The Indian government is crafting a special incentive package aimed at accelerating green steel manufacturing within the country. Spearheaded by the Ministry of Steel, this initiative seeks to support India’s transition to sustainable industrial practices by encouraging the steel sector to adopt low-carbon production methods. Traditional steel production is highly energy-intensive and contributes significantly to carbon emissions, making decarbonization a priority as India advances its net-zero goals.

Key components of this incentive package include promoting green hydrogen and renewable energy sources for steel production, offering financial incentives and subsidies for companies investing in green technologies. Additionally, the package will support the establishment of electric arc furnaces, which are less carbon-intensive than traditional coal-based blast furnaces, allowing manufacturers to reduce their fossil fuel dependency.

This incentive aligns with India's broader objectives to minimize its carbon footprint and lead by example in climate responsibility. The initiative supports the use of renewable power, carbon capture, and recycling to decrease emissions and create a more environmentally responsible steel industry. Green steel production, relying on hydrogen-based methods and scrap-based electric furnaces, also aims to reduce import dependency for critical resources like coal, enhancing energy security and resource efficiency within the industry.

Moreover, as global demand for green steel rises, this package positions Indian manufacturers to remain competitive in international markets that are increasingly enforcing low-carbon mandates. India’s steel industry—among the largest in the world—would benefit from such incentives, facilitating technological advancements and attracting foreign investment into the green steel sector. These incentives are also part of India’s commitment under the National Steel Policy and the Paris Agreement to develop a clean energy ecosystem and reduce overall emissions across sectors.

By encouraging innovative and sustainable practices, the government’s plan is expected to not only stimulate economic growth but also pave the way for a greener industrial future, contributing to India’s stature as a global leader in sustainable steel manufacturing.