Context:
India’s steel sector, contributing approximately 12% of national carbon emissions, faces increasing pressure to decarbonize. Green steel production is emerging as a strategic pathway for climate compliance and economic competitiveness.
Key Highlights:
Policy Commitments and Initiatives:
- Revised Nationally Determined Contribution (NDC) submitted at COP30 in Belém, Brazil, emphasizing economy-wide decarbonization.
- Government released Greening Steel Roadmap (September 2025) and Green Steel Taxonomy (December 2024) to formalize standards and definitions.
- Policy incentives for shifting from coal-based blast furnaces remain pending.
Sectoral Challenges and Global Drivers:
- India’s steel production projected to triple to 400 million tonnes by mid-century.
- EU’s Carbon Border Adjustment Mechanism (CBAM) pressures global players to adopt low-carbon steel practices.
- Avoiding high-carbon infrastructure lock-in is critical for sustainable development.
Corporate Actions and Technological Pathways:
- Leading Indian steel producers (Tata Steel, JSW Steel, JSPL, SAIL) exploring:
- Hydrogen injection into furnaces.
- Renewable energy integration.
- Green hydrogen adoption.
- Key barriers include high cost of green hydrogen, limited renewable energy availability, and informal scrap markets.
Government Role and Support Measures:
- Set carbon emission targets and introduce carbon pricing regime.
- Promote domestic green steel market via public procurement.
- Establish green steel hubs to share infrastructure costs and provide fiscal support, especially for smaller producers.
- Prioritize natural gas as a transition fuel.
Relevant Prelims Points:
- Green Steel: Produced using low-carbon technologies like hydrogen or renewable energy.
- Nationally Determined Contribution (NDC): Climate action commitments under the Paris Agreement.
- Carbon Border Adjustment Mechanism (CBAM): Carbon-based import tariff to curb carbon leakage.
Relevant Mains Points:
- Aligns industrial policy with climate goals and sustainable development.
- Encourages technological innovation and green investment in heavy industries.
- Addresses global competitiveness under climate-conscious trade regimes.
- Highlights governance challenges in implementing regulatory and fiscal incentives.
Way Forward:
- Accelerate investment in green technology and renewable energy supply for the steel sector.
- Provide policy clarity and fiscal support to reduce transition risks.
- Develop domestic market incentives to ensure adoption of green steel.
- Strengthen international collaboration for technology transfer and best practices.
UPSC Relevance:
- GS 3: Environment & Ecology – Climate change mitigation, industrial decarbonization, renewable energy.
- GS 3: Economy – Industrial competitiveness, green technologies, energy transition.
- GS 2: Governance – Policy formulation, implementation, industrial regulations.