India targets green steel below 0.9 tonnes CO2 per tonne by 2035

India's Ministry of Steel and NITI Aayog established a decarbonization roadmap for the iron and steel sector, which accounts for roughly 12 percent of national greenhouse gas emissions, with a Green Steel Taxonomy tightening to 0.9 tonnes CO2 per tonne by 2035. Steelmakers must prioritize low-carbon pathways to retain access to green capital and high-value international markets facing carbon border adjustments.

India's iron and steel sector accounts for approximately 12 percent of national greenhouse gas emissions, prompting the Ministry of Steel and NITI Aayog to establish an industrial decarbonization roadmap aligned with the 2070 net-zero commitment. A proposed Green Industrial Policy emphasizes direct reduced iron with electric arc furnaces, particularly hydrogen-based DRI-EAF, moving away from carbon-intensive blast furnace-basic oxygen furnace capacity. India's Green Steel Taxonomy currently defines green steel at 1.6-2.2 tonnes of CO2 per tonne of finished steel, tightening to 0.9 tonnes by 2035.

The Indian steel industry is directly affected as it plans to expand capacity to 500 million tonnes by 2047 while avoiding high-carbon asset lock-ins. Producers reliant on coal-based BF-BOF methods face pressure to adopt cleaner technologies, with the Green Steel Taxonomy serving as a benchmark for sustainable financing and credibility to foreign investors. Greenfield projects using green hydrogen and renewable energy stand to benefit from interest subvention, viability gap funding, and direct capital-expenditure subsidies under evaluation by policymakers.

Steelmakers should prepare for the Carbon Credit Trading Scheme scheduled for operationalization in 2026, which introduces carbon pricing as a market-based incentive for cleaner production. Affected businesses should monitor production-linked incentives and green public procurement mechanisms creating stable markets, and track the tightening taxonomy threshold toward 0.9 tonnes CO2 per tonne by 2035. Prioritizing low-carbon pathways is essential to maintain access to green capital and high-value international markets amid global carbon border adjustments.

Key figure — Green steel emission target: 0.9 tonnes CO2 per tonne of finished steel by 2035