India Drives Sustainable Steel Growth with Emissions Reduction

India is planning a significant overhaul of its steel industry, aiming to strike a balance between rapid industrial growth and environmental responsibility. According to a government document, the country intends to reduce carbon emissions intensity from steel production by around 25% by 2035–36, even as it works to double its overall steelmaking capacity. This reflects a broader push to align industrial expansion with long-term climate commitments.

The strategy outlines a plan to scale up steel production capacity to approximately 500 million tonnes per year, up from current levels. This expansion is driven by rising domestic demand from infrastructure, construction, and manufacturing sectors. However, the government is simultaneously focusing on lowering the environmental footprint of this growth, recognizing that steel production is one of the most carbon-intensive industrial activities.

To achieve emission reductions, India is looking to shift toward cleaner production methods. These include increasing the use of steel scrap in electric arc furnaces, promoting gas-based steelmaking processes instead of traditional coal-based methods, and improving overall energy efficiency across plants.

The policy also signals interest in adopting emerging technologies such as green hydrogen for steel production, although these solutions are still in early stages and may require significant investment and policy support.

The move is also influenced by global climate policies and market pressures. As regions like the European Union implement carbon border taxes, Indian steel producers may face competitiveness challenges if emissions are not reduced. By focusing on cleaner production, India aims to maintain its position in global markets while progressing toward its broader goal of achieving net-zero emissions by 2070.

Overall, the plan highlights the complexity of transforming a heavy industry like steel, where economic growth and sustainability goals often conflict. Successfully implementing these measures will depend on technological innovation, financial investment, and coordinated policy efforts across the sector.

Sustainable-steel growth in India ties into both the green-steel procurement mandate and CBAM-exposed export competitiveness, and it changes capex and disclosure planning for producers on both sides. Our supply-chain-and-operations and climate-action teams help clients evaluate what green-steel dynamics mean for sourcing strategy and disclosure narrative.