India's Core Industries
Green Steel: Cleaning Up a Dirty Industry
Why steel is one of the biggest sources of carbon emissions, the technologies that could decarbonise it, and India's steps toward green steel.
Steelmaking produces around 7 to 9 percent of global carbon dioxide emissions, mainly from using coal to turn iron ore into iron.
Why steel is hard to decarbonise
- Coal provides both heat and the chemical reaction (reduction) that removes oxygen from iron ore.
- Plants are expensive and last decades.
- Steel demand keeps growing, especially in developing countries like India.
India’s steel is especially carbon-intensive, partly due to coal-based DRI plants.
Paths to green steel
- Scrap-based electric arc furnaces powered by renewable electricity.
- Hydrogen-based DRI: using green hydrogen instead of coal to reduce iron ore, producing water instead of CO2.
- Natural gas DRI as an intermediate step.
- Carbon capture at existing plants.
- Efficiency improvements.
Costs
Green steel currently costs more than conventional steel. Green hydrogen remains expensive, and large renewable power supplies are needed.
India’s steps
- In 2024, India released a green steel taxonomy, defining green steel by emission levels and a star rating system.
- Companies like JSW and Tata Steel have announced green steel projects and hydrogen pilots.
- Government procurement may prefer green steel in future.
Trade pressure
The EU’s carbon border adjustment mechanism puts a cost on emissions in steel exported to Europe, adding pressure on Indian producers to decarbonise.
A steel company runs a pilot using hydrogen to reduce iron ore at one plant. It costs more today, but if hydrogen prices fall, the technology could cut emissions dramatically and help the company sell in carbon-conscious markets.
Coal is also used as a chemical reducing agent, so decarbonising steel requires new processes like hydrogen DRI.
- Steel produces around 7 to 9 percent of global CO2 emissions.
- Coal's dual role makes steel hard to decarbonise.
- Scrap EAFs, hydrogen DRI and carbon capture are key paths.
- India released a green steel taxonomy in 2024.
No recording for this one yet - EconReader can read it aloud for you.