Plant level analysis of energy efficiency change and technical efficiency measurement of Indian iron and steel manufacturers for evaluating advancements and uncovering further opportunities

Abstract

India is on its path to decarbonise the industrial sector for achieving climate change goals. Under National Mission for Enhanced Energy Efficiency India is implementing target-oriented, market-driven scheme since 2012 to cut energy intensity in key industrial sectors. This study examined the energy efficiency changes in forty-three Iron and Steel industries using the decomposed Malmquist Productivity Index and found only 2.9 % improvement in pure technical efficiency between 2009 and 2019. Additionally, if the energy intensity targets are met by 2024–25, further improvement of at least 4.9 % in technical efficiency is anticipated since 2009. Therefore, energy efficiency improvement in the sector found is slow during the decade and the energy intensity of the Iron and Steel industries has remained largely unchanged. The schemes aimed at enhancing energy efficiency have had little to no effect on improving energy efficiency within these industries. Also, the mean technical efficiency of forty-three Iron and Steel industries evaluated as 79.6 %, indicating the potential for a 20 % reduction in energy intensity. Now, under Indian Carbon Market the framework has been set for industries to migrate to Carbon Credit Trading Scheme. Therefore, the factors influencing the poor pace of energy efficiency improvements must be addressed under new framework.