Public procurement mandate could unlock 16 MTPA green steel demand: CII

A 26% green steel mandate for public projects could cut emissions sharply while raising total project costs by only 0.2-1.2%, a CII report says

Mandating 26 per cent use of certified green steel in public projects valued above Rs 1 crore from FY2028 could unlock up to 16 million tonnes per annum (MTPA) of demand by FY2030, according to a report released on Thursday by the Confederation of Indian Industry (CII).

 

The study titled Catalysing Demand for Green Steel through Public Procurement in India and done in collaboration with Climate Catalyst finds that such a mandate under Green Public Procurement (GPP) would create India’s first large-scale assured market for certified low-carbon steel. 

The report argues that such a policy could potentially avoid up to 20.9 million tonnes of CO2 emissions by FY2030. A higher 37 per cent mandate could unlock up to 24 MTPA of green steel demand and avoid up to 29.7 MtCO2 — equivalent to removing 6–9 million cars from the road annually. 

 

Public procurement accounts for Rs 45–50 lakh crore annually, with government-linked projects consuming about 31.6 million tonnes of steel and generating nearly 70 million tonnes of CO2 in FY2024.

 

The report argues that redirecting even a portion of this demand towards certified green steel would accelerate industrial decarbonisation while only marginally increasing total project costs by 0.2–1.2 per cent, based on case studies of PM Awas Yojana–Urban 2.0, Metro Rail systems and Indian Railways projects.

 

The assessment draws inputs from 28 steel producers representing 88 MTPA of crude steel capacity and 12 major public procurers. It finds that 93 per cent of producers (26 out of 28) surveyed are ready to supply certified green steel at scale, contingent on a notified mandate and transparent cost recovery mechanisms such as a premium, GST concession or carbon credit offset.

 

Among producers, ArcelorMittal Nippon Steel India (Hazira) is projected to be the first integrated producer to enter the three-star category under the Green Steel Taxonomy by FY2027, followed by Tata Steel’s Jamshedpur and Kalinganagar plants by FY2028 and JSW’s Bellary, Dolvi and Salem facilities by FY2030, subject to emission intensity reductions.

 

The study recommends announcing a mandate in 2026–27. Additionally, it argues that with institutional mechanisms such as the General Financial Rules (GFR) 2017 and the Carbon Credit Trading Scheme already in place, GPP could absorb up to 24 MTPA of certified green steel by FY2030.