India’s Ministry of Steel has requested a budget allocation of 150 billion rupees ($1.74 billion) to provide incentives for steel producers to manufacture low-carbon steel, according to two government officials familiar with the matter.
Finance Minister Nirmala Sitharaman is set to unveil the federal budget for the 2025-26 fiscal year on February 1.
India has been working on a green steel policy aimed at decarbonising alloy production, as a push towards reducing greenhouse gas emissions under a 2070 net-zero target set by Prime Minister Narendra Modi.
The steel ministry plans to offer incentives to improve research and reduce carbon emissions while developing and increasing raw material efficiency, as well as encouraging banks to offer lower interest rates loans for renewable energy, reported sources.
“Once funds are allocated to the ministry, a proposal for the incentives to be offered to steel mills would be sent for cabinet approval,” the sources said.
Last month, the government classified steel with carbon dioxide emissions of less than 2.2 metric tons per ton of finished steel as ‘green.’
“The incentives would remain in place until 2030,” the sources added. India is also considering the use of green steel in government projects.