India’s Green Steel Revolution: What Is 25% Procurement Rule?

The Indian government is finalising a Green Steel Procurement Policy that could mandate 25% of public steel purchases to be sourced from low-emission, eco-friendly production methods. This move aims to stimulate demand for green steel, making India a global leader in climate-friendly industrial practices.

Background

Green steel refers to steel produced using low-carbon technologies such as hydrogen-based Direct Reduced Iron (DRI) or electric arc furnaces powered by renewable energy, instead of traditional coal-based blast furnaces. Since the steel industry is one of the world’s most carbon-intensive sectors, transitioning to cleaner production is crucial for achieving India’s climate targets.

Significance

The steel industry contributes around 10–12% of India’s total greenhouse gas emissions, making its decarbonisation vital. Steel is the backbone of infrastructure, automobiles, and manufacturing, and greening the sector ensures that industrial growth does not come at the cost of environmental sustainability. As the second-largest steel producer globally since 2018, India’s leadership in green steel can enhance its global climate credentials and trade competitiveness.

Objectives

The key aim of the policy is to create market demand for green steel, which currently faces stiff competition from cheaper, high-emission alternatives. By mandating 25% public procurement, the government seeks to provide the industry with a strong initial push, incentivizing private sector adoption and innovation in low-carbon steelmaking technologies.

Key Features

  1. Green Steel Procurement Policy mandating 25% of public steel purchases.
  2. Implementation by the Ministry of Steel through a dedicated roadmap.
  3. Adoption of hydrogen-based DRI, electric arc furnaces, and renewable energy in steel production.
  4. Use of steel scrap as a raw material, reducing emissions by up to 58%.
  5. Supportive schemes like the Steel Scrap Recycling Policy (2019), PAT Scheme, and the National Solar Mission to encourage low-emission production.

Challenges

Producing green steel remains more expensive than conventional methods. Technologies like hydrogen-based DRI and carbon capture are still evolving and not widely commercialized. Producing green hydrogen requires massive renewable energy capacity, which is still being scaled up. Additionally, the lack of mandatory norms and insufficient demand-side incentives make private players hesitant to invest heavily in green steel production.

Steps Taken in India

The Ministry of Steel has released a report, “Greening the Steel Sector in India: Roadmap and Action Plan”, based on recommendations from 14 task forces. The Steel Scrap Recycling Policy (2019) and vehicle scrapping rules (2021) aim to increase scrap availability. The National Solar Mission (2010) promotes renewable energy use, and the PAT Scheme incentivizes industries to reduce energy consumption, collectively pushing the sector towards low-carbon growth.

Shivam

As a Content Executive Writer at Adda247, I am dedicated to helping students stay ahead in their competitive exam preparation by providing clear, engaging, and insightful coverage of both major and minor current affairs. With a keen focus on trends and developments that can be crucial for exams, researches and presents daily news in a way that equips aspirants with the knowledge and confidence they need to excel. Through well-crafted content, Its my duty to ensures that learners remain informed, prepared, and ready to tackle any current affairs-related questions in their exams.

Recent Posts

Sikkim’s Soreng Becomes India’s First Notified Organic Fisheries Cluster under PMMSY

Sikkim's Soreng district has become India's first notified Organic Fisheries Cluster under the Pradhan Mantri…

8 minutes ago

Greenland Approves Trilateral Security Agreement with Denmark and US

Greenland’s parliament has passed a tripartite security agreement between Denmark and the United States to…

1 hour ago

Collins Dictionary Names ‘Mogging’ as Word of the Year 2026

Collins Dictionary has chosen ‘mogging’ as its word of the year for 2026. The slang…

2 hours ago

Uttarakhand to Observe November 28 as Disaster Management Day Every Year

The state government of Uttarakhand has declared November 28th as the annual ‘Disaster Management Day’…

3 hours ago

India Re-elected as President of International Solar Alliance for Third Consecutive Term

India has been re-elected as President for the third time at the ninth session of…

3 hours ago

Keisha Lance Bottoms Makes History as First Black Woman Elected US Governor

Keisha Lance Bottoms has made history by becoming the first Black woman ever to be…

4 hours ago