Tracking Technology Transition in the Indian Steel Sector

This report looks at the scope for transition for the steel sector – a critical but often under-scrutinised contributor to global emissions. It is the first in a set of company-level assessments evaluating the transition performance of India’s leading steel producers, designed to inform investment and policy decisions aligned with net zero and sustainable industrial growth.

We begin with India’s largest producer – JSW Steel – which is expanding capacity to capture the opportunity for growth in the Indian steel sector.

While steel production is vital for India’s development goals, limited access to raw materials, natural gas, and steel scrap makes it difficult to scale without deploying carbon-intensive technologies. This strategy poses a threat to company CO₂ targets and could impact future profitability.

Key insights from the JSW report include:

• Carbon lock-in risk from continued blast furnace expansion, including 56% of capex aligned to carbon-intensive projects.
• Potentially limited access to CCS, making it harder for CO₂ intensity reduction with blast furnaces beyond 2030.
• Exposure to EU carbon border tariffs (CBAM), with potential trade costs of up to 48-71% by 2034.
• A need for greater clarity on methane, which could influence technology decisions for optimal transition planning.
• Potential to close the ‘viability gap’ between blast furnaces and low-carbon alternatives sooner by considering a phased approach to green hydrogen.
• Higher exposure to the automotive sector, suggesting greater opportunity to benefit from green steel premiums.

JSW has demonstrated leadership among its peers by committing US$ 13 bn towards renewables and hydrogen-ready steel production methods. This puts the company in a better position to transition away from coal, but carbon lock-in from blast furnaces may slow the rate at which this can be done.