August 15, 2025

India’s steel sector—one of the world’s largest—is getting a new masaledar makeover to fight carbon pollution! The government is cooking up a fresh policy that will pay steel plants to slash their carbon emissions. This is not just any subsidy but a unique reward system where mills earn money only if they prove they have reduced their CO2 per tonne of steel every year. Here’s the juicy detail: For every 0.1 tonne drop in CO2 emissions per tonne of steel produced, plants will get ₹100. But there’s a cap—maximum ₹1,000 per tonne annually. No improvements? No cash! This clever plan is designed to protect India’s whopping $25-billion steel export market from new carbon taxes by the European Union. Who qualifies? Only plants set up on or before March 31, 2025, and their carbon data will be checked and verified by reliable bodies like BEE (Bureau of Energy Efficiency) and the National Institute of Secondary Steel Technology. Cheating on numbers? That’s a big no-no and can lead to disqualification plus recovery of paid funds. Currently, India’s steel makes 2.5 tonnes of CO2 per tonne of crude steel, better than 2.65 in 2015 but still above the global average of around 1.85 to 1.92 (World Steel Association). The world’s cleanest figures go as low as 1.4 tonnes (IEA estimates). This scheme will run from fiscal years 2027 to 2031 and hopes to cover 60 million tonnes of sustainable steel. Remember, India churned out 152 million tonnes of crude steel in FY25, making it the world’s second-biggest producer. But despite this, the average Indian uses only 108 kg of steel per year. Plus, the steel industry belches out about 12% of India’s total CO2 emissions. In December, India officially defined “green steel” as steel made with less than 2.2 tonnes of CO2 per tonne. The government even introduced a star rating system. Steel that is dirtier than this won’t get the green star. However, the path is tough. Much of India’s steel runs on low-grade coal and iron ore—pollution heavyweights. Almost 44% of secondary steel comes from coal-based methods, some of the dirtiest around. Old-style machines called horizontal rotary kilns block cleaner methods using hydrogen or gas. And there’s a shortage of scrap metal, so the better electric furnaces cannot grow as fast. Also, natural gas, a cleaner fuel, is hard to get. To tackle this, the government plans strict benchmarks for emissions based on how the steel is made. In short, India is turning the heat up with this spicy plan to make steel cleaner, greener, and even more competitive on the global stage!

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Tags: India steel industry, Carbon emissions, Green steel, Financial incentives, Decarbonisation, Co2 reduction,