The report, titled Decarbonisation Readiness in India’s Steel Sector, states that while global counterparts have successfully reduced emissions, Indian producers are moving in the opposite direction. This trend persists even as companies demonstrate proactive intent in the absence of effective carbon pricing mechanisms or large-scale public financial support.
According to the IEEFA press statement, the economics of green steel remain unviable without coordinated government intervention. Initiatives such as the Green Steel Mission and targeted fiscal instruments are described as critical to converting corporate intent into measurable action. International experience shows that public capital has played a decisive role in enabling progress, a factor currently lacking at scale in India.
The report warns of a looming surge in blast furnace capacity requiring relining before 2030. More than two-thirds of planned capacity additions rely on conventional, emissions-intensive technologies. Each year of delay in adopting cleaner alternatives risks deepening carbon lock-in and shrinking the window for a cost-effective technological transition.
“India’s steel industry stands at a crossroads,” said Saurabh Trivedi, Lead Specialist for Sustainable Finance and Carbon Markets South Asia at IEEFA. He noted that India, as the world’s second-largest steel producer, continues to experience strong demand growth even as other major regions see stagnation or decline. The decisions taken by Indian companies in the coming years, he added, will significantly influence global steel sector emissions through mid-century.
The analysis assessed the decarbonisation readiness of 10 steel producers, including seven Indian companies and three global peers. It examined how emission reduction targets align with actual strategies, operational changes, and financial commitments.
“Companies have set targets and are advancing in technology planning, particularly among industry leaders, but capital allocation has not kept pace,” said Soni Tiwari, Energy Finance Analyst for South Asia at IEEFA. She emphasized that emissions are currently trending in the wrong direction and may worsen as the sector expands unless cleaner technologies are rapidly adopted.
Globally, approximately 24 billion US dollars has been invested in steel decarbonisation, largely supported by public funding. This underscores a major challenge for India, where the absence of similar financial backing limits progress. Tiwari highlighted the need for targeted public funding mechanisms, including credit guarantee facilities, contracts for difference, and green public procurement mandates, to rebalance risks and attract large-scale private investment.
“The window for action is narrowing,” said Tanya Rana, Energy Analyst for South Asia at IEEFA. She stressed that the sector’s transition will ultimately depend not on declared targets but on tangible investments and infrastructure development. By that measure, she concluded, India’s steel industry still has substantial ground to cover.
The report underscores a critical moment for India’s steel sector, where rapid growth and delayed transition efforts risk locking in high emissions for decades. Without immediate and coordinated action, the gap between ambition and execution could undermine both national and global climate goals
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