India is preparing a ₹5,000 crore scheme to cut carbon emissions across its steel sector, with a strong emphasis on small and secondary plants. Steel Secretary Sandeep Poundrik shared details at the FT Live Energy Transition Summit in New Delhi, where the National Mission for Sustainable Steel was outlined.
The scheme, still being finalised, will reward steelmakers based on measurable year on year reductions in emissions rather than offering upfront capital subsidies. Around three quarters of the funds are expected to be directed to secondary producers. These include firms using electric arc furnaces, induction furnaces or relying on scrap or sponge iron. Such players account for nearly half of India’s steel output but often lack the resources to invest in green technologies.
Emission intensity in the Indian industry stands at about 2.55 tonnes of carbon dioxide per tonne of crude steel, well above the global benchmark of 1.9 tonnes. The proposed incentives aim to encourage adoption of cleaner technologies, alternative fuels, greater process efficiency and higher use of scrap and renewable energy. These measures are seen as vital for reducing the carbon gap with global peers.
The government believes the performance linked design will ensure accountability and visible progress. The initiative also comes at a time when Indian exports face increasing scrutiny under the European Union’s Carbon Border Adjustment Mechanism, which adds costs to carbon intensive imports.
The scheme has received internal approvals and is expected to roll out in the coming months. For India, which has pledged to reach net zero emissions by 2070, decarbonising the this sector is both an economic imperative and a test of credibility on its climate commitments.
