ANNOUNCEMENTS
The steel industry is central to India’s economic growth but remains one of its most carbon-intensive sectors. As India pursues its long-term climate commitments while meeting rapidly rising steel demand—expected to quadruple by 2050—the transition to low-carbon steelmaking technologies (LCTs) has become a national priority. Although existing literature assesses the technical feasibility of low-carbon pathways, limited attention has been given to the economic drivers and policy instruments required to make LCT investments competitive. This thesis addresses this gap by examining how carbon pricing mechanisms can be designed to make LCT economically viable relative to conventional technologies (CT).
A dynamic techno-economic model is developed to integrate financial, technical, and economic variables relevant to investment decisions in the steel industry. The model identifies carbon price thresholds at which LCT profitability equals or exceeds that of CT over the full project life cycle. Results indicate that, under current technology conditions, a carbon price of approximately USD 105–130 per tonne of CO₂ is required to make LCT investment competitive. Simulations of multiple policy scenarios show that while carbon pricing can shift investment incentives, its effectiveness is constrained by price volatility and long-term uncertainty.
To address these limitations, the study identifies three critical enabling instruments: (1) a Digital Climate Label to increase market demand for lowcarbon steel through consumer transparency; (2) capital subsidies for first movers to offset high upfront costs and drive learning-curve effects; and (3) green hydrogen Contracts-for-Difference with a recommended strike price of USD 1/kg to stabilize operational costs in hydrogen-based pathways. By integrating carbon pricing with targeted financial and regulatory support, this research provides a robust analytical framework and policy roadmap for accelerating India’s transition to a competitive, low-carbon steel sector.
