NEW DELHI, Sept 17 (Askume) – In a letter seen by Askume, ArcelorMittal’s Indian joint venture called on New Delhi to scrap import taxes on liquefied natural gas (LNG) used in steelmaking to help the company reduce production costs and achieve decarbonisation goals.
Steel production accounts for about 8% of global carbon emissions . Using LNG in place of coal as a fuel source could offset some of this, but would increase production costs.
In a letter to the Union finance ministry on September 2, ArcelorMittal Nippon Steel India (AM/NS India) said, “To meet domestic and international steel demand, we propose to subject liquefied natural gas imports to zero tariff.
India, the world’s second-largest crude steel producer, levies a 2.5% basic tariff on LNG and an additional 0.25% social welfare tax.
If the government agrees to AM/NS India’s demands, other steelmakers such as JSW Steel (JSTL.NS) and Tata Steel (TISC.NS) will also benefit.
The federal finance ministry and India AM/NS did not respond to Askume emails seeking comment.
In a report released this month, the steel ministry said natural gas was “too expensive”.
India’s steel industry accounts for 10%-12% of its total emissions, producing 2.54 tonnes of carbon dioxide for every tonne of steel produced. This is higher than the global average of 1.91 tonnes per tonne of crude steel.
India, the world’s third-largest greenhouse gas emitter, has pledged to achieve a net-zero carbon emissions target by 2070.
AM/NS India has also urged the government to bring natural gas under the Goods and Services Tax (GST) regime to make prices cheaper and more uniform across the country .
“This situation (LNG not coming under the ambit of GST) may undermine ‘Make in India’, leading the end-users to prefer imported products over costlier domestic products,” it said, referring to its ambitious plan to become a global nation.
By introducing the Goods and Services Tax, India replaced nearly 20 federal and state taxes to unify its $3.2 trillion economy.
The GST Council, constituted by the finance ministers of the states and headed by the Union Finance Minister, is required to approve and determine the tax rate for LNG.
