The steel industry is one of the most carbon-intensive industries in the country, and India plans a ₹5000 Cr scheme for decarbonizing the steel industry. The plan was unveiled by Steel Secretary Sandeep Poundrik on September 17, 2025, in New Delhi at the FT Live Energy Transition Summit India. The National Mission for Sustainable Steel project aims to hasten the adoption of alternative raw materials and clean steel-making technologies. In keeping with India’s larger pledge to reach net-zero emissions under the Paris Agreement, the program is anticipated to go into effect in the coming months.

What Does the ₹5000 Cr Scheme Aim to Achieve?

India plans a ₹5000 Cr scheme for decarbonizing the steel industry. With an emphasis on both significant and small steelmakers, the goal aims to encourage emission reductions across the board.

• Targeted Support: Secondary steel manufacturers, who frequently lack access to cutting-edge technology yet make a substantial contribution to overall emissions, will get between 75 and 80 percent of the total funds.
• Performance-Based Incentives: Businesses will be given funding in response to quantifiable decreases in their carbon footprint over prior years. The program ties rewards to decarbonization results rather than merely new technology uptake.
• Promoting Clean Technologies: The program encourages the use of carbon capture and storage (CCS), hydrogen-based steel production, and furnaces that run on renewable energy.
• Alignment with Global Goals: If India is to reach its climate goals, the steel industry must be addressed, as it contributes around 12% of the nation’s greenhouse gas emissions.

The program guarantees accountability while encouraging innovation and competitiveness in the steel sector by linking rewards to emission reductions.

Also Read: SIT Dismissed Allegations Against Vantara On Water Use, Carbon Credits

Why Is Decarbonizing the Steel Industry Important?

Steel’s significant reliance on coal and energy-intensive operations makes it a “hard-to-abate” industry. At 2.55 tonnes of CO₂ per tonne of crude steel, the industry’s current emission intensity is far greater than the global average of 1.9 tonnes.

Decarbonization is essential for the following principal reasons:

• Climate Commitments: Decarbonizing steel is critical to India’s goal of achieving net-zero emissions by 2070.
• Global Competitiveness: Low-carbon supply chains are becoming more and more popular in international marketplaces. If Indian steel companies don’t conform to these new criteria, they risk losing their competitive edge.
• Economic Growth with Sustainability: India’s economy, which is among the fastest-growing in the world, is expected to see a significant increase in demand for steel. Growth is guaranteed by clean technology without causing emissions to rise correspondingly.
• Public Health and Environment: Lowering air pollution levels, which have long been connected to health risks in nearby communities, will be made possible by reducing coal-based emissions from steel factories.

The plan not only gives the sector a financial boost, but it also marks a significant turn toward India’s sustainable industrial growth.

Also Read: Australia’s 2035 Emissions Target Falls Short Of Expectations At 62-70%