India's Green Steel Initiative Could Slash Coal Import Costs

May 19, 2026

83 min

May 19, 2026 04:30

Green steel may save India $1 trillion in coal imports: Report

## Potential Savings and Export Boost

A recent report from the India Energy and Climate Center (IECC) at the University of California, Berkeley, suggests that India's transition to green steel production could save the country nearly $1 trillion in coking coal imports. This shift could also enhance India's competitiveness in global export markets.

## Current Steelmaking Practices

India's steel industry is at a crossroads. If the country continues to rely on traditional blast furnace methods, it could be locked into importing around six billion tonnes of coking coal over the next 40 years. This reliance poses risks related to currency fluctuations and price volatility.

## Green Steel Advantages

Green steel, produced using hydrogen instead of coking coal, offers a sustainable alternative. By 2030, the cost of green hydrogen in India could drop to $3 per kilogram, making green steel production economically viable. This method could become cost-competitive with conventional steel, especially when considering historical coal price increases and currency depreciation.

## International Trade Implications

India's carbon-intensive steel exports may face challenges due to international carbon-related trade barriers, such as the European Union's Carbon Border Adjustment Mechanism, which imposes costs based on carbon emissions.

## Strategic Recommendations

The report recommends creating a supportive framework for green steel projects, including long-term procurement contracts and reliable access to renewable energy. India's experience with scaling renewable energy could serve as a model for accelerating green steel adoption.

## Future Prospects

As the world's second-largest steel producer, India aims to reach 300 million tonnes of steel capacity by 2030-31. Transitioning to green steel could not only reduce dependence on imported coal but also strengthen India's position in downstream manufacturing sectors.

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