There is a strong case for the iron and steel sector to lead the path to decarbonization of industries in India. By focusing on the iron and steel sector, the highest emitting industrial sector in India, this paper “Discussion Paper: Financing Industrial Decarbonization” by Climate Policy Initiative has highlighted the complexities and challenges of decarbonizing industries and also discussed a conceptual framework consisting of industry- and financial sector-level measures to enable financing for low-carbon industrial production.
So far, there has been no investment in green steel production in India, and given the nascency of deep-decarbonization technologies, it is expected that pre-2030, emissions abatement in iron and steel will need to come through best-available technologies, which have a negative or near-zero marginal cost of abatement.
Post-2030, emerging and breakthrough technologies will be needed to transition the low-carbon emissions asset base, aligned with net-zero emissions pathways. Significant finance is needed for low-carbon technologies at various stages of development to prevent carbon lock-in from the predominantly fossil fuel-based steel capacity expected to be added in India over the next 15 years.
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