PM Modi Highlights Carbon Capture As Key To Greening India’s Steel Industry

On Wednesday, Prime Minister Narendra Modi underlined the transformative potential of carbon capture technologies in steering India’s steel industry towards a cleaner and more competitive future, aligned with the nation’s Net Zero 2070 pledge.

He noted that clear policy direction, targeted investments and hydrogen-based initiatives are positioning the sector to contribute meaningfully to the vision of a Viksit Bharat.

Referring to an article by HD Kumaraswamy, the Prime Minister observed that India’s iron and steel industry stands at a crucial stage of its evolution.

As the world’s second-largest producer of crude steel, with output of approximately 152 million tonnes in FY 2024–25, the sector plays a central role in economic growth, infrastructure development and employment generation.

Under the National Steel Policy 2017, India aims to expand crude steel capacity to 300 million tonnes by FY 2030–31, with a long-term target of 500 million tonnes by 2047, reinforcing the strategic importance of steel in national development.

Emissions Challenge and Global Competitiveness

At the same time, Kumaraswamy pointed out that steel manufacturing remains energy- and emissions-intensive.

The industry largely relies on blast furnace methods and coal-based direct reduced iron processes, with coal serving as the primary fuel and reducing agent.

As a result, the sector contributes an estimated 10 to 12 per cent of India’s total greenhouse gas emissions.

He stressed that cutting emissions is critical not only to meet the 2070 Net Zero target but also to maintain the global competitiveness of Indian steel as international markets increasingly favour low-carbon production.

The government has initiated structural reforms to support environmentally responsible steelmaking.

A key measure is the rollout of a green steel taxonomy that sets emission intensity benchmarks below 2.2 tonnes of CO₂ equivalent per tonne of finished steel.

The framework introduces a 3- to 5-star rating system to classify and promote low-emission steel as ‘green steel’.

This initiative is expected to stimulate demand across construction, infrastructure and manufacturing sectors, while incentivising producers to adopt cleaner technologies.

In parallel, Kumaraswamy highlighted that the Steel Ministry has received an allocation of Rs 455 crore under the National Green Hydrogen Mission to pilot the use of green hydrogen in steel production.

This move reflects the government’s commitment to advancing breakthrough technologies capable of reshaping steel manufacturing in the coming years. Collectively, these measures indicate that decarbonising steel forms a core component of India’s climate and industrial strategy.

Carbon Capture as a Critical Enabler

While ongoing initiatives aim to advance low-carbon steelmaking, Kumaraswamy emphasised that achieving Net Zero will also require progress in carbon capture, utilisation and storage (CCUS).

In this regard, the Union Budget’s allocation of Rs 20,000 crore to pilot CCUS technologies across five sectors, including steel, represents a significant policy intervention.

For steel producers, carbon capture is particularly important because certain process emissions remain difficult to eliminate, even with improved energy efficiency and renewable integration.

Carbon capture technologies can directly address these emissions by trapping carbon dioxide released from blast furnaces and direct reduced iron units before it enters the atmosphere.

By enabling substantial reductions while allowing existing facilities to continue operating, CCUS offers a pragmatic pathway for India, where a considerable share of steel production infrastructure will remain in use for decades.