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Large steelmakers are seeking revisions to the Renewable Consumption Obligation (RCO) regime, proposing a reduction in the mandatory renewable energy share and exclusion of waste heat gas-generated electricity. They also request excluding transmission losses from RCO calculations. The power and steel ministries are currently reviewing these requests from the steel industry. View More

Large steel makers have sought changes to the Renewable Consumption Obligation (RCO) regime, proposing a downward revision in the mandatory share of renewable energy in their consumption and exclusion of electricity generated from waste heat gases from the ambit of RCO. Steel producers have also urged the government to exclude transmission losses from RCO calculations to improve resource optimisation and reduce financial burdens, people familiar with the development said. Steel producers are mandated to meet 33.01% of their total captive electricity consumption from renewable sources in the current financial year, up from 29.91% in FY25. Their RCO target will rise to 43.33% by 2030. The power and steel ministries are examining steelmakers' requests, a government official said. The industry had approached the ministries earlier this month. Waste heat gases are produced in the blast furnace during the steelmaking process, and companies utilise these gases to generate electricity for their consumption. It helps steelmakers dispose of these greenhouse gases (GHG) without releasing them into the atmosphere, thereby preventing an increase in GHG levels. It also helps reduce consumption of energy from external sources, they noted. RCO is calculated based on the total captive electricity generated and self-consumed, and excluding waste heat recovery (WHR) from its scope would bring down the RCO obligation. "For any industrial unit, excluding WHR reduces the total fossil fuel-based power consumption quantum of a consumer, thereby reducing the overall requirement to purchase renewable power to meet RCO target," said Pranav Master, senior practice leader and director at Crisil Intelligence. The Centre has approved eight methodologies under the Offset Mechanism. These include renewable energy (including hydro and pumped storage), green hydrogen production, industrial energy efficiency, landfill methane recovery, and mangrove afforestation and reforestation. (You can now subscribe to our Economic Times WhatsApp channel) (You can now subscribe to our Economic Times WhatsApp channel)