 "Govt plans ₹5,000 cr mission to boost green steel, cut industry emissions")
The government is working on a national mission to provide financial support to both large and small steelmakers to produce sustainable or ‘green’ steel, according to a report in The Economic Times. The scheme, expected to be worth about ₹5,000 crore, could be rolled out in the next financial year after necessary approvals.
The package will include concessional loans, risk guarantees and other financial tools. While the primary focus will be on secondary steel producers, who contribute nearly half of India’s output, primary producers using blast furnaces will also be eligible.
Secondary producers key to decarbonisation
Secondary steelmakers rely on scrap and sponge iron, often using electric arc or induction furnaces, making their inclusion central to India’s decarbonisation plans.
The government aims to promote the use of better raw materials, alternative fuels and renewable energy in steel production. Under the National Steel Policy 2017, India has already set a target of cutting emissions to 2.6-2.7 tonnes of carbon dioxide per tonne of crude steel through electric arc furnace technology by 2030.
Currently, about 50–60 per cent of primary producers have adopted modern technology, but secondary producers lag at under 50 per cent, the steel ministry noted.
Alongside this scheme, the ministry is also preparing a broader Green Steel Mission. This could include a production-linked incentive (PLI) scheme for green steel, incentives for renewable energy use, and rules mandating government bodies to procure sustainable steel.
Demand for green steel rising
A study by EY-Parthenon with WWF-India and CII-GBC projects that demand for green steel in India will grow sharply from negligible levels today to 4.49 million tonnes (MT) by 2030, led by construction, infrastructure and automobiles.
The report estimates demand will rise further to 24.89 MT by 2035, double again to 73.44 MT by 2040, and peak at 179.17 MT by 2050. Construction is expected to remain the largest driver, followed by infrastructure and auto manufacturing.
Public procurement and global trade concerns
To encourage adoption, the government is considering mandating at least 25 per cent of public steel procurement from green sources. At the same time, it has criticised the European Union’s Carbon Border Adjustment Mechanism (CBAM), calling it a trade barrier complicating India-EU free trade talks.