An Indian government policy mandating a minimum 26 percent procurement of green steel to be used in public projects would generate demand of 16 million mt per year, according to a report prepared by the Confederation of Indian Industries (CII), the country’s apex representative body, released on Friday, February 27.
Projects aided by or linked to the government currently consume an estimated 31.6 million mt of steel per year, contributing significantly to carbon dioxide emissions, the report said.
The report has drawn inputs from 28 steel producers accounting for 88 million mt of domestic crude steel capacity and indicates that 93 percent of the surveyed producers are ready to supply certified green steel, provided there is a clear mandate in place, transparent cost recovery mechanisms such as premiums, goods and service tax (GST) concessions, or carbon credit offsets.
The report said that procurement agencies have also indicated readiness to lift higher volumes of green steel, subject to policy enablers like defined thresholds, standardized tender clauses, and fiscal support for the initial three years.
The report said that redirecting even a portion of this current demand towards certified green steel would accelerate industrial decarbonization while only marginally increasing total project costs by 0.2-1.2 percent.
The report recommended that mandatory procurement of green steel for government-aided projects should be announced in 2026-27. Additionally, it said that, with institutional mechanisms such as the General Financial Rules (GFR) 2017 and the Carbon Credit Trading Scheme already in place, Green Public Procurement (GPP) could absorb up to 24 million mt of certified green steel by 2030-31.