India’s steel and cement sectors are experiencing rapid growth, fueled by government investments in infrastructure. However, experts caution that New Delhi lacks a comprehensive plan to curb carbon dioxide emissions in these industries, despite the country’s net zero target by 2070. Saurabh Kumar, former civil servant and current head of the Global Energy Alliance for People and Planet in India, funded by Jeff Bezos’s Earth Fund and the Rockefeller Foundation, asserts the necessity of a regulatory framework to push these sectors towards decarbonization. Steel and cement production are considered “hard to abate” sectors due to the difficulties in reducing their fossil fuel energy usage and CO₂ emissions. As India’s cities expand and energy consumption rises with industrialization and consumption, the country faces international pressure to limit emissions. Although India is already a significant energy consumer due to its large population of 1.4 billion, its per capita emissions remain below the global average. Yash Kashyap, a senior analyst at the Climate Policy Initiative, emphasizes the need for India to acknowledge and enhance its transition to clean energy, especially in the steel and cement industries. These sectors contribute 15-20% of India’s emissions and are heavily reliant on fossil fuels. While India’s cement industry fares better in emissions compared to China due to energy efficiency initiatives, experts believe the country must eventually replace coal-generated energy with cleaner alternatives, implement less emissions-intensive processes, and adopt carbon capture technologies. Mandatory carbon trading will also play a crucial role in driving these changes. A market-based scheme by the Bureau of Energy Efficiency has successfully incentivized companies to reduce their energy consumption, and India’s recent amendment to the Energy Conservation Act provides the option to introduce compulsory carbon trading. However, policymakers have been reluctant to embrace such measures, favoring instead a voluntary carbon market. Retrofitting carbon capture technology in the steel industry’s coal-fired blast furnaces could prevent stranded assets. While promising, solar-powered hydrogen production and carbon capture technologies are currently expensive and unproven at scale. Many governments, like the US under President Joe Biden, offer grants and subsidies to incentivize industries to adopt clean technologies. Indian industrialists express dissatisfaction over the lack of similar support and criticize the government for not providing clear deadlines for emissions targets. The EU’s upcoming carbon border adjustment mechanism, an import levy to discourage emissions-intensive production shifts, may force India’s hand as its steel exports could face taxation without meeting green standards.
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