A new report warns that India’s steel sector risks cementing high-emission assets unless capital, policy support, and technological upgrades accelerate, threatening to hinder the nation’s climate ambitions amidst rapid growth and global pressure for greener supply chains.
India’s steel industry risks spending the next decade building in yesterday’s technology unless its climate ambitions are matched by capital, policy support and faster operational change, according to a new report from the Institute for Energy Economics and Financial Analysis.
In its latest assessment of decarbonisation readiness, IEEFA argues that the sector has largely embraced Paris-aligned net-zero goals on paper, but has not yet built the financial, technical and strategic foundations needed to deliver them. That gap, the report says, could leave producers locked into high-emissions assets for years to come just as global markets harden around cleaner supply chains.
The warning matters because India’s steel sector is expanding at a time when output in several other major producing regions has plateaued or begun to fall. Dr Saurabh Trivedi, IEEFA’s lead specialist for sustainable finance and carbon markets in South Asia, said the industry is at a turning point, with decisions taken over the next few years likely to shape emissions trends through mid-century. In other words, the country’s growth in steel demand is colliding with a far tighter global climate constraint than older producers ever faced.
IEEFA assessed seven Indian steelmakers alongside three international peers, including ArcelorMittal, POSCO and Nippon Steel. The Indian companies in the study were JSW Steel, Tata Steel, Steel Authority of India, Jindal Steel and Power, Rashtriya Ispat Nigam, Jindal Stainless and Godawari Power and Ispat.
Five of the seven Indian firms have set net-zero targets for 2050, but the report says their progress on implementation remains weak when measured against strategy, plant operations and financing plans. By contrast, the global peers in the sample have made more visible progress in reducing emissions intensity.
IEEFA says emissions intensity at most of the Indian companies has risen over the past three years, which points to a disconnect between long-term pledges and near-term industrial reality. Soni Tiwari, an energy finance analyst at IEEFA, said companies have set targets and some leaders are moving on technology planning, but capital has not followed. The result, she said, is that emissions are moving in the wrong direction even before the sector’s growth fully accelerates.
A central concern is India’s ageing blast furnace fleet. The report says about 43 million tonnes a year of blast furnace capacity is due for relining before 2030, creating a choice point: either extend the life of carbon-intensive assets for another 15 to 20 years, or use the replacement cycle to shift towards lower-emission production routes.
That distinction is critical for industrial decarbonisation professionals because relining is not just maintenance; it is a long-term capital decision. Once new high-carbon infrastructure is installed, the economics and engineering of early retirement become far more difficult. IEEFA warns that this could leave Indian producers exposed to carbon border measures, stricter green procurement rules and rising scrutiny from lenders and investors.
The report also underlines how unusual India’s financing challenge is. IEEFA says roughly $24bn has already been invested globally in steel decarbonisation, most of it backed by governments. For India, it argues, the next stage will require public mechanisms such as credit guarantees, contracts for difference and green public procurement to make low-carbon projects bankable at scale.
IEEFA has separately argued that carbon capture, utilisation and storage is unlikely to provide a durable answer for Indian steel, and that green hydrogen-based direct reduced iron and higher scrap recycling are more credible long-term pathways. It has also said that a legal definition of green steel, tighter renewable purchase enforcement and a meaningful carbon price signal would help steer investment towards cleaner routes.
Tanya Rana, an energy analyst at IEEFA, said the window for action is narrowing and that the sector’s trajectory will ultimately be determined by the assets companies build, not the targets they announce. For India’s steelmakers, the message is increasingly clear: ambition is no longer enough.
- https://knnindia.co.in/news/newsdetails/sectors/others/gap-between-climate-targets-action-may-delay-steel-sectors-net-zero-transition-ieefa-report – Please view link – unable to able to access data
- https://ieefa.org/resources/decarbonisation-readiness-indias-steel-sector – The Institute for Energy Economics and Financial Analysis (IEEFA) released a report highlighting a significant gap between India’s steel industry’s climate commitments and its actual progress in building the necessary infrastructure for decarbonisation. Despite adopting net-zero targets aligned with the Paris Agreement, the sector’s emissions intensity has increased over the past three years, unlike global peers that have achieved reductions. The report emphasises the need for substantial public funding and coordinated government intervention to accelerate the transition to low-carbon technologies and prevent carbon lock-in risks.
- https://ieefa.org/articles/indian-steelmakers-must-match-ambition-action-decarbonisation – IEEFA’s article underscores the widening gap between India’s steel companies’ climate commitments and their actual progress in decarbonisation efforts. While five out of seven major Indian steel producers have set net-zero targets for 2050, their operational readiness, technology deployment, and financial alignment remain limited. The article warns that without substantial public support and coordinated government intervention, the sector risks locking in emissions-intensive technologies for decades, delaying its transition to net-zero and undermining long-term competitiveness.
- https://manufacturing.economictimes.indiatimes.com/news/industry/indias-steel-sector-lags-on-decarbonisation-despite-paris-aligned-goals-ieefa/130577249 – An Economic Times article reports on IEEFA’s findings that India’s steel sector, despite aligning its long-term climate ambitions with the Paris Agreement, lags in decarbonisation implementation. The report highlights that while five of seven major Indian steel companies have adopted net-zero targets for 2050, most have shown weak advancement in operational readiness, technology deployment, and financial alignment, raising concerns about carbon lock-in risks and the need for substantial public support to accelerate the transition.
- https://www.pv-magazine-india.com/2026/04/28/indian-steelmakers-must-match-ambition-with-action-on-decarbonisation-ieefa/ – PV Magazine India discusses IEEFA’s report highlighting the gap between India’s steel industry’s climate commitments and its actual progress in decarbonisation. The report warns that without substantial public support and coordinated government intervention, the sector risks locking in emissions-intensive technologies for decades, delaying its transition to net-zero and undermining long-term competitiveness. The article emphasises the need for targeted public funding and policy support to accelerate the shift to low-carbon technologies.
- https://ieefa.org/resources/carbon-capture-risks-leading-indian-steel-down-technological-dead-end – IEEFA’s report examines the risks associated with carbon capture, utilisation, and storage (CCUS) technologies in India’s steel sector. It highlights that CCUS has demonstrated no capacity to adequately reduce steelmaking emissions and could lead the sector down a high-emissions pathway, increasing energy security risks. The report suggests that green hydrogen-based direct reduced iron (DRI) steelmaking and increased scrap steel recycling are more viable solutions for decarbonising India’s steel sector.
- https://ieefa.org/resources/steel-decarbonisation-india – IEEFA’s report on steel decarbonisation in India discusses the challenges and potential pathways for reducing emissions in the sector. It highlights that green hydrogen is expected to become the primary route of steelmaking in India by 2050, but the cost of green hydrogen needs to reduce, and there needs to be a price penalty on carbon emissions for Indian steelmakers to switch to hydrogen-based steelmaking. The report also suggests that a legal definition for green steel and strict enforcement of renewable purchase obligations can guide the industry in making the right investments for decarbonisation.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The article references a report published by IEEFA on April 28, 2026, which is recent. However, the article was published on April 30, 2026, indicating a two-day gap. The KNN India website, where the article is hosted, appears to be a niche publication with limited reach. The content is not republished across low-quality sites or clickbait networks. The narrative is based on a press release from IEEFA, which typically warrants a high freshness score. No discrepancies in figures, dates, or quotes were found. The article includes updated data and does not recycle older material. Overall, the freshness score is high, but the reliance on a niche publication and the two-day gap between the report’s release and the article’s publication slightly reduce the score.
Quotes check
Score:
7
Notes:
The article includes direct quotes from Dr. Saurabh Trivedi, Lead Specialist at IEEFA, and Soni Tiwari, an energy finance analyst at IEEFA. These quotes are consistent with those found in the original IEEFA report and related articles. No identical quotes appear in earlier material, and the wording is consistent across sources. However, the quotes cannot be independently verified beyond the IEEFA publications. Given the reliance on a single source for verification, the score is moderate.
Source reliability
Score:
6
Notes:
The article originates from KNN India, a niche publication with limited reach. The lead source is a press release from IEEFA, a reputable organisation. However, the article appears to be summarising or rewriting content from the IEEFA report, which is a paywalled source. This raises concerns about the independence of the verification sources. The reliance on a single, niche publication and the potential lack of independent verification sources reduce the reliability score.
Plausibility check
Score:
7
Notes:
The claims made in the article align with industry trends and are consistent with information from other reputable sources. The article provides specific details, such as the names of Indian steel companies assessed and the specific findings of the IEEFA report. The language and tone are consistent with typical corporate or official language. However, the reliance on a single, niche publication and the lack of independent verification sources raise some concerns about the overall plausibility.
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article presents information from a recent IEEFA report, but it relies heavily on a single, niche publication and a paywalled source for verification. The lack of independent verification sources and the potential recycling of content from a paywalled source raise significant concerns about the article’s credibility. Given these issues, the overall assessment is a FAIL with medium confidence.
