India now leads the world in developing coal-based steelmaking capacity, accounting for 40 per cent of global projects under development, surpassing China for the first time, according to a report by Global Energy Monitor (GEM). The country also contributes to 57 per cent of new coal-based steel projects globally, raising concerns about its climate commitments.Â
India’s steel industry, the second-largest globally, is expanding rapidly to meet infrastructure and economic growth demands. The government aims to increase annual crude steel production capacity from 180 million tonnes to 300 million tonnes by 2030. However, this expansion relies heavily on coal-based blast furnace-basic oxygen furnace (BF-BOF) technology, which is carbon-intensive. Currently, 85 per cent of energy used in India’s steel sector comes from coal, and the industry emits 2.55 tonnes of COâ‚‚ per tonnes of crude steel—38 per cent higher than the global average.Â
The GEM report warns that this trajectory could jeopardize India’s net-zero emissions target set for 2070, potentially leading to an additional 680 million tonnes of COâ‚‚ emissions and risking up to $187 billion in stranded assets. While 92 per cent of India’s planned steel capacity is still unconstructed, offering an opportunity to pivot towards greener technologies like electric arc furnaces powered by renewable energy, the current “build now, decarbonize later” approach may hinder global efforts to reduce industrial emissions.
