Centre Drafts ₹5,000-Cr Mission to Push Green Steel, Cut Emissions

The Union government is proposing a ₹5,000-crore mission to support the adoption of clean technologies by the steel sector, with a major focus on secondary producers. Alongside, this proposal supports the larger effort aimed at decreasing the industry’s carbon footprint and increasing the demand for green steel within India.

India’s decarbonisation plan focuses predominantly on secondary producers who use scrap and sponge iron via electric arc or induction furnaces. While the Steel Ministry admits about 50–60% of primary producers in India have adopted new-age, low-emission technologies, the transition has been less than 50% among secondary players.

The scheme would promote improved raw material usage, renewable energy, and alternative fuels for production. The intent is to align with the National Steel Policy 2017, which intends to cut emissions to 2.6–2.7 tonnes of CO₂ per tonne of crude steel produced using electric arc furnace technologies by 2030.

This ₹5000 million plan also goes hand in hand with a developing Green Steel Mission. Suggestions include a production-linked incentive scheme, incentive grants for renewable energy, and sustainable steel procurement in compulsory contracts for government agencies. The officials are considering a mandate that at least 25% of all steel for public procurement should be green steel.

These developments come with estimations of demand for green steel soaring. A study by EY-Parthenon, WWF-India, and CII-GBC estimates that demand for green steel will rise from almost negligible today to 4.49 million tonnes (MT) by 2030, with the construction, infrastructure, and automobile sectors as primary drivers. Demand is projected to continue to increase up to 24.89 MT by 2035, 73.44 MT by 2040, and peak at 179.17 MT by 2050, with construction still to be the dominant sector.

Meanwhile, India has raised concerns related to the European Union’s Carbon Border Adjustment Mechanism (CBAM), labelling it as a trade barrier. While domestic steelmakers prepare for transition toward low-carbon production, the concerned officials claim it may hamper ongoing free-trade talks between India and the EU.