India has taken a pioneering step in sustainable steel production by launching the world’s first green steel taxonomy. This initiative, introduced by the Union Ministry of Steel in December 2024, aims to define clear benchmarks for low-carbon steel production, guiding the industry towards decarbonization and aligning with the nation’s net-zero emissions target by 2070.
Despite this progressive move, India’s steel industry faces significant environmental challenges. The country plans to expand its annual steel production capacity from approximately 200 million tonnes to over 330 million tonnes by 2030, with a substantial portion relying on coal-based methods. This expansion raises concerns about increased greenhouse gas emissions, potentially doubling the sector’s current contribution, which already accounts for about 12 per cent of India’s total emissions.
The International Energy Agency recommends that 37 per cent of global steel production should utilize lower-emission electric arc furnaces by 2030. However, India’s coal-heavy expansion plans may hinder this global target, as the country’s steel sector emits approximately 2.6 tonnes of CO₂ per ton of steel produced, about 25 per cent higher than the global average.
South India is emerging as a strategic hub for green steel production, benefiting from access to renewable energy sources and a robust manufacturing base. This region’s potential is crucial for India’s transition to sustainable steelmaking practices.
While over 90 per cent of India’s planned steel capacity remains unbuilt, offering an opportunity to pivot towards greener technologies, the window for meaningful change is narrowing. Failure to adapt could not only compromise India’s climate commitments but also affect its competitiveness in global markets, especially with impending regulations like the European Union’s carbon border adjustment mechanism.
