India’s Ministry of Steel has sought a $1.7 billion provision to be made in the national budget for 2025-26 to be presented before parliament next month, to provide incentives for the decarbonisation of domestic steel mills, government sources said on Monday, January 20.
Though the ministry has not officially made any statement, sources said that it has contacted its counterparts in the finance ministry seeking provision of the fund to be made in the national budget to be presented by the minister of finance at the end of February.
The steel ministry plans to use the funds to offer incentives that encourage emissions reductions, improve research and development, increase raw material efficiency, and incentivise banks to offer lower interest rates on renewable energy loans.
Once the funds are allocated, the ministry will submit the proposal to India’s cabinet of ministers. In December last year, the Indian government defined ‘green steel’ as steel produced with emissions lower than 2.2 metric tons of CO2 per tonne of finished steel. India’s steel production generates 2.55 mt of carbon dioxide per metric ton of crude steel, 38 percent higher than the global average of 1.85 mt.