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17 Feb 2026·Source: The Hindu
5 min
EconomyEnvironment & EcologyScience & TechnologyEDITORIAL

India's Green Steel Transition: Policy, Procurement, and Economic Security

Transitioning to green steel is vital for India's economic and climate goals.

Editorial Analysis

India should transition to green steel to achieve net-zero emissions by 2070 and ensure economic security. Public procurement, fiscal support, and policy alignment are crucial for overcoming the cost barrier and promoting green steel adoption.

Main Arguments:

  1. India's net-zero emissions target by 2070 depends on scaling green steel production.
  2. The Ministry of Steel formed task forces to map decarbonisation pathways for the steel sector.
  3. Green steel production faces a cost barrier, requiring targeted fiscal support, GST rationalisation, and incentives.
  4. Public procurement can boost demand for green steel with a manageable impact on infrastructure project costs.
  5. Transitioning to green steel helps bypass carbon tariffs and insulates national projects from fossil fuel price volatility.
  6. Japan's Green Purchasing framework and California's Buy Clean model offer templates for aligning policy with market reality.
  7. India has introduced a Green Steel Taxonomy with a rating system to rank steel by emission intensity.
  8. Embedding Green Star ratings into product verification using the Made in India QR code infrastructure can address the trust deficit in green steel procurement.
  9. Procurement frameworks should shift focus to value for money, recognising sustainability and national economic interest.
  10. Production Linked Incentives and green hydrogen missions must be aligned with procurement tenders.
  11. Procurement policy should signal a shift towards higher-grade low-carbon steel over time.

Counter Arguments:

  1. Concerns around the green premium and verifiability have delayed final approval of green steel public procurement mandates.

Conclusion

The Ministries of Steel, Finance, and Environment must coordinate to link climate ambition with financial and procurement power. Focused pilots through centralised purchasers like the Indian Railways can create a living lab for green steel.

Policy Implications

The author advocates for: • Targeted fiscal support for green steel producers. • GST rationalisation and time-bound fiscal incentives. • Institutionalising green steel public procurement mandates. • Embedding Green Star ratings into product verification using the Made in India QR code infrastructure. • Shifting procurement focus to value for money, recognising sustainability. • Including certified low-carbon steel in the Schedule of Rates. • Aligning Production Linked Incentives and green hydrogen missions with procurement tenders. • Progressively tightening standards for green steel procurement after 2030.

India's path to net-zero emissions by 2070 depends on scaling green steel production. The Ministry of Steel formed task forces to map decarbonisation. Green steel production faces a cost barrier.

Targeted fiscal support, GST rationalisation, and incentives can help. Public procurement can boost demand, with minimal impact on infrastructure project costs. Green steel helps bypass carbon tariffs and insulates from fossil fuel price volatility.

Japan's Green Purchasing framework and California's Buy Clean model offer templates. India introduced a Green Steel Taxonomy. The Ministry seeks approval for green steel public procurement mandates.

A trust deficit exists in distinguishing certified green steel. Leveraging the Made in India QR code infrastructure and Quality Council of India's accreditation system can help. Procurement frameworks should recognise sustainability.

Production Linked Incentives and green hydrogen missions must align with procurement tenders. A roadmap should progressively tighten standards. Focused pilots through centralised purchasers like Indian Railways can create a living lab.

Ministries must coordinate to link climate ambition with financial and procurement power.

Key Facts

1.

India aims for net-zero emissions by 2070.

2.

Steel is one of India's largest industrial sources of emissions.

3.

The Ministry of Steel constituted 14 task forces for decarbonisation.

4.

Producing green steel carries high upfront costs.

5.

Public procurement can boost demand for green steel.

6.

Transitioning to green steel helps bypass carbon tariffs.

7.

India has introduced a Green Steel Taxonomy.

UPSC Exam Angles

1.

GS Paper III: Indian Economy - Industrial Policy, Infrastructure

2.

GS Paper III: Environment - Climate Change, Sustainable Development

3.

Focus on government policies, economic impact, and environmental sustainability

In Simple Words

India wants to cut its pollution to zero by 2070. Steelmaking is a big source of pollution. Making "green steel" costs more right now, but the government can help by buying it for projects like roads and bridges. This would encourage companies to make steel in a cleaner way.

India Angle

Think about building a house. If the government says builders must use green steel, it might cost a bit more upfront. But it also protects India from relying on expensive imported coal and avoids future taxes on dirty products.

For Instance

It's like choosing an energy-efficient AC. It costs more to buy, but saves money on electricity bills in the long run. Plus, it's better for the environment.

Cleaner steel means less pollution, a healthier environment, and a more stable economy for everyone. It's an investment in our future.

Green steel: cleaner for the planet, stronger for India's economy.

Visual Insights

Key Statistics on Green Steel Transition

Highlights key aspects of India's green steel transition, including policy initiatives and economic benefits.

Net-Zero Emissions Target
2070

India's commitment to achieving net-zero emissions by 2070 drives the need for green steel production.

Steel Industry Emissions Contribution
7-9%

The steel industry accounts for a significant portion of global greenhouse gas emissions, making decarbonisation crucial.

More Information

Background

The steel industry is a significant contributor to global carbon emissions. Traditional steelmaking processes rely heavily on coal, leading to substantial greenhouse gas emissions. The need to reduce these emissions has led to the concept of green steel, which involves using alternative production methods that minimize carbon footprint. This transition is crucial for countries like India, which have committed to ambitious climate goals. India's commitment to achieving net-zero emissions by 2070 necessitates a shift towards sustainable industrial practices, including green steel production. The government has been actively promoting various initiatives to encourage the adoption of cleaner technologies in the steel sector. These initiatives include the National Green Hydrogen Mission, which aims to promote the use of green hydrogen in industrial processes, including steelmaking. The high cost of green steel production compared to traditional methods remains a significant challenge, requiring policy interventions and financial support. Public procurement policies can play a crucial role in driving demand for green steel. By mandating the use of green steel in government projects, the government can create a market for these products and incentivize steelmakers to invest in cleaner technologies. This approach aligns with the broader objective of promoting sustainable development and achieving India's climate goals. The Ministry of Steel is actively working on developing a framework for green steel procurement, drawing lessons from international best practices.

Latest Developments

In recent years, there has been increased global focus on decarbonizing the steel industry. Several countries have announced targets and policies to promote green steel production. The European Union, for example, has introduced a Carbon Border Adjustment Mechanism (CBAM), which will impose tariffs on imports of carbon-intensive goods, including steel. This mechanism is designed to encourage other countries to adopt cleaner production methods. In India, the government has been actively exploring various policy options to support the green steel transition. This includes providing financial incentives, promoting research and development, and establishing standards for green steel production. The Production Linked Incentive (PLI) scheme has been extended to cover the steel sector, providing financial support to companies that invest in cleaner technologies. The government is also working on developing a green steel taxonomy to provide a clear definition of what constitutes green steel. The Ministry of Steel has formed task forces to map decarbonization pathways for the steel industry. These task forces are responsible for identifying the key challenges and opportunities in the green steel transition and recommending policy measures to accelerate the adoption of cleaner technologies. The government is also exploring the possibility of using public procurement to create demand for green steel, which could help to drive down costs and incentivize investment in cleaner production methods.

Frequently Asked Questions

1. What is 'green steel' and why is it important for India?

Green steel refers to steel produced using methods that significantly reduce carbon emissions, moving away from traditional coal-based production. It is crucial for India to achieve its net-zero emissions target by 2070 and to reduce reliance on imported coking coal.

2. What is India's target year for achieving net-zero emissions, and how does green steel contribute to this goal?

India aims to achieve net-zero emissions by 2070. Transitioning to green steel production is vital because the steel industry is one of India's largest industrial sources of emissions. Green steel production methods minimize the carbon footprint, aiding in achieving the net-zero target.

Exam Tip

Remember the target year: 2070. Link green steel to India's climate commitments.

3. What are the key challenges in scaling up green steel production in India?

The primary challenge is the high upfront costs associated with green steel production. There is also a trust deficit in distinguishing certified green steel.

  • •High production costs compared to traditional methods.
  • •Lack of established standards and certification processes.
  • •Trust deficit in distinguishing certified green steel.
4. How can public procurement be used to promote the adoption of green steel in India?

Public procurement can create demand for green steel, encouraging its production and reducing costs over time. Mandating the use of green steel in government infrastructure projects can significantly boost the green steel market. The Ministry seeks approval for green steel public procurement mandates.

5. What are the potential economic benefits for India in transitioning to green steel?

Transitioning to green steel can help India bypass carbon tariffs imposed by other countries and insulate the economy from the volatility of fossil fuel prices. It can also reduce the reliance on imported coking coal, enhancing economic security.

6. What policy measures and incentives can the Indian government implement to support green steel production?

Targeted fiscal support, GST rationalisation, and other incentives can help lower the cost barrier for green steel production. Public procurement policies can also guarantee demand. The government introduced a Green Steel Taxonomy.

7. What is the significance of the Green Steel Taxonomy introduced in India?

The Green Steel Taxonomy provides a framework for defining and classifying green steel, helping to establish standards and build trust in the market. This is important for distinguishing certified green steel and promoting its adoption.

8. What are some international examples of green procurement policies that India can learn from?

Japan's Green Purchasing framework and California's Buy Clean model offer templates for India to develop its own green procurement policies. These models demonstrate how government purchasing power can drive demand for sustainable products.

9. How might the transition to green steel affect the cost of infrastructure projects in India?

While green steel may have a premium, its impact on overall infrastructure project costs is estimated to be minimal. Steel typically accounts for around 18% of large infrastructure project costs, and even with a premium on green steel, the overall project cost increase is projected to be relatively small.

10. What recent steps has the Ministry of Steel taken to promote decarbonisation in the steel industry?

The Ministry of Steel has constituted task forces to map decarbonisation pathways for the steel industry. It is also seeking approval for green steel public procurement mandates and has introduced a Green Steel Taxonomy.

Practice Questions (MCQs)

1. Consider the following statements regarding India's Green Steel transition: 1. The Ministry of Steel has formed task forces to map decarbonisation pathways for the steel industry. 2. Public procurement of green steel can help bypass carbon tariffs and insulate from fossil fuel price volatility. 3. India's Green Steel Taxonomy seeks to distinguish certified green steel and address the trust deficit in the market. Which of the statements given above is/are correct?

  • A.1 and 2 only
  • B.2 and 3 only
  • C.1 and 3 only
  • D.1, 2 and 3
Show Answer

Answer: D

All three statements are correct. Statement 1 is correct: The Ministry of Steel has indeed formed task forces to map decarbonisation pathways for the steel industry, as mentioned in the summary. Statement 2 is correct: Public procurement of green steel can help bypass carbon tariffs and insulate from fossil fuel price volatility, as stated in the summary. Statement 3 is correct: India's Green Steel Taxonomy aims to distinguish certified green steel and address the trust deficit in the market, as mentioned in the summary.

Source Articles

Transitioning to green steel - The Hindu

The Hindu·17 Feb 2026

Green steel can shape India’s climate goals trajectory - The Hindu

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ACME Group plans to invest ₹5,000 crore to produce green steel - The Hindu

The Hindu·17 Feb 2026

Steel Ministry approves 13 task forces for ‘Green Steel’ - The Hindu

The Hindu·17 Feb 2026

‘India’s steel industry setting new benchmark in green production’ - The Hindu

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