India’s plan to double steel production by 2030 could undermine its climate commitments and hinder global efforts to cut emissions from the steel sector, according to a report by Global Energy Monitor (GEM).
The report highlights that, while global decarbonization of steelmaking is gaining momentum, India, the world’s second-largest steel producer, remains heavily reliant on coal-based technologies. Steel production already accounts for up to 12pct of the country’s greenhouse gas emissions, a figure that could double within five years if current expansion plans proceed unchecked.
India aims to reach net-zero emissions by 2070. However, its coal-heavy approach contrasts with the International Energy Agency’s target for 37pct of global steel capacity to switch to low-emission electric arc furnaces by 2030. GEM projects the world will fall short at 36pct, with India’s trajectory a key reason for the gap.
India plans to boost steelmaking capacity from 200 mln to over 330 mln tons annually by 2030. Though proposed capacity rose sharply, from 258 mln tons in 2024 to 352 mln tons in 2025, only 28 mln tons are under construction, just 8pct of the total, suggesting a lag between announcements and actual progress.
With China’s steel output plateauing and set to decline after 2025, India now accounts for over 40pct of global steel capacity under development and 57pct of new coal-based capacity. India’s steel production remains the most carbon-intensive globally, emitting 20-25pct more CO2 per ton than China.
India’s dependence on coal stems from abundant cheap domestic coal, a relatively young fleet of blast furnaces with decades of life remaining, limited access to natural gas, and an underdeveloped scrap recycling system. High-quality iron ore is also scarce. Beyond climate risks, India’s coal-based steel growth could face economic repercussions. With the EU set to implement carbon border taxes in 2026, even India’s modest steel exports may come under pressure.