India accounts for 40% of global steel capacity in development, 57% of new coal-based projects
New Delhi: India has emerged as the world's largest developer of steel capacity, accounting for 40 per cent of global capacity under development and 57 per cent of all new coal-based basic oxygen furnace (BOF) steelmaking capacity, according to the May 2025 Pedal to the Metal report by Global Energy Monitor (GEM).
The report, based on the Global Iron and Steel Tracker, shows that India is currently responsible for 352 million tonnes per annum (mtpa) of developing steel capacity. In contrast, China, which led in past decades, accounts for 140 mtpa. Despite India's announced plans, only 8 per cent of its projects — around 28 mtpa — have moved into construction.
"India's steel industry remains the most carbon-intensive, emitting about 20–25% more CO₂ per tonne than China," the report said.
India's iron and steel production relies heavily on coal-based technologies. Of the country's 152 mtpa of ironmaking capacity, 74.6 per cent comes from blast furnace (BF) technology, while 23.1 per cent is based on direct reduced iron (DRI), mostly coal-fed. For steelmaking, 61 per cent of India's 135 mtpa capacity uses BOF, and 23 per cent uses electric arc furnace (EAF). The report notes significant induction furnace capacity also exists but is not fully captured in GEM's data.
India added 21 mtpa of BF capacity since 2020 without retiring any, while most of its DRI capacity is coal-based — 60 per cent uses coal as a reductant, 35 per cent uses methane, and 5 per cent uses coke oven gas. This is in contrast to the global average, where only 28 per cent of DRI capacity is coal-based, and 61 per cent uses methane.
"Feedstock for EAFs in India is made up of approximately 50% DRI, compared to 20% globally, indicating much higher demand for iron ore than scrap," the report said.
The report highlights that India has 142 mtpa of blast furnace capacity in development, alongside only 33 mtpa of DRI capacity. This indicates continued dependence on emissions-intensive routes. By comparison, 58 per cent of new global ironmaking capacity under construction still uses blast furnaces, while only 42 per cent uses DRI.
While India's Ministry of Steel has launched a Green Steel Taxonomy and released a decarbonisation roadmap, the report observes that the approach prioritises expanding capacity with decarbonisation applied later.
"India has a net-zero 2070 target and aims to reduce their national average emissions intensity of steel from 2.54 tCO₂/tcs to 2.2 tCO₂/tcs by 2030," the GEM report stated.
India's steel capacity expansion plans are also not fully aligned with execution. Since the National Steel Policy in 2017, 265 mtpa of capacity with announced dates has been added to planning pipelines, but only 32 mtpa (12%) has started operations. This is in contrast to China, which realised 79 per cent of its announced capacity in the same period.
The report also outlines challenges in the global transition to green steel, including limited access to high-grade iron ore and green hydrogen, delays in investment decisions, and increasing reliance on relining existing blast furnaces. In India and China alone, 259 blast furnace relinings were completed in the past five years, extending 372 mtpa of capacity.
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