Sponge iron's dirty growth

In the years to come, India's expanding steel production will be largely driven by sponge iron. Sponge iron, also known as direct reduced iron(DRI), is produced from direct reduction of iron ore (in the form of lumps, pellets or fines) by a reducing gas produced from natural gas or coal. Sponge iron gives a cheaper way of producing steel which has a high demand in the market. 

But apart from counting the benefits evil effects of the manufacturing process are being neglected. Steel’s manufacturing process, based on coal, is highly polluting. It can be explained with an example of Odisha’s Sundargarh district. Every morning the dwellers are not able to see the rising sun. It is because it hides behind the smoggy blanket of pollutants which are emitted by the steel producing factories.

Conditions are same in the industrially rich states like Jharkhand, Chhattisgarh, West Bengal, Andhra Pradesh and Karnataka. The repercussions are clearly visible near sponge iron factories which have mushroomed in iron-ore and coal-rich areas. This has resulted in violent protests where residents of the effected region are playing a major role.

Failing framework
Strict implementation of rules and regulations is missing where bodies can have power to sue such careless polluting industries. For an instance, The Chhattisgarh Environment Conservation Board works under a lot of political and industrial pressure. The state has close to 70 sponge iron factories, legally; whereas 60 are illegally producing. When there is a public protest against the illegal factories a notice is issued but what happens to it late no one knows. Even the board is seems to be helpless in this case.

The Central Pollution Control Board(CPCB) has also classified sponge iron as red category industry which denotes its high potential to pollute. The classification means the industry needs strict pollution norms and guidelines and should be monitored and inspected regularly. On both these counts, the regulatory framework fails miserably.

State and Industrial Lobby, the pressurizing groups
The first step to tighten regulations on the industry was taken in 2006 when CPCB released a draft standard. It contained detailed emission and effluent standards, waste management measures and guidelines on locating factories. Two-and-a-half years later, the Union Ministry of Environment and Forests (MoEF) notified a highly diluted version of the draft. A former CPCB officer who helped prepare the draft said MoEF watered down the standards “under pressure from states and the industry lobby”. Most of the guidelines were dropped before notification, he added.

The rate of corruption can be better explained with miniscule examples. The height of the stack(chimney) which was mentioned to be at a minimum height of 75 meters came down to 30 meters. Higher stacks mean emissions can be dispersed over larger area, reducing their impact. Fugitive emission standards, too, were toned down.

The notification’s biggest weakness is that it is silent on solid waste disposal. The draft had recognised char, kiln waste, scrubber and flue dust as solid waste and had prescribed strict recycling and reuse measures.The rest of the CPCB recommendations now form a part of the Charter on Corporate Responsibility for Environmental Protection. These are guidelines meant for various industrial sectors and are voluntary in nature.
Activists say the main reason for rapid growth of the sector is the willingness of states to subsidize inputs, easy access to market and availability of cheap raw material and labour. There are numerous examples of sponge iron factories in the country flouting norms without being brought to book.

CSE study exposes shortcomings
In 2009, the Centre for Science and Environment (CSE), a Delhi non-profit, studied compliance with environmental norms in the sponge iron sector. It is the biggest sample study in the country so far; a total of 204 factories were scrutinised on the basis of inspection reports. These were collected from SPCBs of four states where sponge iron industry is dominant—Jharkhand, Chhattisgarh, Odisha and West Bengal. A total of 449 inspection reports, including night inspection reports, were made available for the period 2006-2009. They contained status of pollution control measures, compliance with norms and notices served. In addition to these, 265 stack monitoring reports were made available for the period 2006-2010 for Odisha, Chhattisgarh and West Bengal.

Monitoring inadequate
Analysis of the data in these reports threw up startling results. For one, it showed how inadequate monitoring is. The SPCBs inspected sponge iron factories once or twice a year; the CPCB guidelines specify they should be monitored every quarter. In Jharkhand, Odisha and Chhattisgarh, most factories were inspected only once a year. In West Bengal, they were inspected at least twice. Enforcement is a problem, conceded a CPCB official.

ESPs absent or not used
 About 10 per cent of the factories studied were operating without an ESP(Electrostatic Precipitator) in the main kiln which is a prerequisite for a factory to start production. This means the SPCBs did not inspect factory premises before production started.

The factories have a worse record when it comes to operating ESPs. Data shows, 37 per cent of the factories had non-functional or partially functional ESPs. Even where ESPs were in running condition, leakage of emissions from kilns were recorded in 60 per cent inspection reports. Odisha reports showed leakage in 37 per cent kilns with ESPs. In West Bengal, 92 per cent factories recorded emissions despite ESPs.

Emissions high
Pollution monitoring from stacks is also infrequent, the data showed. Jharkhand SPCB failed to provide even one stack monitoring report for sponge iron factories. The Odisha SPCB carried out stack monitoring of only half the factories in 2008- 2009. West Bengal SPCB scored better. It monitored 75 per cent factories; some were monitored as many as three times a year. The stack monitoring reports also show 26 per cent factories flouting emission standards.

Inspection reports showed 42 per cent factories failed to meet ambient air quality standards. The factories also fail to comply with other parameters like fugitive emission norms and disposing and handling solid waste. The waste is supposed to be covered and stored; 80 per cent factories were storing it in the open and many of them were dumping char outside their premises.

If one takes into account all compliance conditions, close to 50 per cent factories were found non-compliant on the day inspections were conducted. But these inspections are infrequent. If the factories are monitored regularly, the non-compliance figure would be much higher.

A formality called notices
Pollution control agencies have a standard procedure for dealing with factories defying pollution norms. They issue show cause notices; when offences are repeated, closure notices are sent. But are these an effective deterrent? The answer is no. Take the instance of Odisha where the SPCB issued 137 show cause notices over the past five years. Out of 74 factories for which information was made available, 45 per cent (33 factories) were served show cause or closure notices for reasons such as high emissions, defective pollution control devices and improper solid waste disposal. But in spite of the notices, many factories remained repeat offenders.

In West Bengal, the SPCB issued 250 closure notices to 50 factories over the past four years, without any effect. In Jharkhand, 21 show cause notices were issued to 24 sponge iron factories between 2007 and 2008 for not installing or operating ESPs and for flouting other pollution norms. Notices were issued and later withdrawn without achieving any result.

The cycle follows a routine. SPCB inspects a factory and issues show cause notice for not complying with norms. In the next inspection, the factory is again found violating the norms and issued closure notice. The third inspection report states the faults have been rectified and the closure notice is suspended.

A retired CPCB official said issuing notices and withdrawing them is a means to collect bribes from the factories. In some cases, bank guarantees of factories issued closure notices are forfeited. But the guarantee amounts are usually meagre and hardly a deterrent.

With the sector set to boom, India needs an action plan
If one were to compare steel consumption figures, Indians lag far behind the rest of the world. Against the world average of 215 kg, per person steel consumption in India is just 50 kg a year. This consumption gap is likely to reduce in coming years. With rapid economic growth, steel requirement for housing, infrastructure and industry is poised to grow significantly.

In 2030, more than 60 per cent of the steel produced in India will come from coal-based sponge iron. This means more than 200 MT of sponge iron and hundreds of sponge iron factories. Hence, there is an urgent need to develop an action plan for the sector to contain its environmental impact.

Strengthen enforcement
It is evident that our current system of environmental monitoring and enforcement is not working. The problem with SPCBs is lack of capacity and accountability, non-transparent functioning and corruption. This has happened largely because of neglect and politicization of these institutions. What we need is a system that ensures non-compliance is dealt with strictly. Increasing capacity, transparency and accountability of SPCBs is the first step in this direction. We then need to amend the Environment Protection Act to increase penalty amounts and set up a civil-administrative mechanism that can impose penalties without taking recourse to the lengthy legal process. We even need bigger factories with better technology to pollute less. Emission benchmarks should be set up so that we can flourish without suffering.