Government Undertakes Slew of Measures to Decarbonize the Steel Industry

The Indian government is advancing its efforts to decarbonize the steel industry with a ₹15,000 crore "Green Steel Mission." This initiative includes components such as a Production Linked Incentive (PLI) for Green Steel, incentives for renewable energy usage, and mandatory procurement of green steel by government bodies. These measures aim to significantly reduce the steel industry's carbon emissions, which currently account for 10-12% of India's total emissions.

The Steel Ministry is collaborating closely with the Ministry of New and Renewable Energy (MoNRE) under the "National Green Hydrogen Mission." This partnership focuses on increasing the adoption of green hydrogen in steel production. To support this transition, the Steel Ministry has been allocated ₹455 crore for pilot projects to be implemented by FY2029-30. These projects aim to test and scale green hydrogen technologies within steel manufacturing.

To further reduce reliance on imported specialty steel, the government launched a PLI scheme for specialty steel production. As of October 2024, participating companies have committed to investing ₹27,106 crore, with ₹17,581 crore already invested. This initiative is expected to yield 7.90 million tonnes of specialty steel production and has created over 8,660 jobs so far.

Despite India's sufficient reserves of iron ore and non-coking coal, the rising imports of coking coal—an essential input for steel production—pose challenges. Import volumes have steadily increased over the years, with 51.20 MMT in 2020-21, 57.16 MMT in 2021-22, 56.05 MMT in 2022-23, 58.12 MMT in 2023-24, and 30.19 MMT imported in the first half of 2024-25. Addressing this dependency is crucial to enhancing the self-reliance and sustainability of India’s steel sector.