India's Steel Expansion Threatens Net-Zero Emissions Target, Warns GEM

India’s aggressive push to expand its coal-powered steelmaking capacity could undermine the commitment to achieving net-zero carbon emissions by 2070, Global Energy Monitor (GEM) warned in a report released on Tuesday.

Prime Minister Narendra Modi's 2070 net-zero goal lags significantly behind the timeline recommended by scientists to avert severe climate consequences. The GEM report highlights that India’s focus on ramping up steel production to meet surging demand, fueled by rapid economic growth and infrastructure spending, is likely to exacerbate greenhouse gas emissions.

GEM's findings reveal that India’s continued investments in coal-based steel production, coupled with the operation of relatively new, emissions-intensive blast furnaces, jeopardize its climate goals. The report estimates this strategy could result in an additional 680 million metric tons of carbon dioxide-equivalent emissions, while saddling the country with approximately $187 billion in stranded assets.

India, the world’s second-largest crude steel producer, currently plans to expand its steel production capacity from 180 million metric tons to 300 million metric tons by 2030. According to GEM, the nation has the largest pipeline of steelmaking capacity under development globally, with announced and under-construction projects amounting to 258 million metric tons annually.

However, India’s reliance on coal for its steel industry is particularly troubling. GEM reports that 85% of the energy in India’s steel sector comes from coal, and 69% of steel capacity under development relies on coal-based blast furnaces. By contrast, only 13% of capacity under development utilizes electric arc furnaces, a significantly less carbon-intensive technology.

GEM also pointed out the inefficiency of India’s steel production process. Indian steelmakers generate 2.55 metric tons of carbon dioxide per ton of crude steel produced, far exceeding the global average of 1.85 tons per ton. This stark inefficiency raises further concerns about India’s ability to align its industrial practices with global climate goals.

India’s coal-driven approach to steel production not only risks derailing its domestic climate ambitions but also undermines international efforts to curb carbon emissions. The GEM report highlights the urgent need for India to adopt greener technologies and rethink its energy-intensive industrial strategies to align with global sustainability standards.