Bridging the Green Gap: India's Crucial Role in the Future of Steel

India must strategically use public capital to bridge the financing gap for green steel projects amid its planned capacity expansion. Early public finance intervention can prevent carbon lock-in, supporting cleaner technology adoption in steel production, crucial for achieving net-zero goals.

India faces a critical decision as it plans to expand steel capacity from 180 million tonnes to 300 million tonnes. The Institute for Energy Economics and Financial Analysis (IEEFA) emphasizes the need for strategic public finance to adopt cleaner technologies and avoid carbon lock-in from conventional methods.

Carbon lock-in poses a significant challenge, as new steel plants with life spans of 30 to 40 years could hinder India's climate goals if built with conventional technology. The IEEFA notes that fossil-fuel-based industrial processes remain prevalent, despite substantial investments in renewable energy.

The Indian government is working on a National Mission for Sustainable Steel, aligning incentives and resources towards cleaner production. Other measures like Green Public Procurement and carbon trading schemes signal intent but need robust backing to transform the steel sector's environmental footprint.

(With inputs from agencies.)