagements for responsible advocacy shaping policy framework, enabling actions and regulations showcasing innovative applications in India at COP meeting CDP (managing environmental disclosure program on behalf of Investor) Influencing companies to disclose climate mitigation approach, governance, initiatives, achievements and recognitions Progressively increasing disclosure requirements, providing tools incl. SBT, TCFD etc. enabling companies to build capacity for mature response Supply Chain level engagement to spread the awareness, horizontal deployment of successful application CPLC (World Bank), Climate Group (RE100, EP100 etc.) Industry engagements SIEMENS-TATA Collaboration on Low Grade Heat Recovery CII: Confederation of Indian Industries FICCI: Federation of Chamber of Commerce of India Private / public-private initiatives on low-c I&S Technologies 10