Can India Take the Lead in Green Steel?

The Indian iron and steel sector is responsible for 12% of total CO₂ emissions, making it the highest emitting industrial sector in the country. During the steel production process—which involves mining iron ore, processing this ore into pure iron, which is then turned into different grades of steel—it is the iron processing step that is responsible for most emissions. In India, this typically covers two routes: the blast furnace, used in larger plants, and coal-based rotary kilns, popular among small-scale players.

To achieve Net Zero by 2070, India needs to rapidly introduce new, low emission iron and steel-making technologies, which can steadily replace these existing process routes. Just as we’ve seen new low-emission alternatives make progress in the power sector (solar and wind) and start to gain momentum in road transport (battery electric vehicles), we need to develop and scale key technologies that can do the same for ironmaking.

Solutions are on the Horizon

In their latest report, Technology Ready Reckoner: Low Emission Ironmaking–Suitability to India, researchers at The Energy and Resources Institute (TERI) assess the most promising technologies being developed around the world. These include ironmaking routes using direct electrification, hydrogen, biomass and carbon capture, usage and storage (CCUS) technologies.

As of 2025, the vast majority of new pilot and demonstration projects and announcements for commercial-scale plants are in Europe, with a number of announcements also across North America, China and Australia. However, announcements in India are also starting to gather pace, with at least eight pilot- and demonstration-scale projects either underway or planned to start in the late 2020s. This includes blending hydrogen into blast furnaces at Steel Authority of India’s (SAIL) plant in Ranchi from 2027, Tata Steel’s research efforts in Jamshedpur, covering both CCUS and hydrogen blending, JSW Steel’s plan to demonstrate hydrogen blending at their gas-based steel plant in Vijayanagar, and JSPL’s CCUS project in Angul.

As projects move from testing to commercialisation, steel players will need to focus on those technology solutions that are most suitable to the Indian context. TERI’s assessment is that ironmaking furnaces that use green hydrogen, instead of natural gas or coal will be a vital part of the country’s future production mix. India is set to become one of the most competitive locations for green hydrogen production, supported by policy efforts under the National Green Hydrogen Mission and early successes with major projects from AM Green in Kakinada, Andhra Pradesh and L&T at Indian Oil’s refinery in Panipat, Haryana.

Beyond green hydrogen solutions, TERI’s analysis suggests further research is required to develop several direct electrification technologies, such as molten oxide electrolysis (MOE) being developed by Boston Metal, which are at a too early stage to be deployed commercially before 2030. Further assessment of key CCUS technologies, particularly those using smelting reduction furnaces, such as Tata Steel’s HIsarna process, will be important, with major uncertainties around the scale of the CO₂ offtake market and the cost and location of key CO₂ storage sites.

Lastly, there may also be some role for biomass in the iron and steel sector, potentially replacing coal in existing processes. However, availability of sustainable biomass at an appropriate price will remain a concern, especially as several other sectors are banking on this limited resource for their own decarbonisation plans (see linked examples in aviation, road transport, cement and petrochemicals).

At a Green Crossroads

With some of the lowest cost renewable electricity and a booming green hydrogen sector, India is increasingly well-placed to make green steel competitively, for both domestic and overseas markets. This will only become true as climate policies start to tighten around the world, just as we’re seeing with the European Union’s Emissions Trading System, which is likely to be replicated across other jurisdictions.

Whilst significant investment is required to further develop these technologies, India is now the fastest growing steel sector in the world, providing fertile ground for testing and scaling new, innovative technologies. Learning from successes in indigenising solar, battery and electric vehicle supply chains with support from the production-linked incentive scheme, India can further explore indigenisation of key ironmaking technologies. This will be especially important where India has unique expertise, such as in the use of rotary kilns in much of the secondary steel sector, where hydrogen alternatives could be a possibility in future.

Through prioritising the most suitable technologies and leveraging key strengths, the Indian iron and steel sector can not only keep pace, but lead, in the green steel race.

(The author is visiting fellow, The Energy and Resources Institute)