PLI, RE incentives for ‘Green Steel Mission’ to decarbonise steel industry

The government is working on a Rs 150 billion ‘Green Steel Mission’ to reduce carbon emissions in the steel sector, which currently contributes 10-12 per cent of the country’s total emissions. 

The mission includes a production-linked incentive (PLI) for green steel, incentivising renewable energy adoption, and mandating green steel procurement by government bodies.

These measures aim to align with India’s decarbonisation goals, with the Ministry of Steel collaborating with the Ministry of New and Renewable Energy (MoNRE) under the “National Green Hydrogen Mission” to increase the use of green hydrogen in steel manufacturing. A budget of Rs 45.5 billion has been allocated until FY2029-30 for pilot projects under this initiative. To reduce reliance on imports, the government introduced a PLI scheme for speciality steel.

Companies participating in this scheme have committed investments of Rs 271.06 billion, expecting to produce 7.90 million tonnes of speciality steel. 

As of October 2024, Rs 175.81 billion has been invested, generating over 8,660 jobs. India has abundant reserves of iron ore and non-coking coal, but coking coal imports have steadily increased. Import volumes grew from 51.20 MMT in 2020-21 to 58.12 MMT in 2023-24, with 30.19 MMT imported between April and September 2024.