India’s Coal-Fired Steel Boom Threatens Global Green Targets

India’s coal-fuelled boom in steel production may be stalling global efforts to green one of the world’s most carbon-intensive sectors, a non-profit monitoring energy infrastructure has concluded.

Though China remains the biggest capacity steel producer, the world’s most polluting steel industry is now in India. It also boasts the biggest pipeline of expansion, with more than 350 million tonnes per year of additional capacity under development phases most of which is based on outdated, coal-fueled blast furnaces.

“India is today a world leader in steel decarbonization,” declared Astrid Grigsby-Schulte, GEM Project Manager. “Unless the country boosts its green steel production goals, the whole industry will be falling short of a very significant target.”

The issue is not urgent. The steel sector produces more than 10% of world carbon emissions, primarily due to its dependence on coal-based technology. Cleaner technologies, such as electric arc furnaces (EAFs) and direct reduced iron (DRI), use much less coal or no coal at all, provided they are powered by cheap renewable energy or scrap metal.

India itself has one major restriction, though: a lack of steel scrap, which renders less economical the broader application of cleaner production techniques.

By most recent GEM figures, 36% of world steel production might be coal-free by 2030, nearing the International Energy Agency’s target of 37%. But India’s trend risks upsetting the calculations, since the country’s coal-heavy approach continues unabated, threatening to lower global averages.

The world target is a move within a larger effort towards achieving net-zero emissions in the steel industry by mid-century. The success is highly reliant on how emerging economies such as India design their industrial policies.

India’s decisions in the next few years could either make the steel industry a climate solution or continue to be a significant contributor to the climate problem while the world is watching.