New Study Finds Green Steel Could Help India Avoid US$1 Trillion in Coking Coal Import Exposure

VoM News Desk | May 19, 2026 | 10:37 AM IST | Breaking News, Press Release | Follow on Google News

New Study Finds Green Steel Could Help India Avoid US$1 Trillion in Coking Coal Import Exposure

Berkeley, California [VoM News], May 19: — A new study from the India Energy and Climate Center (IECC) at the University of California, Berkeley finds that India’s next phase of steel expansion could lock the country into US$1 trillion in coking coal import costs over the coming decades. The report argues that green steel offers a strategic alternative: one that can reduce import dependence, limit exposure to currency and commodity shocks, and strengthen India’s position in export markets that are increasingly favoring lower-emissions industrial products.

India is expected to roughly double steelmaking capacity over the next decade. If much of that expansion follows the conventional blast furnace route, the report estimates India could lock itself into roughly 6 billion tons of coking coal imports — or about US$1 trillion in import costs over a 40-year period. 

“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.” 

The study finds that India’s low-cost renewable energy resources create a strong foundation for domestic green hydrogen and green steel production, with hydrogen replacing coking coal in iron production. It projects that by 2030, green hydrogen could be produced in India at about US$3 per kilogram — broadly consistent with recent market signals — enabling green steel production at roughly US$562 per ton, or about 5–10% above the cost of conventional steel from new plants.

But unlike conventional steel, which remains exposed to imported coking coal priced in U.S. dollars, green steel can be anchored in long-term, fixed-price, rupee-denominated clean power contracts. Accounting for these differences in cost structure and risk exposure, the study finds green steel could reach cost parity with, or even undercut, conventional steel by around 2030.

“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.” 

The report also argues that India’s carbon-intensive steel could become a growing trade liability. As major markets move toward carbon-based trade measures — including the EU’s Carbon Border Adjustment Mechanism, which already covers steel — India’s carbon-intensive producers could face rising pressure, while green steel could open new export opportunities. 

“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.”

The study argues that India now has a narrow window to shape where the next wave of steel capacity goes, how it is financed, and who captures the trade upside. But favorable long-term economics alone will not be enough to deliver the initial commercial projects. It calls for a bankable market-creation framework that includes long-term green steel offtake agreements, credible standards for measuring and verifying emissions, reliable access to clean power, and targeted risk-sharing mechanisms for early projects. 

“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 of IECC. “Green steel will require a similarly deliberate market-creation effort.”

VoM News Desk

VoM News is an online web portal in jammu Kashmir offers regional, National & global news.