India’s steel industry, a cornerstone of its industrial growth, is also the world’s highest emitter of carbon dioxide per ton of finished steel. Producing 2.6 tons of CO2 per ton of finished product (tcs), the emissions are significantly higher—20–25% more—than those of China, the world’s second-largest emitter, according to a 2022 European Commission study. These numbers starkly contrast with the global average of 1.92 tons of CO2/tcs recorded in 2023.
A primary reason for these elevated emissions lies in the coal-dominated production process. Indian steelmakers rely heavily on coal-based direct reduced iron (DRI), which emits 3.0–3.1 tons of CO2 per ton of steel. In comparison, electric arc furnaces (EAFs) using scrap steel emit just 0.7 tons of CO2. However, India faces a shortage of scrap and limited natural gas availability, forcing continued reliance on coal. Globally, India is the second-largest steel exporter to the EU after South Korea, yet its emission intensity remains significantly higher. While South Korea emits 1.6 tons of CO2/tcs, and Turkey leads with the lowest emissions at 1.0, India lags far behind in adopting cleaner technologies.
India’s leading steelmakers, including Tata Steel and JSW Steel, have set ambitious goals to reduce emissions by 2030. Tata Steel aims to cut emissions to 1.85 tons of CO2/tcs, while JSW targets 1.95—still above the global average. However, achieving even these reductions will require significant investment, advanced technologies, and policy support. To combat emissions, Indian steelmakers are exploring measures like reducing coke usage, increasing scrap recycling, and upgrading ore quality. Yet, these solutions are insufficient without substantial government support. Unlike the EU and US, which provide financial backing for decarbonisation, Indian steelmakers face funding constraints, hampering the adoption of green technologies.
A potential breakthrough lies in transitioning to hydrogen-based steelmaking powered by renewable energy. However, the technology’s high costs make it unattainable for large-scale use. Experts estimate that India needs to invest $120 billion to achieve its 2030 production target of 300 million tons, while simultaneously addressing its carbon challenge. As steel production rose by 11.8% in 2023 to 140.2 million tons, India’s challenge remains clear: balancing economic growth with environmental sustainability in the global steel industry.
