India’s Green Steel Demand to Hit 4.5 Million Tons by 2030

Green Steel Demand in India Set for Rapid Growth

India’s demand for green steel will reach 4.49 million tons by 2030, according to a report from Ernst & Young Parthenon, cited by The Economic Times. Interest in low-carbon steel is rising sharply across infrastructure, construction, and automotive manufacturing. By FY 2039–2040, the market could grow to 73.44 million tons, highlighting India’s key role in global steel decarbonization.

This growth supports India’s broader industrial decarbonization goals. Green hydrogen technology will play a central role as the main driver for low-emission steel production. EY-Parthenon stresses that early green steel adoption, despite its current premium, will provide long-term benefits. Carbon pricing will rise, and hydrogen costs will fall, improving competitiveness.

Kapil Bansal, EY Parthenon Partner and lead author, states that the initial 3.7–5.2% increase in production costs remains manageable. He encourages downstream sectors to invest early and collaborate with certified green steel suppliers to meet sustainability targets.

Green Hydrogen to Power India’s Green Steel Ambitions

Direct reduction using green hydrogen offers the most scalable and cost-effective path for India. Falling green hydrogen prices over the next decade will make green steel more competitive. This shift will narrow the cost gap between traditional and low-emission steelmaking.

India is preparing for this transition through strong regulatory support. So far, 39 producers have applied for green steel certification, showing industry momentum. Certification will boost transparency and promote adoption in export markets like Europe and East Asia, where carbon border taxes are growing.

The report advises companies to start integrating green steel into procurement well before net-zero deadlines. Long-term contracts, co-development with green tech providers, and public-private partnerships will be key to building a robust, low-carbon steel supply chain in India.

SuperMetalPrice Commentary:

India faces a critical decade for green steel adoption. Green hydrogen is approaching cost parity, while global carbon pricing tightens. Early adopters will gain market share and reputational benefits. Indian infrastructure and EV makers sourcing green steel now may secure preferential export opportunities later. Managing the current cost premium requires strategic investments, government incentives, and expanded green hydrogen infrastructure. If done well, India can lead global sustainable steel production by 2040.