Steel Ministry Plans Customized Emission Targets for Mills

Government sources confirmed Friday, August 29, that the Ministry of Steel in India intends to unveil emission reduction targets for steel producers on a customized basis that will enable an equilibrium to be maintained between decarbonization objectives and the different abilities of mills throughout the country.

About the National Steel Policy 2017, different targets for small and large producers are planned to be set under this initiative. Small mills will have emission goals that are relatively less stringent, whereas the bigger producers will be put under stringent emission requirements. According to the officials, this tiered approach accounts for structural divergences in production capacity and technological readiness within the industry.

In essence, this measure is based on rules drafted to implement the Greenhouse Gas Emission Intensity Target Rules 2025 under the Carbon Credit Trading Scheme 2023 which establishes a domestic carbon market, creating an incentive to trade credits as a means of compliance.

For any targets so set that cannot be reasonably achieved, there will be a penalty system, but with some flexibility built in: part of these targets could be offset by buying or generating carbon credits. The idea is to ensure accountability without constraining smaller or resource-limited players, said one of the officials.

The Energy Efficiency Bureau(EEB) will monitor compliance and apply detailed methodologies to calculate and track emissions for the steel sector. Monitoring would be linked to India’s commitments to reducing the carbon intensity of the economy under its Nationally Determined Contributions(NDCs).

As the second-largest steel producer globally, India’s steel sector is all the more important as an industrial emitter for the country. By implementing customized targets, the government hopes to nudge the industry towards cleaner technology without impairing development.

Analysts believe that this move can also deepen the domestic carbon credit market and create newer pathways for investments and innovation in green technologies. “This is both a regulatory nudge and a market opportunity,” noted one industry expert.

The ministry will issue the final guidelines in the next few months following consultations with the stakeholders.