India’s steel ministry requests budget support for decarbonization of the industry

The Ministry of Steel has requested 150 billion rupees ($1.74 billion) from the budget to stimulate low-carbon steel production. Reuters reports, citing government sources.

The Ministry of Steel plans to offer incentives to reduce emissions, boost research and development, improve the efficiency of raw material use, and encourage banks to lower interest rates on renewable energy loans, insiders said. The ministry did not respond to the agency’s request for comment.

As soon as the ministry is allocated funds, the proposal for incentives for steel mills, which will be valid until 2030, will be sent to the Cabinet for approval. India is also considering the use of green steel in government projects.

Finance Minister Nirmala Sitharaman will present the federal budget for the 2025/2026 fiscal year on February 1 this year.

According to the Global Energy Monitor, steel producers in India generate 2.55 tons of carbon dioxide per ton of steel produced, which is 38% higher than the global average.

Last December, India announced a formula for classifying green steel. “Steel products produced with CO2 emissions of less than 2.2 tons per ton of rolled steel will be considered green. Steel with emissions below 1.6 tons per ton of alloy will be classified as “five-star green”.