India steel decarbonisation projects gain global support

India is moving two major steel decarbonisation projects into a new phase after the Industrial Transition Accelerator selected them for support under its India Project Support Programme. The projects, in Odisha and Karnataka, could help address one of the country’s hardest industrial emissions challenges while testing whether cleaner steel can become commercially viable at scale.

The initiative has selected 11 Indian projects with potential investment exceeding $18 billion and estimated annual emissions reductions of more than 7.8 million tonnes of carbon dioxide. The programme is designed to help developers tackle financing risks, strengthen demand for lower-carbon products and prepare projects for final investment decisions.For the steel sector, the selected portfolio includes a carbon capture, utilisation and storage project at a large steel complex in Angul, Odisha. The proposed system is expected to capture around 1–1.2 million tonnes of CO₂ annually from gases associated with direct reduced iron production. The captured carbon would be used as an input for producing lower-carbon fuels and chemicals, potentially creating a pathway beyond simply storing industrial emissions.

The second project is centred on Vijayanagar in Karnataka, where a steel producer, a global mining group and a carbon-capture technology company have been studying the deployment of modular capture equipment. The proposed system is designed to capture up to 100,000 tonnes of CO₂ a year. A feasibility study was launched earlier, with a decision on possible installation expected after technical and economic assessments are completed.The significance of these steel decarbonisation projects extends beyond individual plants. Steel is fundamental to housing, transport networks, renewable-energy infrastructure and urban construction. India’s expanding cities will therefore continue to depend heavily on steel, making the sector’s emissions trajectory increasingly relevant to long-term infrastructure costs and urban climate resilience.

Yet steel decarbonisation projects face a difficult commercial test. Industry experts point to expensive capital, higher costs for suitable raw materials, uncertain demand for premium low-carbon steel and limited business models for carbon capture. These constraints mean that technical feasibility alone will not guarantee investment.The next challenge is converting project support into finance, construction and measurable emissions cuts. For India, success will depend on whether emerging technologies can reduce industrial carbon intensity without making essential infrastructure materially more expensive. That balance will determine how quickly cleaner steel can move from demonstration projects into the mainstream supply chains supporting the country’s next generation of cities.

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India steel decarbonisation projects gain global support