The Indian government is preparing a comprehensive package aimed at promoting green steel manufacturing in the country. This initiative will include several components, including a review of the definition of green steel. Discussions are already underway between the steel ministry and the finance ministry regarding this proposed package, which will be implemented in phases.
To further support green steel initiatives, the government plans to prioritize the procurement of green steel in public projects and will set a timeline for the industry to adopt cleaner technologies. Steel Secretary Sandeep Poundrik highlighted these plans during a conference last month.
This push for local green steel production comes as the domestic steel industry encounters new global challenges, particularly non-tariff barriers like the European Union’s Carbon Border Adjustment Mechanism (CBAM). The upcoming phase of CBAM is expected to increase India’s steel export costs to the EU by approximately USD 65-70 per ton. It is also estimated that India will need an investment of between 190 billion and 215 billion USD to transition to a low-carbon economy.
Currently, the global average emissions intensity for steel production stands at 1.85 tons of carbon dioxide per ton of crude steel. The proposed government definition of green steel is expected to set the threshold at emissions of less than 2.2 tons of carbon dioxide per ton of crude steel. This definition will likely align with the emissions reduction objectives established by the Bureau of Energy Efficiency under the existing Carbon Credit Trading Scheme, according to officials involved in the discussions.
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