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JSW Steel has signed a memorandum of understanding (MOU) with Smartex to explore low-emission steel production.

Under the MoU, the two companies will explore the potential to promote innovation and turnkey approaches - from financing to technology availability and market access aimed at decarbonisation of the steel sector in India, de-risking industry investment, accelerating climate action and addressing social equity.

Smartex has launched the Financing Steel Decarbonisation (FSD) initiative during the 2022 Climate Week in New York City.

FSD is creating a $1billion Steel Decarbonisation Fund (SDF) and an eco-system to support steel industry decarbonisation.

India being the second largest steel producer is responsible for over 10 per cent of CO2 emissions from energy systems.

Decarbonising steel production is not easy, with solutions either commercially unviable or in early development stages, JSW Steel said in a statement on Monday (17 October).

SDF will host a technical assistance facility for identified decarbonisation projects’ preparation and a blended technology debt fund for low-cost long-term financing solutions to be explored.

“Indian steel industry needs innovation in low emission steel making and financing solutions at comparative cost advantage to reach the next level of steel decarbonisation,” said Seshagiri Rao, joint MD, JSW Steel.

“A majority of JSW’s strategic focus areas and organizational goals have been formulated to align our existing production facility towards climate change mitigation and reduce our CO2 emissions intensity by 42 per cent by 2030 from a base year of 2005," Rao said.

"We are committed to remain within the sustainable development scenario (SDS) pathway as proposed by International Energy Agency (IEA), which require significant investment. The proposed Financing Steel Decarbonisation (FSD) initiative and Steel Decarbonisation Fund (SDF), hopefully would provide the right opportunity,” he added.

Abhijit Basu, KOP (Keeper of the Purpose) of Smartex, said, “Working with a premier steel producer like JSW, we have the opportunity to place India at the forefront of low- emission steel production and create a sustainable path for both the environment and business.” He added, “To do this we need to take the risk out of investing and open new doors for entrepreneurs.”