Govt may mandate public procurement of 25% sustainable green steel

The government is finalising a green steel procurement mandate, with a potential 25 per cent target, even as it criticises the European Union’s Carbon Border Adjustment Mechanism (CBAM) as a trade barrier that undermines ongoing India-EU free-trade

agreement (FTA) talks. 

Ashwini Kumar, economic advisor to the Ministry of Steel, confirmed that public procurement would play a key role in creating a market for low-emission steel. He said the government was considering a mandate to ensure green steel is not edged out by cheaper, high-emission alternatives. 

“We are working on that also. It’s a tricky business. I don’t know when we will see green steel public procurement coming into force. But still, modalities are being worked out,” he said at the India Steel Conclave 2025 in New Delhi on Friday. 

While no official quota has been announced, Arvind Bodhankar, chief sustainability officer at ArcelorMittal Nippon Steel India, said the policy could involve substantial purchases. 

“The government is coming out with a green steel procurement policy where I believe the government will be procuring 25 per cent of steel as green steel,” he said. Kumar also raised concerns about CBAM, which will impose a carbon tax on steel and other imports into the European Union (EU). 

“The EU is important because around half of India’s steel exports go to the EU. Now, there is a tendency to weaponise carbon emissions as an instrument for trade. The term that the EU uses is environmental law, but this is essentially trade restrictions and it has bearings for Indian steel companies who export to the EU,” he said. He added that CBAM is “actually against the spirit of FTA,” pointing out that the EU’s waste treatment regulations, which restrict scrap exports to non-OECD countries, hurt India’s efforts to decarbonise steelmaking.

 

“On the one hand, they are pushing us to reduce our CO₂ emissions in the name of CBAM. 

On the other hand, they have constrained our ability to take that course of reduction of CO₂ emissions in the steel sector,” Kumar said.