According to a report released on Tuesday by the Confederation of Indian Industry (CII), requiring 26% of public projects to use certified green steel may liberate up to 16 million tonnes per year (mtpa) of demand from government-linked projects alone by 2029–30.
According to the industry readiness assessment, which was created by CII’s Green Business Center with assistance from Climate Catalyst, a higher 37% mandate could increase demand for up to 24 million tons of green steel and help prevent up to 29.7 million tons of carbon dioxide emissions by 2029–2030, which is the same as removing 6–9 million cars from the road annually.
The nation spends ₹45–50 trillion on public procurement each year, and in 2023–2024, government-related projects used over 31.6 million tons of steel, producing almost 70 million tons of CO2.
According to the analysis, switching even a small percentage of this demand to low-carbon steel might result in significant emissions savings with just a minor impact on overall project costs, given that the Union Budget 2026–2027 is increasing capital investment to ₹12.2 trillion.
The study discovered that, subject to a notified mandate and an open system to recoup incremental costs, 93% of the steel makers surveyed—26 out of 28 businesses totaling 88 mtpa of crude steel capacity—are prepared to deliver certified green steel on a large scale. A green premium, GST breaks, or carbon credit offsets are examples of suggested policies.
On the demand side, 12 significant public procurers said they would be willing to implement a green steel mandate if four enablers were in place: a national mandate that was announced and had clear thresholds; ready-to-use tender clauses and templates for monitoring, reporting, and verification (MRV); brief training for procurement teams; and limited, time-bound fiscal support, such as a predefined green margin in the schedule of rates (SoR), GST relief, or carbon offsets for the first three years.
According to the paper, public projects worth more than ₹1 crore should begin with an activation floor of 26% commencing in 2027–2028. After 2029–2030, there should be a path to increase this to 37%. Both scenarios predict a steady increase in demand for green steel in tandem with India’s growing infrastructure pipeline.
According to the analysis, a 37% threshold may reduce 29.7 million tons of CO2 emissions by 2029–2030, while a 26% mandate could prevent up to 20.9 million tons. The adoption of green steel will only result in a 0.2% to 1.2% increase in overall project costs, according to case studies of Indian Railways projects, metro rail systems, and Pradhan Mantri Awas Yojana-Urban 2.0.
According to CII executive director K.S. Venkatagiri, green public procurement may be able to accelerate the transformation of the steel industry. “Government demand may assist bridge the cost gap between green and conventional products and create stronger signals for innovation and investment by encouraging the use of certified low-emission steel in public infrastructure, housing, and transportation projects,” he stated.
A clear mandate might advance the sector more quickly than subsidies alone, according to Sakshi Balani, director (India) and director (policy) at Climate Catalyst. According to her, “GPP is the missing demand signal that can release large-scale investment and bring the industry towards a 16-24 mtpa green steel market by 2029-30.”
According to the study, some integrated producers are anticipated to start entering three-star categories starting in 2026–2027, indicating a two-stage acceleration in the availability of green steel throughout the decade, based on draft Carbon Credit Trading Scheme (CCTS) trajectories and Green Steel Taxonomy thresholds.
It also highlights structural limitations, such as a 20–30 mtpa scrap shortfall by 2030, insufficient upstream emissions disclosure from suppliers of coke and iron ore, disjointed state and public sector procurement procedures, and a lack of standardized MRV forms.
The paper suggests establishing an interministerial green public procurement steel task group under the steel ministry to supervise implementation and coordination across industrial policy, finance, and procurement in order to close these gaps. Additionally, in order to provide credible product-level accounting under the Green Steel Taxonomy, it mandates mandatory upstream emissions disclosure across iron ore, pellets, scrap, and energy inputs.
The study contended that a phased implementation, starting with a mandate announcement in 2026–2027, SoR integration, standardized tender templates, and pilot projects, could allow public procurement to absorb up to 24mtpa of certified green steel by 2029–2030, given the institutional mechanisms already in place, such as the General Financial Rules 2017 and the CCTS.
The study comes to the conclusion that, in addition to future-proofing public infrastructure and boosting global competitiveness, green public procurement may prove to be the most effective instrument for converting India’s steel sector’s climate goals into quantifiable action this decade.
