The Ministry of Environment, Forest and Climate Change (MoEFCC) has released a draft notification proposing greenhouse gas (GHG) emission intensity targets for India’s iron and steel sector, marking a significant step towards decarbonising one of the country’s most energy-intensive industries. The proposal has been issued under the Carbon Credit Trading Scheme (CCTS) and seeks to establish a market-driven framework for reducing industrial emissions while improving energy efficiency.
The draft framework proposes plant-specific emission intensity targets for integrated steel plants, electric arc furnace (EAF) units, and induction furnace-based steel producers. Eligible companies that reduce emissions below their assigned targets will earn carbon credit certificates, while those exceeding the prescribed limits will be required to purchase carbon credits or face penalties under the compliance mechanism. The initiative is designed to create financial incentives for adopting cleaner technologies and low-carbon manufacturing processes.
The iron and steel industry is among India’s largest industrial emitters and plays a crucial role in achieving the country’s climate commitments. The proposed norms are expected to encourage investments in energy-efficient equipment, greater use of renewable energy, waste heat recovery systems, increased scrap utilisation, and emerging technologies such as green hydrogen and carbon capture to lower production-related emissions.
The ministry has invited comments from stakeholders before finalising the notification. Once implemented, the emission targets are expected to complement India’s broader strategy of achieving net-zero emissions by 2070, while strengthening the competitiveness of the domestic steel industry in global markets that are increasingly adopting carbon-related trade measures such as the Carbon Border Adjustment Mechanism (CBAM).
Industry experts believe the proposed framework will accelerate the transition towards cleaner steel production by promoting technological innovation and creating a transparent carbon market. The move is also expected to support the long-term sustainability of India’s steel sector while balancing industrial growth with environmental responsibility and climate objectives.