India’s Steel Sector to Require $283 Billion for Decarbonisation by 2030

New Delhi, Sep 17 (KNN) In a significant step towards decarbonisation, India will need to invest an estimated USD 283 billion to make its domestic steel production greener.

This initiative is part of a comprehensive strategy laid out by the Ministry of Steel, aimed at reducing the carbon footprint of one of the nation’s most energy-intensive sectors.

The plan not only outlines substantial investment but also emphasises critical innovations such as defining "green steel" and leveraging Energy Efficiency Revolving Funds (EERF).

The steel industry, which is crucial for infrastructure and manufacturing, currently accounts for a significant share of India's greenhouse gas emissions.

Decarbonising this sector is essential for meeting the country's climate commitments, especially under international frameworks like the Paris Agreement.

India, the world’s second-largest steel producer, is expected to play a pivotal role in the global green transition, but this shift will not come without substantial financial outlay.

According to officials, the roadmap targets a significant rise in renewable energy use within the steel sector. Currently, renewable sources contribute only 7.2 per cent to the industry’s energy mix (as of fiscal year 2021–22).

The plan aims to boost this figure to an ambitious 43 per cent by the end of the decade, by 2029–30. This leap will require not only massive investments in cleaner technologies but also an overhaul of energy supply chains and regulatory support.

To promote the adoption of green steel, the government is exploring tax incentives for manufacturers, particularly luxury automobile producers, encouraging them to switch to cleaner steel feedstock.

Such measures could enhance market demand for eco-friendly steel, pushing both large-scale and smaller steel plants to adopt sustainable practices.

The transition process itself is projected to cost an additional US$ 150 billion. Smaller steel mills, which are prevalent across India, face significant financial hurdles in this shift. Modernising these plants to adopt the best available green technologies could require over US$ 13 billion in investment.

The Steel Ministry's roadmap represents a bold and necessary vision for reducing India’s carbon emissions while modernising the steel sector, but achieving these goals will require collective efforts across the government, industry, and financial institutions.

(KNN Bureau)