Washington, May 19 India’s shift towards green steel production could help the country avoid nearly $1 trillion in long-term coking coal import costs and strengthen its position in future export markets, according to a new study released by the India Energy and Climate Center (IECC) at the University of California, Berkeley.
The report said India’s next phase of steel expansion could otherwise lock the country into around six billion tonnes of coking coal imports over the next four decades if conventional blast furnace-based steelmaking continues to dominate.
“India is at a strategic decision point in steel,” said Neelima Jain, Director for Industrial and Trade Policy at IECC.
“If future capacity is built around imported coking coal, the country would hardwire currency and price volatility risks into one of its most important industrial sectors. Green steel offers an alternative path.”
India is expected to roughly double its steelmaking capacity over the next decade. The report estimates that about 60–65 per cent of the planned expansion under India’s National Steel Policy could still follow the coal-intensive blast furnace-basic oxygen furnace route.
According to the study, operating such capacity at scale would require nearly 161 million tonnes of coking coal annually, with around 90 per cent likely to be imported.
The IECC study argues that India’s low-cost renewable energy resources provide a strong foundation for green hydrogen-based steelmaking, where hydrogen replaces imported coking coal in iron production. It projects that by 2030, green hydrogen in India could cost about $3 per kilogram, allowing green steel production at around $562 per tonne — roughly 5 to 10 per cent above conventional steel from new plants.
However, the report said conventional steel remains exposed to imported coking coal priced in US dollars, while green steel could rely on fixed-price, rupee-denominated renewable power contracts.
“A static cost comparison misses the central economic point,” said Jose Dominguez, Research Manager at IECC.
“Conventional steel depends on imported coking coal priced in dollars. Green steel can be powered by domestic renewable electricity under long-term rupee contracts. Over time, that makes it far more resilient,” it said.
The study said that once historical coking coal price increases and rupee depreciation are factored in, green steel could reach cost parity with, or even undercut, conventional steel production by around 2030.
The report also warned that India’s carbon-intensive steel exports could face growing pressure from international carbon-related trade barriers, especially in Europe.
The European Union’s Carbon Border Adjustment Mechanism (CBAM), which entered its definitive phase in January 2026, already covers steel imports and imposes additional costs linked to embedded carbon emissions.
“India’s green hydrogen costs are among the lowest globally,” said Nikit Abhyankar, Co-Faculty Director of IECC.
“India could be one of the few countries where green steel becomes economically viable within this decade, giving domestic producers an edge in export markets. It could also strengthen competitiveness in downstream manufacturing sectors such as automobiles and machinery.”
It called for a “market-creation framework” to support early green steel projects. The Berkley report among other things recommended long-term green steel procurement contracts, reliable access to clean power, emissions verification standards, and targeted risk-sharing mechanisms.
“India’s experience scaling renewable energy and energy storage shows that well-designed public policy can accelerate cost reduction, unlock private investment, and speed early deployment,” said Amol Phadke, Faculty Director, IECC.
“Green steel will require a similarly deliberate market-creation effort.”
India is currently the world’s second-largest steel producer after China and has set a target of reaching 300 million tonnes of installed steel capacity by 2030-31. The country remains heavily dependent on imported coking coal, mainly sourced from Australia and other global suppliers. The European Union’s CBAM is expected to have significant implications for carbon-intensive exports from emerging economies, including India.
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