India Plans US$569 Million Green Steel Support Fund

---

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--India is planning to spend Rs. 5,000 crore (US$569 million) to kickstart its green steel industry.

India's Steel Secretary Sandeep Poundrik said that the goal is to promote lower carbon emissions in steel production by financially supporting the use of clean technologies and alternative materials. "The proposal is under consideration for a National Mission for Sustainable Steel. It is a Rs.5,000-crore scheme," he told attendees at the FT Live Energy Transition Summit India in New Delhi.

The scheme, due to be formally rolled out in the coming months, will be available to all of India's steelmakers, but 75-80% of the fund will be earmarked for secondary players. "Basically, this scheme is that you will get incentives depending on how much you reduce the emissions...if you reduce your carbon emissions compared to your last year. What we are saying is to improve the technologies, but the output parameter we are measuring is decarbonisation."

Industrial Info is tracking 2,750 steel-related projects in India worth almost US$63 billion in investment. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.

India is the second-largest producer of crude steel according to World Steel Association data for 2024. China was the world's largest crude steel producer in 2024 at just over 1 billion tonnes, followed by India at 149.4 million tonnes, Japan at 84 million tonnes and the U.S. at 79.5 million tonnes. The steel sector is one of India's largest emitters, contributing roughly 12% of its greenhouse gas total. During production, it has an emission intensity of 2.55 tonnes of CO2 per tonne of crude steel, which is notably higher than the global average of 1.9 tonnes. The country, as a signatory of the Paris Agreement on climate change, has ambitious targets to cut its emissions by 45% by 2030 from its 2005 levels and to become net-zero by 2070. Another key reason to cut steel emissions is the potential impact of the European Union's carbon levy system on India's steel exports. Two-thirds of India's steel exports go to Europe and, due to their higher-than-average emissions, will face stiff penalties under the carbon border adjustment mechanism (CBAM). "The limits of carbon emission, which are proposed in CBAM, will definitely impact exports," Poundrik said. The country is seeking an exemption from the CBAM, which would also hit its exports of aluminium, fertilizers and cement.

Last week, the EU agreed to integrate India's Carbon Credit Trading Scheme (CCTS) into CBAM, in a move that could ease the costs to Indian exporters. The EU-India Strategic Agenda confirmed that any carbon price under India's CCTS will be deducted from the financial adjustment charged under CBAM. Although the EU carbon levies are due to be implemented until January 1, 2026, many small and mid-sized exporters have struggled with compliance with the mandatory emissions reporting requirements already in place. According to a report by the Global Trade Research Initiative (GTRI), India's steel and aluminium exports to the EU dropped a combined 24.4% in fiscal 2025, down from US$7.71 billion in 2024 to $5.82 billion this year. Steels exports dropped sharply by 35.1% while aluminium shipments fell almost 10%.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).