Gap Between Climate Targets & Action May Delay Steel Sector’s Net Zero Transition: IEEFA Report

ENA Sectors 2026-04-30 17:01:39 New Delhi, Apr 30 (KNN) A report by the Institute for Energy Economics and Financial Analysis (IEEFA) warns that a widening gap between climate targets and on-ground action in Indias steel sector could lock in emissions-intensive technologies for decades, delaying its transition to net zero and undermining long-term competitiveness. The report, Decarbonisation readiness in Indias steel sector, noted that while the industry has adopted climate targets aligned with the Paris Agreement, this ambition is not matched by adequate progress in developing the necessary operational, technological and financial infrastructure. Dr. Saurabh Trivedi, Lead Specialist, Sustainable Finance and Carbon Markets - South Asia at IEEFA, said, Indias steel industry stands at a crossroads. India is the worlds second-largest steel producer, but while demand has plateaued or is declining among other major steel-producing regions, in India the sector is on a steep growth curve. Therefore, the choices Indian companies make in the next few years will have profound implications for global steel sector emissions trajectories through mid-century, Dr. Trivedi added. Assessment of Companies The analysts assessed the decarbonisation readiness of ten steel producers—seven Indian and three global—by examining how well their emission reduction targets align with actions on strategy, operations and financial planning. The Indian firms evaluated include JSW Steel, Tata Steel, Steel Authority of India Limited (SAIL), Jindal Steel and Power, Rashtriya Ispat Nigam Limited (RINL), Jindal Stainless Limited, and Godawari Power and Ispat Limited (GPIL), while the global companies include ArcelorMittal, POSCO, and Nippon Steel, the report noted. Findings show that five of the seven Indian firms have set net-zero targets for 2050, but scored lower on execution metrics such as strategy, operations and financial alignment. Emissions intensity for most Indian companies has also increased over the past three years, unlike global peers that have achieved reductions. Soni Tiwari, Energy Finance Analyst - South Asia at IEEFA, said, Companies have set targets, and technology planning is advancing among the leaders, but capital allocation has not moved. Meanwhile, emissions are heading in the wrong direction, and that problem is set to worsen as the sector grows unless technology substitution accelerates. Risk of Carbon Lock-In The report highlights that ageing blast furnace (BF) infrastructure poses a major challenge. Around 43 million tonnes per annum of BF capacity in India is due for relining before 2030, which could extend their life by another 15 20 years. This risks locking in high emissions and undermining decarbonisation goals. Such delays may expose Indian steelmakers to stricter global measures, including carbon border taxes, green procurement norms and rising investor scrutiny. Need for Policy Support The report emphasises that large-scale public funding is essential to drive the transition. Globally, around USD 24 billion (Rs 2.25 lakh crore) has already been invested in steel decarbonisation, largely supported by governments. For India, targeted measures such as credit guarantees, contracts for difference, and green public procurement could help attract private investment and accelerate the shift to low-carbon technologies. Narrowing Window for Action The window for action is narrowing. The steel sectors transition will ultimately be determined not by the targets companies announce, but by the investments they make and the assets they build. On that measure, the sector in India has considerable ground to cover, said Tanya Rana, Energy Analyst - South Asia at IEEFA. (KNN Bureau) 45984 https://knnindia.co.in/news/newsdetails/sectors/gap-between-climate-targets-action-may-delay-steel-sectors-net-zero-transition-ieefa-report 2026-04-30 17:01:39 knnindia.co.in Gap Between Climate Targets & Action May Delay Steel Sector’s Net Zero Transition: IEEFA Report