The Government of India is considering mandating the use of ‘green steel’ in government projects with the goal of decarbonizing one of the most hard-to-abate sectors, Steel Minister Jyotiraditya Scindia told Parliament this week.

Green steel or low-carbon steel is steel manufactured without the use of fossil fuels.

The government has embarked on a string of initiatives to bring down carbon emissions in the steel industry and help it reach net zero by 2070.

As a short-term measure, the government is already promoting the use of renewable energy and energy efficiency measures in the steel sector to minimize emissions by 2030.

For the medium term until 2047, the focus of the steel sector will be on green hydrogen and carbon capture. As part of the initiative, the Ministry of New and Renewable Energy has made the steel sector a stakeholder in the National Green Hydrogen Mission.

Carbon capture is still at a nascent stage of implementation in India, with only a few sectors, such as steel, having implemented small-scale carbon capture projects, according to India’s 2021 Biennial Update Reports (BUR) to the United Nations Framework Convention on Climate Change furnished by the Ministry of Environment, Forest and Climate Change.

The BUR says CO2 emissions from the iron and steel industries were showing a downward trajectory, reducing to 4.75% in 2016 from 5.99% in 2014.

In the long term (2047-2070), the government will encourage the steel industry to explore disruptive alternative technological innovations to help achieve the transition to net zero by 2070.

Several Indian steel manufacturers are switching to renewable energy in varying degrees to power their operations. Not only will the use of solar and wind energy cut the industries’ power costs, but also help decarbonize their operations.

In July, JSW Steel announced that it was earmarking ₹100 billion (~$1.26 billion) for carbon reduction initiatives, including increasing the use of renewable energy to replace thermal power. It has entered into power purchase agreements with special purpose vehicles set up by JSW Energy to procure renewable energy through the group captive model.

Earlier, steel giant ArcelorMittal entered a strategic partnership with Greenko Group to develop a 975 MW ‘round the clock’ solar and wind energy project in Andhra Pradesh at an estimated cost of $600 million.

The global steel industry could eliminate carbon emissions by 2050 by investing $278 billion and using green hydrogen and recycling technologies, BloombergNEF (BNEF) said in a report last December.