India risks locking itself into nearly $1 trillion in coking coal import costs over the coming decades if its next phase of steel capacity expansion follows the conventional blast furnace route, according to a study by the India Energy and Climate Center at the University of California, Berkeley. With steelmaking capacity expected to roughly double over the next decade, the country could import close to 6 billion tonnes of coking coal over a 40-year period, exposing the sector to persistent currency volatility and global commodity price swings.
The report positions green steel, where hydrogen replaces coking coal in ironmaking, as a strategically viable alternative, underpinned by India’s abundant and relatively low-cost renewable energy resources. By 2030, the study projects green hydrogen production costs in India at approximately $3 per kilogram, enabling green steel at around $562 per tonne, only 5 to 10 per cent above conventional steel from new plants.
A key structural advantage highlighted is that unlike dollar-denominated coking coal imports, green steel production can be anchored to long-term rupee-denominated renewable energy contracts, building in greater price stability and resilience. The report suggests green steel could reach cost parity with, or undercut, conventional steel in India by around 2030.
