India Gears Up for Green Steel Revolution with Projected Demand of 179 Million Tonnes by 2050 – EY
In Short : India’s demand for green steel is projected to surge to 179 million tonnes by 2050, driven by growth in infrastructure, construction, and automotive sectors. An EY-WWF-CII report highlights initial demand at 4.49 MT by 2030, rising to 73.44 MT by 2040. Falling costs, global carbon regulations, and technological advances will accelerate the shift to low-emission steel.
In Detail : India’s demand for green steel is expected to rise significantly, reaching 179 million tonnes by 2050, according to a report by EY Parthenon in collaboration with WWF-India and CII-Green Business Centre. The surge will be driven by rapid growth in sectors like infrastructure, construction, and automotive that are under increasing pressure to adopt low-carbon materials.
The report estimates that green steel demand will start at a modest 4.49 million tonnes by 2030, increase to 73.44 million tonnes by 2040, and then accelerate sharply to 179 million tonnes by 2050. This projected rise reflects the broader decarbonization goals India is pursuing under various climate commitments.
Currently, India consumes around 136 million tonnes of steel annually, with nearly 78% of that consumed by the construction and infrastructure sectors. By 2050, the total demand for steel is anticipated to grow to 390 million tonnes, offering a massive opportunity for green steel adoption.
Green steel is produced using low-carbon technologies such as hydrogen-based direct reduced iron (DRI) and electric arc furnaces powered by renewable energy. These methods can reduce carbon emissions by up to 97% compared to traditional blast furnace routes.
However, green steel currently comes at a cost premium. The report notes an average cost increase of 3.7% for the construction sector, 4.1% for automotive, and 5.2% for infrastructure. Encouragingly, this green premium is expected to fall below 1% between 2035 and 2040 due to economies of scale and carbon pricing.
Global regulatory developments are also pushing India toward cleaner steel. The European Union’s Carbon Border Adjustment Mechanism (CBAM) could impose import duties on carbon-intensive steel products, potentially costing Indian exporters around ₹19,277 crore by 2030 unless they shift to greener alternatives.
At present, India’s steel sector emits roughly 2.5 tonnes of CO₂ per tonne of steel produced, far exceeding the EU benchmark of 1.28 tonnes. The country aims to reduce this to about 1.21 tonnes by 2030 through cleaner technologies and improved efficiency.
Despite the growing opportunity, the transition faces challenges such as high capital costs, limited scrap availability, and a heavy reliance on coal-based production methods. The report stresses the need for supportive policy mechanisms like carbon pricing, green procurement mandates, and financial incentives.
With the right policy support and industry action, India could position itself as a global leader in green steel manufacturing, while meeting its domestic infrastructure goals and global climate obligations.
