The government is preparing a ₹5,000 crore incentive scheme aimed at supporting India’s steel producers in cutting carbon emissions. The move is part of the broader “National Mission for Sustainable Steel,” designed to align the sector with the country’s long-term climate goals and international commitments.
The initiative is expected to particularly benefit small and medium-sized steelmakers, many of whom lack the financial capacity to invest in cleaner technologies on their own. India’s steel industry, the second largest in the world, is among the country’s most energy-intensive and carbon-heavy sectors, accounting for a significant share of industrial greenhouse gas emissions. Policymakers have underlined the urgency of adopting low-carbon solutions such as green hydrogen, carbon capture, and energy-efficient furnaces.
Officials familiar with the plan indicate that the scheme will provide financial assistance and policy incentives to encourage the adoption of sustainable practices. This could include grants for technology upgrades, subsidies for renewable energy integration, and targeted support for pilot projects involving new production methods. The government is also considering ways to strengthen monitoring and reporting frameworks to ensure measurable progress in emission reductions.
Industry observers view the scheme as both timely and strategic. With the European Union’s Carbon Border Adjustment Mechanism set to impose levies on carbon-intensive imports, Indian steelmakers face the risk of losing export competitiveness unless they transition to cleaner production pathways. Domestic demand for low-carbon steel is also expected to grow, especially as infrastructure, automotive, and construction sectors increasingly prioritise sustainability.
While large integrated producers have already begun experimenting with green steel technologies, the scheme is anticipated to accelerate adoption across the wider industry. If implemented effectively, it could mark a turning point for India’s steel sector by linking industrial growth with environmental responsibility.
