India Steel Expansion Plan Tests Climate And Coal Limits

India has drafted a plan to nearly triple its steelmaking capacity to 604 million tonnes by 2047, while cutting the carbon emitted per tonne produced. The draft National Steel Policy: Vision 2047 expects demand for finished steel to reach 505 million tonnes. Because steel underpins housing, roads, rail and power projects, the draft will influence how Indian cities are built and how much carbon sits inside them.

The scale of the jump is clear from current figures. Installed capacity is about 220 million tonnes a year, and crude steel output rose from 89 million tonnes in 2014-15 to 170 million tonnes in 2025-26. Finished steel consumption grew from 77 million to 164 million tonnes over the same period. The draft projects per capita use rising from 116 kg to 302 kg and exports reaching 45 million tonnes. Construction is the main driver. Infrastructure and building account for nearly 67 per cent of domestic consumption, with vehicles, engineering goods, appliances and packaging making up another 28 per cent. The draft names urbanisation, renewable energy projects and new manufacturing as the main sources of future demand. Urban planners say this makes material efficiency in design a policy question, not only an engineering one, since lighter structures and reused materials can lower demand.

Raw materials are the sector’s weak point. They account for about 65 to 70 per cent of production costs, and India imports roughly 92 per cent of its coking coal, the coal grade used to fuel blast furnaces. That leaves producers exposed to global prices and supply shocks. The draft proposes expanding domestic mining and coal washeries, diversifying overseas sources and improving coal blending. Environmental specialists note that more domestic coal mining brings its own land, water and community costs. The climate target is where the draft will be tested. It seeks to lower average emissions from 2.54 tonnes of carbon dioxide per tonne of crude steel to 1.54 tonnes by 2047. Proposed routes include energy efficiency, renewable electricity, greater use of recycled scrap and hydrogen-based steelmaking, which uses hydrogen instead of coal to strip oxygen from iron ore. Industry experts point out that a lower intensity can still mean higher total emissions if output nearly triples, so absolute emissions will matter as much as the ratio.

Other priorities include specialty steel, scrap collection and recycling systems, and domestic manufacture of steelmaking equipment. Digital tools are expected to improve productivity and resource use. The draft depends on coordination among the Centre, states and industry. The next step is public consultation, where clearer timelines, funding for green steel and published emissions data will show whether the expansion can fit India’s climate commitments.

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India Steel Expansion Plan Tests Climate And Coal Limits