The Centre is preparing to roll out a new incentive scheme with a proposed outlay of Rs 5,000 crore to accelerate the adoption of cleaner technologies in the steel sector, as part of its broader push to reduce industrial carbon emissions and support India's climate commitments, according to government officials.
The proposed scheme, titled the National Strategy for Sustainable Secondary Steel, is expected to be launched within the next three months. It is aimed at encouraging steelmakers to adopt low-carbon technologies, improve resource efficiency and transition towards more sustainable production methods.
A senior government official said the scheme is currently being finalised and is likely to be unveiled after receiving the necessary approvals. Another official familiar with the development said the proposal may soon be placed before the Union Cabinet for clearance.
"The scheme may go for approval of the Union Cabinet," the official said. The initiative will be applicable to steel producers across the country, covering both primary and secondary steel manufacturers. However, officials indicated that a substantial portion of the financial support will be directed towards secondary steel producers, many of whom operate with relatively smaller capacities and face greater financial constraints in adopting advanced, cleaner technologies.
The National Strategy for Sustainable Secondary Steel seeks to promote the use of energy-efficient manufacturing processes, cleaner production technologies and alternative raw materials across different stages of steelmaking. The objective is to significantly reduce the carbon footprint of the domestic steel industry while enhancing its long-term competitiveness and sustainability.
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The proposed scheme is expected to complement the government's broader strategy of decarbonising hard-to-abate sectors and encouraging the use of environmentally friendly technologies in heavy industries. It also aligns with India's efforts to modernise its manufacturing base while balancing economic growth with environmental responsibility.
The initiative assumes added significance as India is a signatory to the Paris Agreement and has committed to achieving net-zero carbon emissions by 2070. Decarbonising the steel sector is considered a critical component of that roadmap, given the industry's high energy consumption and dependence on fossil fuels.
The steel industry is among the largest contributors to industrial greenhouse gas emissions worldwide. According to official data, India's steel sector accounts for around 10-12 per cent of the country's total greenhouse gas emissions. The industry's emission intensity currently stands at approximately 2.55 tonnes of carbon dioxide per tonne of crude steel, significantly higher than the global average of about 1.9 tonnes of CO2 per tonne of crude steel.
Officials believe that wider adoption of clean technologies and sustainable manufacturing practices will help lower emission intensity, improve energy efficiency and strengthen the global competitiveness of India's steel industry as international markets increasingly prioritise low-carbon products.
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