India is set to launch a groundbreaking Green Steel Mission by the end of 2024, aiming to promote sustainable steel production as the country grapples with increasing global pressure to reduce its carbon footprint. Announced by Sandeep Poundrik, Secretary of the Ministry of Steel, the mission is modeled after India's successful National Green Hydrogen Mission, with a focus on incentivizing industry players to boost green steel output.

The push for green steel comes in the wake of the European Union's proposed 'carbon tax' of 25% on steel and aluminum imports, signaling a growing global commitment to environmental sustainability. For India, this development underscores the urgency of reducing the carbon intensity of its steel production. In preparation for the mission, the Indian government is expected to release a formal definition of green steel by October 2024, paving the way for a comprehensive rollout by December.

Increased Green Steel Procurement and Funding Reallocation

Currently, the government's procurement of green steel is relatively low, ranging between 10% to 20%, but this is anticipated to rise significantly as green steel production expands. The mission will incentivize steel producers to transition toward low-carbon technologies, ensuring that India’s steel sector aligns with sustainable development goals.

One of the key components of the Green Steel Mission is the potential reallocation of US$ 357.4 million (Rs. 3,000 crore) in unspent funds from the earlier Production-Linked Incentive (PLI) scheme for specialty steel. This reallocation, pending necessary government approvals, is intended to support the growth of green steel production, which is expected to become a major contributor to India’s steel output in the coming years.

Rising Steel Demand and Policy Adjustments

India's steel consumption is rising rapidly due to the country's ongoing economic expansion. As a result, the government is reviewing the National Steel Policy 2017 to update its targets and strategies to better reflect current market trends. The Steel Scrap Policy, introduced in 2019, has already laid the foundation for expanding green steel capacity by prioritizing steel recycling.

However, as Poundrik noted, implementation challenges remain, especially in the unorganized sector, which plays a crucial role in steel scrap recycling. The unorganized sector faces hurdles such as lack of technology and infrastructure, which the Ministry of Steel aims to address through the mission.

Addressing the Growing Capacity Demand

The National Steel Policy 2017 initially projected India’s steel capacity requirement by 2030 to be around 300 million tonnes. However, current demand is already outpacing those expectations, driven by robust domestic growth. The Green Steel Mission is expected to play a pivotal role in meeting this growing demand in a sustainable manner.

Poundrik emphasized that private sector participation and government support will be essential to achieving the mission’s goals, as the Indian steel industry seeks to align with global environmental standards while addressing domestic infrastructure needs.

India’s transition toward green steel production represents not only a strategic response to climate change challenges but also a key step toward becoming a global leader in sustainable industrial growth. The mission’s success will depend on the combined efforts of government initiatives, private sector investment, and technological innovation in steel production.

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