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On September 17, Sandeep Poundrik, Secretary of the Indian Ministry of Steel, said that due to the small scale of bilateral steel trade between India and the United States, the impact of US tariff policies on the Indian steel industry is limited, L245M steel, but the EU's Carbon Border Adjustment Mechanism (CBAM) may pose a greater challenge to Indian steel exports.
In 2024, India's direct steel exports to the US amounted to only 100,000 tons, while the country's total annual exports reached 4.5 million tons. L245M steel, Earlier this year, the US imposed a 50% tariff on all imported steel, but in 2024, India's direct exports to the US accounted for only 3% of its production, with domestic consumption being the primary driver of India's steel consumption.
While the direct impact of US tariffs is limited, the EU's CBAM mechanism is particularly crucial given that over 60% of India's steel exports went to Europe in 2024. Indian steel production primarily utilizes the high-carbon-emission blast furnace-converter process. The CBAM, which levies carbon fees based on the carbon emissions of imported steel, will officially take effect in January 2026 and is bound to have a substantial impact on exports.
Faced with the challenge of carbon tariffs, India has developed a roadmap for decarbonizing its steel industry. The short-term goal is to reduce carbon intensity per ton of steel from 2.5 tons of CO2 to 2.2 tons by 2030 through the application of renewable energy and energy efficiency improvements. L245M steel, The medium-term plan aims to achieve commercial application of green hydrogen energy and carbon capture, utilization, and storage technologies by 2045.
Poundrik stated that the cost of hydrogen energy is expected to drop to $2.5-3 per kilogram within the next five to seven years, and if it further falls below $2, hydrogen-powered steelmaking will become economically viable. Currently, major Indian companies have launched pilot projects for hydrogen-based direct reduced iron (DRI), with two projects already operational. The government has also funded R&D projects on technologies such as hydrogen energy applications in blast furnaces and alternatives to coal-based DRI processes, promoting the green transformation of the steel industry through multiple pathways.
