Full Breakdown
India Sets Ambitious Goals for Steel Emissions Reduction and Capacity Expansion
4/9/2026, 8:07:44 PM
Overview of India's Steel Emissions Policy
India's steel industry is embarking on a significant transformation aimed at reducing carbon emissions by approximately 25% over the next decade while simultaneously planning to more than double its production capacity. This initiative is outlined in the proposed "National Steel Policy 2025," which seeks to lower emissions from steel mills to 2 metric tons of carbon dioxide per ton of finished steel by the fiscal year 2035-36. Currently, Indian steelmakers emit about 2.65 tons of carbon dioxide per ton of finished steel, which is about 32% higher than the global average of 2 tons.
Emissions and Economic Context
Steel production in India accounts for 10-12% of the country's total carbon emissions. The urgency for reform is underscored by the European Union's carbon border tariff, which imposes fees on high-carbon goods, including steel and cement. This has prompted India to explore alternative export markets and rethink its production strategies. The proposed policy emphasizes the promotion of gas-based steelmaking, increased utilization of steel scrap, and incentives for continuous emission reductions.
Capacity Expansion and Economic Impact
India aims to expand its crude steel capacity from the current 168 million tons to 400 million tons by 2035-36, with an ambitious target to increase exports to 20 million tons. This expansion is expected to require an investment of around 17 trillion rupees (approximately $183.41 billion) and could potentially create over 3 million jobs in the sector, which currently employs 2.8 million people and contributes 2.5% to India's nearly $4 trillion economy.
Strategic Collaborations and Resource Management
The policy also includes a goal to reduce dependence on imported coking coal from approximately 90% to 80% by 2035-36. To achieve this, India has identified 19 countries for potential collaboration, including Australia, Russia, Japan, Germany, and the United States. This strategic approach aims to secure overseas gas supplies and foster partnerships that will support the steel industry's transition to more sustainable practices.
Criticism and Challenges Ahead
While the policy outlines ambitious goals, it faces challenges, particularly regarding infrastructure. Currently, only 21% of blast furnace capacity and 5% of direct reduced iron capacity have access to gas pipeline infrastructure, which may hinder the transition to gas-based steelmaking. Critics may argue that the ambitious targets require more immediate action and investment to ensure feasibility.
Official Statements and Future Outlook
The Indian steel ministry has not publicly commented on the proposed policy. However, the document emphasizes the importance of decarbonizing the steel sector to meet India's net-zero emissions target by 2070. As the country moves forward with these initiatives, the focus will be on balancing economic growth with environmental sustainability.
Verbatim Quotes
- “As steelmaking capacity grows, decarbonising the sector is crucial for meeting India's net-zero emissions target by 2070,” — National Steel Policy Document
- “India has identified 19 countries for collaboration, including Australia, Russia, Japan, Germany and the United States.” — National Steel Policy Document
