BENGALURU, India — Smaller steel companies that account for nearly 40% of India’s crude steel production could reduce their electricity costs by as much as 34% while significantly cutting carbon emissions by switching to renewable power, according to a new industry and environmental report.
The report, titled Powering India’s Secondary Steel Transition, estimates that renewable electricity could save individual small steelmaking units about 22 million to 24 million Indian rupees annually, equivalent to roughly $250,000 to $275,000. Electricity can account for up to 40% of operating expenses for these companies, making energy costs a major factor in their profitability.
The study was produced by a consortium that includes the Confederation of Indian Industry, WWF-India, Climate Catalyst and research organization JMK Research. Its authors said shifting smaller steel producers toward renewable electricity could provide both an economic and environmental benefit as the industry faces rising energy costs and growing pressure to reduce emissions.
The report recommends that small steelmakers consider jointly investing in renewable energy projects rather than requiring individual companies to finance their own facilities. Under a cluster-based model, several manufacturers could combine their electricity demand and invest in a shared renewable power project, reducing the financial burden on individual companies while creating projects large enough to be commercially viable.
JMK Research analyst Prabhakar, one of the report’s authors, said aggregating electricity demand through industrial associations could make renewable projects more attractive to financiers and allow facilities to be sized according to the needs of participating manufacturers.
Despite India’s rapid expansion of renewable energy, adoption among smaller and medium-sized steel producers remains limited. The report estimates that only about 11% of smaller steelmakers currently use renewable power, compared with about 22% for India’s overall electricity mix.
India’s Ministry of New and Renewable Energy reported that the country had about 288.6 gigawatts of installed renewable energy capacity as of June 30, 2026, including more than 162 GW of solar power and 57.4 GW of wind power. Total non-fossil capacity, including large hydropower and nuclear power, stood at about 297.4 GW.
The expansion is part of India’s broader effort to increase the role of low-carbon energy in its power system. The Ministry of New and Renewable Energy says renewable power generation has increased substantially over the past decade, while solar capacity has grown from 2.82 GW in 2014 to more than 162 GW by June 2026.
For India’s steel industry, the transition carries significance beyond electricity costs. The steel sector accounts for roughly 10% to 12% of the country’s carbon emissions, according to India’s Ministry of Steel, making decarbonization of the industry an important component of the country’s long-term climate strategy.
India has set a goal of achieving net-zero emissions by 2070. The government has also introduced a Green Steel Taxonomy intended to establish a framework for identifying and promoting lower-carbon steel production. The Ministry of Steel released the taxonomy in December 2024 as part of its broader strategy to support the sector’s transition toward lower emissions.
The pressure on steelmakers is also coming from international markets. The European Union’s Carbon Border Adjustment Mechanism, which began applying its definitive regime in 2026, places a carbon-related cost on imports of certain emissions-intensive products, including steel. Lowering the carbon intensity of Indian steel could therefore become increasingly important for companies seeking to compete in overseas markets.
India’s steel producers are already facing a more difficult export environment. Reuters reported in July that Indian steelmakers were shifting greater attention toward the domestic market as Europe and Britain tightened steel import rules, while cheaper Chinese steel increased competitive pressure within India.
For smaller producers, however, the transition to renewable electricity remains difficult. The report identified high upfront capital requirements, regulatory obstacles and inadequate transmission infrastructure as major barriers to adoption. Some steelmakers also said they lack sufficient awareness of the potential economic benefits of renewable power.
Steel producers in Gujarat, one of India’s leading renewable energy-producing states, told AP that inadequate transmission infrastructure has sometimes prevented them from fully using the solar power they have invested in. One manufacturer said authorities have at times required reductions of as much as 80% in solar power generation.
Industry representatives are calling for stronger government support, particularly investment in electricity infrastructure and regulatory reforms that would make renewable energy easier for smaller manufacturers to access.
The findings suggest that India’s renewable energy transition could offer smaller steelmakers a practical way to address two pressures at once: high electricity costs and increasing demands for lower-carbon production. For a sector responsible for a significant share of the country’s emissions, expanding access to affordable renewable electricity could become one of the more immediate steps toward cleaner steel production.
The findings suggest that India’s renewable energy transition could offer smaller steelmakers a practical way to address two pressures at once: high electricity costs and increasing demands for lower-carbon production. For a sector responsible for a significant share of the country’s emissions, expanding access to affordable renewable electricity could become one of the more immediate steps toward cleaner steel production.
Paraluman P. Funtanilla
Paraluman P. Funtanilla is Tutubi News Magazine's Marketing Specialist and is a Contributing Editor. She finished her degree in Communication Arts in De La Salle Lipa. She has worked as a Digital Marketer for start-up businesses and small business spaces for the past two years. She has earned certificates from Coursera on Brand Management: Aligning Business Brand and Behavior and Viral Marketing and How to Craft Contagious Content. She also worked with Asia Express Romania TV Show.
- Paraluman P. Funtanilla
- Paraluman P. Funtanilla
- Paraluman P. Funtanilla
- Paraluman P. Funtanilla
