Steel Sector Targets 25% Emission Reduction By 2035 Under Draft Policy: Report

New Delhi, Apr 10 (KNN) India’s steel sector is aiming to reduce carbon emissions by about 25 per cent over the next decade, even as the country plans a significant expansion in production capacity, according to a Reuters report citing the draft ‘National Steel Policy 2025’ document.

The policy proposes reducing emissions to 2 metric tonnes of carbon dioxide per tonne of finished steel by 2035–36, from the current level of around 2.65 tonnes—about 32 per cent higher than the global average, according to a document reviewed by Reuters.

Sector’s Role in Emissions and Growth

The steel industry currently contributes 10–12 per cent of India’s total emissions, underscoring the need for cleaner production methods. At the same time, the country—already the world’s second-largest steel producer—plans to expand crude steel capacity to 400 million tonnes by 2035–36, up from about 168 million tonnes at present.

Exports are also targeted to more than double to 20 million tonnes during the period.

Policy Measures to Cut Carbon Footprint

To achieve these goals, the policy outlines measures such as promoting gas-based steelmaking, increasing the use of steel scrap, offering incentives for continuous emission reductions, and strengthening access to gas infrastructure and overseas supplies.

Currently, only 21 per cent of blast furnace capacity and 5 per cent of direct reduced iron (DRI) capacity have access to gas pipeline infrastructure, highlighting a key constraint.

Global Trade Pressures Add Urgency

India’s decarbonisation efforts have gained urgency amid global trade developments, including the European Union’s carbon border tariff, which imposes charges on imports of high-emission products such as steel and cement.

This has prompted India to explore alternative export markets while accelerating efforts to make domestic production greener.

Investment and Employment Impact

The planned capacity expansion will require investments of about USD 183 billion and is expected to generate over 3 million jobs by 2035–36. The steel sector currently employs around 2.8 million people and contributes 2.5 per cent to India’s nearly USD 4 trillion economy.

Reducing Raw Material Dependence

The policy also targets a reduction in dependence on imported coking coal—from about 90 per cent currently to 80 per cent by 2035–36—through international collaborations with countries such as Australia, Russia, Japan, Germany, and the United States.

(KNN Bureau)