India’s ambitious plans to double its steel production by 2030—largely relying on coal-based technologies—pose a significant threat to global efforts to decarbonize one of the most carbon-intensive industries, according to a new report published Tuesday by the Global Energy Monitor (GEM).
The steel and iron sector currently accounts for roughly 11 percent of global carbon dioxide (CO₂) emissions, making it a critical focus for climate action. While much of the world is shifting toward lower-emissions technologies like electric arc furnaces (EAFs), which can operate using recycled scrap and require significantly less carbon input, India is charting a different path.
The Net-Zero Gap
The International Energy Agency (IEA) has set a target for 37 percent of global steel production to be met via EAFs by 2030 to keep the industry aligned with a 2050 net-zero emissions trajectory. GEM’s report estimates the world is currently on track for just 36 percent, with India’s expansion plans representing a key obstacle.
“That one percent gap may appear small, but it translates into tens of millions of tonnes of CO₂ emissions,” warned Astrid Grigsby-Schulte, an analyst at GEM. “The only realistic way to close it is with a change of plans from India.”
Why India Matters
India is projected to become the second-largest steel producer globally, following China. While China’s production has plateaued, India’s National Steel Policy of 2017 set the stage for rapid growth—primarily through blast furnace-basic oxygen furnace (BF-BOF) routes, which are among the most carbon-intensive production methods.
Notably, India’s steel sector is already the most carbon-intensive in the world, and its current expansion trajectory doubles down on fossil fuel dependency. The country’s net-zero commitment for 2070, two decades behind many industrialized nations, further complicates global decarbonization timelines.
Room for Course Correction
Despite the bleak outlook, the GEM report points to a potential silver lining. Since the 2017 policy was adopted, only 12 percent of the planned new steel capacity has materialized—compared to 80 percent in China. This slow implementation provides an opportunity to pivot toward cleaner, scalable alternatives such as EAFs and emerging technologies like green hydrogen-based direct reduced iron (DRI).
“This lag in execution means there is still time for India to shift toward lower-emissions pathways,” Grigsby-Schulte noted. “What happens between now and 2030 is critical—not just for emissions avoided now, but for building the infrastructure for a decarbonized sector by mid-century.”
A Global Challenge
Steel demand continues to grow worldwide, especially in developing economies. As a result, the iron and steel industry is expected to be among the last industrial sectors to fully phase out coal, even under the IEA’s net-zero roadmap.
The IEA has called for a “significant acceleration” of innovation in low-carbon steelmaking, citing the slow progress in scaling new technologies and the urgency of cutting emissions now.