Will India's Green Steel Demand Reach 179 Million Tons by 2050?
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Synopsis
India's green steel demand is projected to skyrocket to 179 million tons by 2050, driven by the country's commitment to sustainable practices in key sectors. Explore how this shift presents both challenges and opportunities for India's industrial landscape.
Key Takeaways
- India's green steel demand is projected to reach 179 million tons by FY50.
- The automotive, infrastructure, and construction sectors are key drivers of this demand.
- Green steel production is aligned with India's climate goals for 2047.
- Current steel consumption is at 136 million metric tons, expected to rise significantly.
- Production costs for green steel are anticipated to decrease as technology evolves.
New Delhi, July 29 (NationPress) India’s demand for green steel is projected to experience remarkable growth, anticipated to hit around 179 million tons by FY50, as reported on Tuesday.
This increase will be fueled by the fast-expanding automotive, infrastructure, and construction industries, which are shifting towards more sustainable manufacturing methods, according to an EY Parthenon study.
The report outlines that India aims for a steel production capacity of 500 million tons annually by 2047, in line with its climate objectives.
“Transitioning to green steel is undoubtedly a significant transformation—it presents challenges but also vast opportunities for India's industrial landscape,” remarked Kapil Bansal, Partner - Energy Transition and Decarbonisation at EY Parthenon.
Although the costs are currently perceived as high, this scenario is changing swiftly. With the rise in carbon pricing and decreasing costs of green hydrogen, what was once seen as a luxury for sustainability is rapidly becoming essential for business, he added.
Utilizing an emissions intensity benchmark of below 0.5 tons CO2 per ton of crude steel, the analysis predicts that the demand for green steel—currently minimal—will escalate to 4.49 million tons by FY30, as per the report.
The construction sector is forecasted to lead this shift with 2.52 million tons, followed by infrastructure at 1.5 million tons and the automotive sector at 0.48 million tons.
According to the report, by FY40, the total demand is expected to nearly triple to 73.44 million tons.
India's current steel consumption is at 136 million metric tons, with the construction and infrastructure sectors together making up 78 percent of the finished steel demand, the report indicates.
This figure is projected to rise to 390 million tons by FY50, propelled by swift urbanization and infrastructure enhancements.
Prices of traditional BF-BOF steel are forecasted to rise by 81 percent by 2050 due to increasing carbon taxes, escalating from the current $660 per ton to $1,193 per ton, the report highlighted.
However, the premium for green steel produced through hydrogen-based DRI technology is anticipated to diminish as production increases and costs fall.
At present, the green steel premium results in modest production cost increases across sectors: 4.1 percent for automotive production, 3.7 percent for construction, and 5.2 percent for infrastructure projects, as reported.
Point of View
I emphasize the significance of transitioning to sustainable practices in India's steel industry. The growth potential in green steel reflects a broader commitment to environmental responsibility and offers vast opportunities for innovation and economic advancement in our nation.
NationPress
30/07/2025
Frequently Asked Questions
What is green steel?
Green steel refers to steel produced using environmentally friendly methods, significantly reducing carbon emissions compared to traditional steel manufacturing processes.
How will green steel impact the construction industry?
The construction industry is expected to lead in adopting green steel, which will enhance sustainability in building practices and align with climate goals.
What are the expected costs associated with green steel?
While currently higher than traditional steel, the costs of green steel are expected to decrease as production scales up and technology advances.
What are the benefits of using green steel?
Using green steel contributes to reduced carbon emissions, promotes sustainability, and aligns with global climate change initiatives.
When is India expected to reach 179 million tons of green steel demand?
India's demand for green steel is projected to reach approximately 179 million tons by FY50.
