India aiming to cut steel emissions by 25%, double capacity, document shows

New Delhi: India's steel mills aim to cut carbon emissions ​by about a quarter over the next decade and reduce reliance on coal, while the world's second-biggest producer of the alloy plans to more than double output, according to a document seen by Reuters.

Under the proposed "National Steel Policy 2025", ‌India aims to cut ⁠emissions ⁠from steel mills to 2 metric tons of carbon dioxide per ton of finished steel by 2035-36, according to a draft cabinet note dated March 10, reviewed by Reuters.

The new emissions reduction target has not been previously reported.


Steelmakers in ​India emit about 2.65 tons of carbon dioxide per ton of finished steel, roughly 32% higher than the global average of 2 tons, and account for 10-12% of the country's total emissions, the document ​showed.

India has been hit by the European Union's carbon border tariff, ⁠which from ‌January this year imposed fees on imports of steel, cement and other high-carbon ​goods, forcing ​New Delhi to scout for alternative export markets.

The policy proposes promoting gas-based steelmaking, increasing ⁠the use of steel scrap, and offering incentives for continuous emission ​reduction.

It also calls for collaboration with the oil ministry to secure overseas ​gas supplies and partnerships.

The steel ministry did not respond to a Reuters email seeking comments.

Only 21% of blast furnace capacity and 5% of direct reduced iron (DRI) capacity - or sponge iron produced using gas or coal without melting it - have access to gas pipeline infrastructure, the document said.

"As steelmaking capacity grows, decarbonising the sector is crucial for meeting India's net-zero emissions target by 2070," the document said.

Buoyed by ‌rapid economic expansion and increasing infrastructure spending, India has set a target to expand crude steel capacity to 400 million tons by 2035-36, up from current output of ​about 168 million ​tons.

The country also aims ⁠to more than double exports to 20 million tons.

Capacity expansion is expected to boost jobs in the steel sector, which employs 2.8 million people and accounts for 2.5% of the country's nearly $4 trillion economy.

India ​will need capital investment of around 17 trillion rupees ($183.41 billion) to reach 400 million tons of crude steel capacity, potentially creating over 3 million jobs by 2035-36, the document said.

The policy also calls for cutting import dependence on coking coal, a key raw material, to 80% by 2035-36 from about 90% currently.

India has identified 19 countries for collaboration, including Australia, Russia, Japan, Germany and the United States.