Verma laid out the challenges, stating that the steel sector, heavily reliant on coal, is a key contributor to emissions. "Steel is what you cannot live without, and its emissions are what we cannot live with," she remarked, noting that the sector is classified as a “hard to abate” industry due to its dependence on carbon for both energy and chemical processes in steelmaking.
India’s steel sector, responsible for 12% of the country’s total global emissions, faces a challenging journey toward decarbonization, said Neha Verma, Director, Ministry of Steel. Speaking at the Economic Times Energy Leadership Awards, Verma highlighted that India currently emits 2.54 tons of CO2 per ton of crude steel, compared to the global average of 1.91 tons. "We have a long way to go," Verma said, underscoring the significant carbon footprint of India’s second-largest steel-producing industry.
Verma laid out the challenges, stating that the steel sector, heavily reliant on coal, is a key contributor to emissions. "Steel is what you cannot live without, and its emissions are what we cannot live with," she remarked, noting that the sector is classified as a “hard to abate” industry due to its dependence on carbon for both energy and chemical processes in steelmaking.
Committed to growth, but with responsibility
Despite these challenges, India’s steel industry is slated for rapid growth, with production expected to increase from 170 million tons to 300 million tons by 2030. Verma emphasized that this expansion will be guided by a commitment to sustainability. “We are committed to growing sustainably and responsibly,” she said, citing the Ministry of Steel’s recently released report on greening the sector. The report outlines a roadmap and action plan for reducing emissions while meeting ambitious production goals.
India’s strategy involves incremental emissions reductions, with a target to lower the emission intensity of steel production from 2.54 tons to 2.2 tons of CO2 per ton by 2030. “There’s no silver bullet here,” Verma warned, describing the complex technological, financial, and structural challenges the sector faces in its decarbonization efforts.
In the short term, energy efficiency and renewable energy offer the best opportunity to reduce emissions, Verma said. “Energy efficiency alone can help us reduce emissions by more than 12%,” she noted, pointing out that India’s steel sector consumes more energy per ton of steel than the global average. Improving energy efficiency will not only reduce carbon emissions but also lower production costs, she added.
Verma also highlighted the need for increasing the share of renewable energy in the steel sector, which currently accounts for only 7% of electricity consumed. “If we increase renewable energy penetration to 50%, we could reduce emissions by another 10-12%,” she said. However, the financial burden of adopting new technologies remains a significant hurdle for many companies in the sector.
Another promising area for reducing emissions lies in the adoption of a circular economy approach, particularly through the increased use of scrap steel. Verma noted that while India currently uses 21% scrap in steel production, the global average is 31%, and countries like the U.S. use as much as 65%. “Scrap steel can reduce emission intensity to 0.5 tons of CO2 per ton of steel,” she said, adding that the Ministry of Steel is working to improve the availability and recyclability of scrap in the Indian economy.
Long-term solutions: Green hydrogen and carbon capture
Looking beyond 2030, Verma pointed to green hydrogen as a transformative technology for the steel industry. “Green hydrogen has the power to completely replace carbon in steelmaking,” she explained, adding that pilot projects are already underway to test the viability of using hydrogen in steel production. However, the high cost of green hydrogen—currently $5-6 per kilogram, compared to the industry’s target of $1-1.5 per kilogram—remains a major obstacle.
Another long-term solution is carbon capture, utilization, and storage (CCUS), which Verma described as “the most promising tool” for reducing emissions from coal-based blast furnace operations. “CCUS can help reduce emissions by up to 50%,” she said, although the high cost of implementing these technologies remains a challenge for the industry.
Government’s role in supporting greener steel
Verma emphasized the importance of government support in helping the steel sector transition to greener production methods. The Ministry of Steel is working on defining what constitutes “green steel” and is developing a Green Public Procurement Policy, which would mandate the use of a certain percentage of green steel in public infrastructure projects. "Even if 20% of the steel used in public projects is green, the overall cost increase would be just 1.1%, but the environmental benefits would be substantial," she explained.
Conclusion: The road ahead
As India’s steel industry continues to grow, the path to decarbonization remains steep and complex. Verma stressed that while the challenges are significant, the sector’s commitment to sustainability, combined with technological innovation and government support, will help India meet its climate goals. “The path ahead is not easy, but with the right mix of technology, finance, and policy, we can achieve our goals,” Verma concluded.