India is preparing a new national steel policy aimed at significantly reducing carbon emissions while simultaneously expanding production capacity. The draft policy outlines a roadmap for greener steelmaking, targeting a 25 percent reduction in emissions over the next decade and setting ambitious capacity goals.
India targets lower emissions in steel production
According to a draft prepared by the Ministry of Steel, India plans to reduce emissions from its steel sector to 2 mt of carbon dioxide per metric ton of finished steel by 2035-36.
Currently, Indian steel mills emit around 2.65 mt of carbon dioxide per metric ton of finished steel, which is approximately 32 percent higher than the global average of 2 mt.
Key measures to decarbonize the steel sector
The proposed policy includes several structural changes aimed at reducing emissions:
- Promotion of gas-based steelmaking to replace coal-intensive processes
- Higher use of ferrous scrap in production
- Fiscal incentives for mills that successfully reduce emissions
These measures are designed to accelerate the transition toward lower-carbon steel production technologies.
Reducing reliance on coking coal
The policy also targets a reduction in India's dependence on imported coking coal:
- Current import dependence: ~90 percent
- Target level by 2035-36: 80 percent
However, infrastructure remains a challenge as only 21 percent of blast furnace capacity has access to gas pipelines and just give percent of DRI (sponge iron) capacity is connected to gas infrastructure.
Alongside decarbonization, India aims to significantly increase its steelmaking capacity from around 168 million mt per year to 400 million mt per year by 2035-36.
