Carbon Capture Emerges as Low-Cost Path to Cut Steel Emissions

India’s steel industry may be on the brink of a major shift as carbon capture emerges as a low-cost way to cut emissions from one of the country’s most carbon-intensive sectors.

A new joint study by Climate Policy Initiative and Dastur Energy finds that capturing and reusing carbon dioxide released during steelmaking could be cheaper than other green steel solutions, giving producers a practical path to lower emissions without massive disruption.

The study notes that India’s steel plants, largely dependent on coal-based blast furnace processes, emit around 370 million tonnes of CO2 annually, or roughly 2.2–2.5 tonnes per tonne of steel. CCUS — carbon capture, utilization and storage — offers a way to trap that CO2 and either reuse it or store it, avoiding much of the output that would otherwise enter the atmosphere.

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Industry leaders say the economics make sense. JSW Group’s Pankaj Satija called CCUS “an important decarbonisation lever in the steel industry” and noted the company is exploring practical applications and even CO2 transport and storage hubs. While production costs would rise by about USD 72–80 per tonne of steel with CCUS, that is still lower than the costs linked to hydrogen-based or natural gas alternatives.

The total investment needed for full adoption of carbon capture technology in India’s integrated steel mills could reach USD 12–14 billion over the next 25 years. Early demonstration projects alone will require around USD 200 million in the first five years.

The government is also pushing cleaner production with initiatives like the Green Steel Taxonomy and the National Mission on Green Steel, underscoring the strategic role carbon capture could play in India’s industrial decarbonization strategy.