A 26 per cent green steel procurement mandate in government projects could unlock nearly 16 million tonnes per annum (MTPA) of demand by 2030, according to a study released by the Confederation of Indian Industry (CII).
The report suggests that introducing a structured Green Public Procurement (GPP) framework for steel beginning FY2028 would create assured demand for certified low-carbon steel. Given the significant volume of steel consumed in public infrastructure, construction, railways, defence, housing and other government-backed projects, even a partial shift toward green steel could substantially reshape market dynamics.
India’s total steel consumption in public procurement-linked sectors is estimated to be in the range of 60–65 MTPA. A 26 per cent mandate applied to this base could generate around 15–16 MTPA of demand for certified green steel by FY2030. If the threshold is raised to 37 per cent, the demand potential could increase to approximately 24 MTPA within the same timeframe.
Beyond demand creation, the study highlights the potential climate benefits. A structured green steel mandate could help reduce carbon emissions by up to 29–30 million tonnes of CO₂ by 2030, depending on the level of adoption and certification standards applied.
The report underscores that India’s steel sector, being one of the largest globally and a major contributor to industrial emissions, will need targeted policy support to transition toward low-carbon production pathways. Technologies such as renewable energy-based electric arc furnaces, green hydrogen-based direct reduced iron (DRI), increased scrap usage and carbon capture solutions are identified as key enablers of green steel production.
CII’s analysis indicates that a majority of domestic steel producers have the technical readiness or transition plans to supply certified green steel. However, the study notes that clear definitions, credible certification frameworks and mechanisms to manage the potential cost premium will be critical for successful implementation.
The proposed mandate is positioned as a demand-side policy intervention that can accelerate investment in cleaner production technologies while ensuring alignment between infrastructure growth and India’s long-term climate commitments.
