Emission intensity for most Indian steel companies has worsened over the last three years, at a time when global peers have achieved reductions, according to a report released Tuesday.

The report from the Institute for Energy Economics and Financial Analysis (IEEFA), ‘Decarbonisation readiness in India’s steel sector’, reveals that the Indian steel sector has embraced climate targets that align with the Paris Agreement. However, this ambition is not matched by corresponding progress in building the operational, technological, and financial infrastructure required.

The findings indicate that climate ambition has outpaced implementation. Five of the seven Indian companies have adopted Paris-aligned net-zero targets for 2050, but they scored comparatively poorly across the five key parameters assessed.

MUST READ: Iran war impact: Govt likely to cut FY27 growth projections

The analysts evaluated the decarbonisation readiness of a sample of ten steel producers — seven Indian and three global peers — assessing the connection between their stated emission reduction targets and their actions in terms of strategic planning, operational capabilities, and financial alignment.

The Indian companies assessed include JSW Steel, Tata Steel, Steel Authority of India Limited (SAIL), Jindal Steel, Rashtriya Ispat Nigam Limited (RINL), Jindal Stainless Limited, and Godawari Power and Ispat Limited (GPIL), while the global companies are ArcelorMittal, POSCO, and Nippon Steel.

MUST READ: Credit guarantee for MSMEs soon? Centre likely to approve relief package

“Companies have set targets, and technology planning is advancing among the leaders, but capital allocation has not moved. Meanwhile, emissions are heading in the wrong direction, and that problem is set to worsen as the sector grows unless technology substitution accelerates,” says Soni Tiwari, Energy Finance Analyst - South Asia at IEEFA.

A widening gap between Indian steel companies’ stated decarbonisation targets and their concrete actions to achieve them risks locking in emissions-intensive technologies for decades, slowing their progress to net zero, and undermining the sector’s long-term competitiveness.

India is the world’s second-largest steel producer, but while demand has plateaued or is declining among other major steel-producing regions, in India the sector is on a steep growth curve.

A blast furnace (BF) typically operates for 20–25 years, with each relining extending its lifespan by another 15–20 years. In India, around 43 million tonnes per annum (MTPA) of existing BF capacity is due for relining before 2030, which would allow these furnaces to continue operating for an additional 15–20 years.

Extending and expanding these technologies will lock in emissions for decades, undermining decarbonisation targets. This in turn will expose Indian companies to tightening international controls such as carbon border adjustments, green procurement mandates, and investor pressure for credible transition plans.

Overcoming these issues will require coordinated government action. The roughly Rs 2.25 lakh crore investments globally in steel decarbonisation to date have been overwhelmingly enabled by public capital, underscoring a basic reality.

Published on: Apr 28, 2026 2:47 PM IST