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India is making a significant investment in green steel. Decarbonization of the steel sector is increasingly being regarded as the next key frontier in policy documents, industrial roadmaps, and climate talks. This is not a purely abstract goal. Steel alone accounts for roughly 8-10% of India’s total carbon emissions, owing primarily to the dominant method of production, coal-fired blast furnaces. Steel production emits nearly 2 tons of CO₂. As India rapidly increases infrastructure-highways, metro networks, cheap housing, renewables, and autos – the emissions curve is expected to rise even more unless production is altered. The question is therefore not whether India wants green steel, but if it is realistically achievable at scale.
The optimism is easily understood. Under the National Green Hydrogen Mission, India intends to replace coal with green hydrogen in steel production. In concept, the chemistry is simple: hydrogen, rather than coke, would convert iron ore, resulting in water vapor rather than carbon dioxide. Several large steelmakers have launched experimental projects, and cooperation with European technology leaders are also underway. If it works and is cheap, India could become a global leader in making low-carbon steel, which would give it a big economic boost at a time when the EU’s Carbon Border Adjustment Mechanism is about to punish carbon-heavy imports. Green steel can protect exports and create a new industrial identity if done correctly.
However, decarbonising steel will not be as simple as replacing one fuel with another. The first challenge is financial. Green hydrogen is still significantly more expensive than coal, and steelmaking is a price-sensitive business founded on scale and affordability. India cannot afford a shift that significantly raises the cost of infrastructure. Until hydrogen costs fall dramatically, green steel may become economically viable only for specialist, high-value sectors rather than mainstream building.
The second impediment is energy. Hydrogen is only genuinely green when produced using renewable electricity, but the amount of renewable power required to enable industrial hydrogen production is enormous. To decarbonize even a small portion of India’s steel consumption, gigawatts of wind and solar energy would need to be allocated completely to electrolyzers. If fossil-based electricity continues to power hydrogen production, emissions will simply migrate from the factory to the grid, making “green steel” a false name.
The third problem is technology dependency. Hydrogen-based direct reduction technology is still primarily concentrated in Europe, and India risks constructing a green future on imported furnaces and engineering systems. This dependency is contrary to industrial self-reliance and may impede the rate at which large-scale adoption becomes cheap.
Electric arc furnaces that use scrap metal are becoming more and more popular because they use a lot less energy than blast furnaces. Furthermore, even before hydrogen becomes commercially available, efficiency improvements, waste-heat recovery systems, and early-stage carbon capture studies are gradually lowering emission intensity. Instead of making a rapid jump, India looks to be gradually scaling a lengthy technical ladder – upwards.
This change will be accelerated due to global pressure. Europe’s carbon tax will soon make high-emission exports more expensive, meaning steel now has an emissions cost in addition to a furnace cost. Automobile manufacturers, infrastructure developers, and foreign lenders are already demanding cleaner inputs, and carbon intensity may become a more relevant benchmark in the coming years than price or tensile strength. If Indian steel continues to rely on coal, it risks losing competitiveness in important market segments.
Long-term clarity is consequently required on the route forward. To supply hydrogen on a significant scale, India will require a large and predictable increase in renewable capacity. In order to lessen reliance on imported furnace technology, homegrown innovation will be necessary. Most crucially, it will require a gradual but firm policy shift that signals to industry that coal-based steel will no longer be economically viable. Transition does not have to be hastened; nonetheless, it must be unavoidable. Without such confidence, industrial investment will be cautious and fragmented.
Decarbonising steel will be one of India’s most difficult climate transitions, but it is also one of its most critical. The country cannot cease building; but, it can construct differently. With unified policies, lowering hydrogen costs, large-scale renewables, and domestic technology, India has the potential to transform its dirtiest industry into a clean industrial pillar. If capitalized on, this opportunity has the potential to characterize India as a climate-competitive nation rather than just a climate-aware one. Countries that master green steel will dominate global manufacturing in the next decades. India has the scale, demand, and industrial base—as well as a window of opportunity. The only true question is whether we can move quickly enough to lead the shift rather than follow it.
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About the author:
Anusreeta Dutta is a columnist and climate researcher with prior experience as a political researcher and ESG analyst.
These pieces are being published as they have been received – they have not been edited/fact-checked by ThePrint.