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India Leads Global Blast Furnace Expansion Despite Decarbonization Push

India is at the forefront of coal-intensive steel production, accounting for over 60% of new blast furnace capacity being built worldwide. This is a key finding from the sixth annual report by Global Energy Monitor (GEM), highlighting that the global steel industry continues to rely heavily on coal despite growing pressure to cut emissions.

Global Blast Furnace Expansion Continues

GEM reports that 322 million tons per year of new blast furnace capacity has been announced or is currently under construction around the globe — 7% more than last year. An additional 85 million tons of existing capacity is planned for modernization through blast furnace repairs and life extension. Meanwhile, only 141 million tons of capacity has official closure plans, meaning global blast furnace capacity could increase by a net 90 million tons by 2035.

India and China at the Centre

India and China together account for 85% of all new blast furnace projects worldwide. Notably, around 93% of India’s new pig iron production capacity is based on blast furnace technology. However, only 5% of India’s planned capacity has entered the actual construction phase, leaving an opportunity to redirect investments toward cleaner technologies.

Decarbonization Progress Remains Slow

Despite widespread commitments to green steel, progress on low-carbon technologies is modest. The global share of electric arc furnace (EAF) capacity rose by just 1% over the year, from 33% to 34%. In the direct reduced iron (DRI) segment, only 2% of operating capacity currently uses green hydrogen as the primary reducing agent. GEM estimates that 88% of the steel industry’s CO2 emissions come from coal-based production, with the sector contributing around 11% of global carbon dioxide emissions.

India’s Steel Ambitions

India aims to expand steel capacity to 400 million tons by FY2035/36 under its proposed National Steel Policy 2025, requiring investments of approximately ₹17 trillion ($183 billion). The policy also targets doubling exports to 20 million tons and reducing coking coal import dependency from 90% to 80%. Without accelerating the shift to EAF and green hydrogen technologies, the steel industry’s decarbonization goals remain a distant target.