ENA Sectors 2024-12-26 17:26:42 <p><span style="font-size:14px"><strong>New Delhi, Dec 26 (KNN)</strong> The Finance Ministry has dismissed a proposal from the Steel Ministry to establish a central agency for the bulk procurement of green steel, citing concerns over its necessity.</span></p> <p><span style="font-size:14px">According to officials, most of the steel used in government projects is indirectly procured through contractors, rather than directly by the government, making such an agency unnecessary.</span></p> <p><span style="font-size:14px">Green steel refers to steel produced through environmentally friendly methods that reduce carbon emissions, typically by replacing fossil fuels with renewable energy sources like hydrogen or wind and solar power.</span></p> <p><span style="font-size:14px">The Steel Ministry had suggested an agency similar to the Energy Efficiency Services Limited (EESL), which manages bulk procurement of energy-efficient products like LED lights and solar pumps.</span></p> <p><span style="font-size:14px">While the concept of a green steel procurement agency drew some interest, industry experts argue that it would not be effective. They point out that procurement rules vary across sectors such as road, power, and railways, which already have their own mandates and agencies.</span></p> <p><span style="font-size:14px">Instead, what these sectors need is a clear definition and threshold for green steel, which could then be managed through existing supply chains.</span></p> <p><span style="font-size:14px">A report from the Steel Ministry in September this year estimated that the cost of green steel could add a premium of 10 to 15 percent to government projects, potentially raising the annual budgetary impact to as high as per cent28,730 crore by FY31.</span></p> <p><span style="font-size:14px">However, the report noted that even with a 30 percent premium on green steel and 20 percent replacement of conventional steel, the impact on infrastructure projects would only increase costs by about 1.1 percent.</span></p> <p><span style="font-size:14px">In response, the Steel Ministry continues to focus on creating a framework for the Green Public Procurement (GPP) policy for the sector, aiming to boost the demand for green steel in India.</span></p> <p><span style="font-size:14px">Meanwhile, several private companies with established climate goals are expected to adopt green steel as part of their sustainability efforts.</span></p> <p><span style="font-size:14px">The total steel consumption by the public sector is expected to rise significantly by FY31, further highlighting the importance of defining and incorporating green steel in Indias infrastructure development.</span></p> <p><span style="font-size:14px"><em><strong>(KNN Bureau)</strong></em></span></p> 40396 https://knnindia.co.in/news/newsdetails/sectors/finance-ministry-rejects-proposal-for-green-steel-bulk-procurement-agency 2024-12-26 17:26:42 knnindia.co.in