ENA Sectors 2025-11-27 15:25:19 <p><strong>New Delhi, Nov 27 (KNN) </strong>India must deploy public capital more strategically to support green steel projects and avoid long-term carbon lock-in as the country expands its steel capacity, according to a new analysis by the Institute for Energy Economics and Financial Analysis (IEEFA).</p> <p>With 92 per cent of Indias planned capacity increase from 180 Mt to 300 Mt yet to be built, IEEFA warns that choosing low-emission technologies now will shape the sectors carbon footprint for decades. </p> <p>Relying on conventional blast furnace technology would also increase dependence on imported metallurgical coal and pose energy security risks.</p> <p>The briefing notes that green steel projects globally have relied heavily on public finance, with credit guarantees mobilising more private capital than direct grants. </p> <p>High upfront investment and long payback periods remain major barriers to private sector funding in emerging green steel technologies.</p> <p>Indias proposed National Mission for Sustainable Steel, with a Rs 5,000 crore outlay, is expected to provide incentives and risk guarantees primarily for secondary steel producers. </p> <p>A draft Green Public Procurement policy seeks to mandate that a share of steel used in public projects be low-carbon, although earlier attempts at centralised green steel procurement faced hurdles.</p> <p>The upcoming Carbon Credit Trading Scheme, expected in 2026, may encourage cleaner production, though its impact will depend on carbon pricing levels.</p> <p>IEEFA also noted that while steelmakers are increasingly issuing green and sustainability-linked bonds, these instruments largely support incremental improvements rather than major technological transitions. </p> <p>To accelerate Indias transition, the report recommends three key interventions: a government-backed credit guarantee facility, product-based Contracts for Difference through reverse auctions, and dedicated project preparation support for MSMEs.</p> <p>According to IEEFA, Indias green steel roadmap will require well-designed public financial tools to attract private investment while ensuring efficient use of taxpayer funds.<br /> <em><strong>(KNN Bureau)</strong></em></p> 44218 https://knnindia.co.in/news/newsdetails/sectors/public-funding-key-to-scaling-green-steel-as-india-expands-capacity-ieefa-report 2025-11-27 15:25:19 knnindia.co.in