Context
India is the world’s second largest producer of steel. The sector accounts for 13% of the country’s coal consumption and emits 250 MtCO2e (about 10% of total emissions). There is a strong demand for steel within India due to the growth in construction and infrastructure sectors and emissions are projected to increase to 800 MtCO2e by 2050 under a business-as-usual scenario.
The government of India is formulating several green industrial policies while also working on a roadmap for green steel production. However, these initial steps must now be translated into action by addressing some of the key barriers to energy transition.
Goals and approach to transformational change
In response to the increasing steel demand from the construction and infrastructure sectors, the “Catalysing the Decarbonisation of Indian Steel” (“India – Steel”) project aims to catalyse the decarbonisation of Indian steel production by demonstrating the technical and commercial viability of energy-efficient and best available low-carbon technologies (BAT).
The project will focus on creating an enabling environment for green steel by introducing regulatory, financial, and educational measures to integrate renewable energy and BAT technologies.
Components and support mechanisms
The Financial Cooperation (FC) component will support the introduction of renewable energy and BAT technologies through concessional loans and grants.
The Technical Cooperation (TC) component will develop an enabling policy and regulatory environment for accelerating renewable energy integration, facilitate BAT awareness and adoption, and build stakeholder capacity and synergies with government and corporate momentum to drive the decarbonisation of the steel sector towards a net-zero pathway.
Long-term impact
The project will directly reduce 11.6 MtCO2e during the span of an additional ten years after project implementation and more than 68.89 MtCO2e over the lifetime of the supported technologies for both direct and indirect mitigation.
