KOLKATA: From addressing challenges in value chain to decarbonisation and sustainability, steel companies are tapping into the startup ecosystem for fresh ideas and breakthrough technologies.
Tata Steel’s flagship startup engagement programme, Innoventure, is in its fifth year. About 55 per cent of its current engagements with startups are focused on the areas of sustainability and decarbonisation.
Thrust areas, however, extend to advanced materials, mining, waste energy recovery, and also water treatment. The world’s second-largest steelmaker, ArcelorMittal has launched an India Accelerator programme to support its decarbonisation goals and that of its India joint venture, ArcelorMittal Nippon Steel India (AM/NS India).
JSW Steel’s joint managing director and chief executive officer Jayant Acharya said that a function has been created within the group to scout for the right startup ecosystem and support the technology development that has the potential to decarbonise steel and cement sectors.
“We are looking at identifying such opportunities which will be a strategic fit for us,” Acharya said.
Steel and cement are emission-intensive hard-to-abate industries. The steel sector contributes about 7 per cent to the global energy-related carbon emissions. A significant part of the engagement with startups, therefore, revolves around the climate journey.
Debashish Bhattacharjee, vice president of technology and R&D at Tata Steel, explains that not only new technologies are required to be brought in with a certain maturity level, but also a new mindset, which is at a faster pace than the traditional corporate mindset.
Innoventure strives to match the startups with Tata Steel’s needs. Likening it to a matchmaking site, Bhattacharjee says, this is like Tata Steel matrimony.com – the matrimony here is between startups and corporate needs. And the “matchmaking” is on specific themes.
Around 40 startups are said to be actively carrying out their proof of concept experiments at Tata Steel’s plants in various areas – iron making, energy, CO2 (carbon dioxide), hydrogen generation, as well as new materials. Tata Steel’s Innoventure has a bank of 15,000 startups.
“Whenever there is a Tata Steel matrimony.com event, they fish from the pond of 15,000 startups. Then, when the matchmaking happens, there’s an active discussion,” Bhattacharjee explains.
Currently, there is active discussion with 770 local and global startups. Among the early ones, is a startup from the UK.
“We used them to set up India’s first carbon capture plant in a steel plant (Jamshedpur),” Bhattacharjee said, adding that it has been running for the last two and a half years and is in the process of being scaled up.
Globally, collaboration with startups for the green journey is gaining currency. In July 2023, ArcelorMittal launched a dedicated India Accelerator programme in collaboration with IIT Madras to tap into the Indian startup world for the climate journey. This is the first country-specific accelerator programme from the steelmaker’s stable.
The global steel major launched the XCarb Innovation Fund in 2021 with the idea of investing in companies developing breakthrough technologies for decarbonisation. It has two accelerator programmes – global and India – for early-stage startups.
ArcelorMittal has pledged to achieve a group-wide 25 per cent carbon intensity reduction by the end of the decade. AM/NS India, too, recently outlined a decarbonisation journey targeting a reduction in emissions intensity by 20 per cent by 2030.
ArcelorMittal’s XCarb India Accelerator programme recently selected three finalists from eight startups that received mentorship and guidance on the commercial development of their technologies at GDC IIT Madras. The finalists can potentially be awarded an equity investment or research collaboration.
The XCarb Innovation fund has so far made investments of $189 million in seven companies and ArcelorMittal has committed a further $100 million to the Bill Gates-led Breakthrough Energy’s Catalyst programme over five years.
However, Tata Steel’s Bhattacharjee said the company tends not to pick up equity in startups. “We let them free, we benefit by acceleration and they hopefully benefit by proof of case study and a platform for scaling up,” he said, adding that there is an agreement that binds them, but not with equity.
“The only case where we have taken equity and we have partnered from a business sense with a startup is with Ceramat,” he said. Ceramat is into advanced ceramics manufacturing.
