Experts urge policy clarity, demand creation and financing support as India seeks to decarbonise steel

India’s steel sector, responsible for over 10 percent of the country’s emissions, faces the dual challenge of meeting surging demand and cutting its carbon footprint. Industry leaders, policymakers, and sustainability experts agree that technologies such as green hydrogen, carbon capture, and direct reduced iron (DRI) offer promise, but their adoption hinges on cost, policy clarity, and coordinated demand creation.

Experts pointed to a pressing need to balance growth with emission reduction targets. Current Indian producers emit about 2.5 tonne of carbon per tonne of crude steel, with aspirations to bring this down to 2 tonne per tonne of finished steel by 2030. “It is a hard-to-abate sector, but we cannot ignore its contribution to climate goals,” said Satya Kumarajani, Associate Partner at McKinsey and Company, who moderated the session.

These discussions took place at the ISA Steel Conclave in New Delhi on Tuesday, during a panel on “Decarbonising the Future: Strategies for Reducing Carbon Footprint in the Steel Industry.”

Abhay Bakre, Mission Director at the Ministry of New and Renewable Energy, stressed that green hydrogen is a critical pathway. He argued affordability will follow policy stability, citing solar power’s dramatic fall in costs. JSW Group’s Chief Sustainability Officer Prabodha Acharya emphasised mandated demand creation, saying, “If there is a pool, supply will follow.” Tata Steel’s Rajiv Mangal added that financing models, especially transition finance, are essential to accelerate decarbonisation.

For Jindal Steel’s Naveen Ahlawat, the immediate task is to optimise available energy resources. He pointed to valorising by-product gases and pursuing color-agnostic hydrogen use until costs fall further. “By 2030 itself, we could see hydrogen at USD 1.5 per kg,” he predicted, noting how fast solar energy costs declined in the last decade.

Experts also underlined the importance of global carbon markets, technology sharing, and lessons from India’s renewable energy expansion. Joshua Wycliffe of the International Solar Alliance said that India’s policy model in solar could serve as a template for green hydrogen.
While optimism on technological innovation was evident, speakers repeatedly stressed that policy levers and demand incentives would be as decisive as engineering breakthroughs. The steel sector, they agreed, must prepare now to remain globally competitive in a carbon-constrained future.

India, as the world’s second-largest steel producer, remains more dependent on coal-based blast furnaces than peers like the United States, where electric arc furnaces dominate. This reliance makes the transition both more urgent and more complex.