India’s move towards low-carbon green steel is expected to progress gradually due to cost and technological barriers, as per a recent report. Beyond 2030, the demand for green steel in India is forecasted to rise, driven by stricter ESG norms, key industries aiming for decarbonization, and policy initiatives. The carbon emission intensity of Indian steelmakers currently exceeds global averages, posing a significant decarbonization challenge.
The introduction of a Green Steel Taxonomy by the government in December 2024 is seen as a positive step towards defining and promoting eco-friendly steel production. However, most Indian steel producers fall short of the required emission thresholds, indicating a substantial decarbonization gap that needs to be addressed. In the near term, the industry is expected to focus on enhancing operational efficiency and increasing renewable energy adoption to reduce emission intensity.
Girishkumar Kadam, Senior Vice-President at ICRA, highlighted that the sector aims to achieve a 19% reduction in emission intensity by 2029-30 through operational improvements and renewable energy integration. The transition to green power sources is projected to significantly decrease emissions for steel mills using different production methods, emphasizing the industry’s commitment to sustainability.
Domestic steel mills are already planning to shift towards renewable energy sources, with 9 gigawatts of captive renewable power capacity in the pipeline to replace fossil fuel-based electricity. By leveraging operational strategies like increased scrap utilization, energy efficiency enhancements, and iron ore beneficiation, the industry aims to further reduce carbon emissions per tonne of steel produced.
