New Delhi, May 9 (KNN) India is considering a proposal to require automakers of premium and ultra high-end models to use green steel in their manufacturing processes, according to government officials.

Green steel refers to metal produced through methods that minimise carbon emissions, such as using hydrogen, renewable power sources, or recycled scrap instead of traditional integrated steel mills.

The recommendation would mandate that luxury car brands like Audi, BMW, and others utilise low-carbon green steel, at least partially, for their highest-end vehicle offerings.

The rationale is that demand for luxury cars is less sensitive to potential price increases from adopting greener production methods.

"If not in full, part of the supplies for high-end offerings or luxury cars should include green steel," said one official aware of the discussions. "But right now that is a suggestion which is still on the drawing board", reported BL.

While green steel is more expensive to produce initially, the proposal argues that as adoption increases, costs will come down to make domestic green steel facilities commercially viable.

Apart from luxury cars, the Indian government is also looking at requiring green steel for its own infrastructure projects.

The move could incentivise Indian mills to invest in lower-emission steel production to meet any mandated demand. It would also align with steps luxury automakers in Europe have already taken to transition to green steel supplies.

Volkswagen plans to use low-CO2 steel from Salzgitter AG starting in 2025, while Mercedes took an equity stake in Swedish green steel venture H2GreenSteel. BMW, Ford and others also have partnerships to introduce green steel.

(KNN Bureau)