<h2><strong>Policy & Regulation Radar</strong></h2>.<p><strong>The divergence</strong></p><p>In June 2026, the government issued revised draft CCTS targets for the iron and steel sector, bringing 255 units closer to inclusion in India’s compliance carbon market. Indian steel's average emissions intensity — 2.54 tCO2e/t, sits well above both the EU average (~2.2 tCO2e/t) and the global average (~1.9 tCO2e/t), which is the core of that exposure.</p>.<h2><strong>Sector Snapshot: Steel</strong></h2>.<p>Steel is at the centre of India's growth-versus-decarbonisation challenge. In June 2026, the government issued revised draft CCTS targets for the iron and steel sector which, if finalised, would represent the largest sectoral expansion of India's compliance carbon market to date, covering 255 units with a combined baseline of 358.6 MtCO2e.</p><p>This regulatory push comes as India continues to rapidly expand its steelmaking capacity. Capacity reached ~222 MTPA in June 2026 and is targeted to rise to 300 MTPA by 2030. At the same time, India's Green Steel Taxonomy excludes steel above 2.2 tCO2e per ton of finished steel from green ratings. The sector therefore must add ~78 MTPA of capacity while lowering emissions intensity — making expansion and decarbonisation parallel rather than sequential priorities.</p>.<h3><strong>The Gap</strong></h3><p>The companies above illustrate the fact that decarbonisation is becoming an operational reality. Whether they can scale this effort while adding capacity remains to be seen. Three constraints are in operation:</p><ul><li><p><strong>Cost barriers:</strong> Low-carbon steelmaking currently carries a premium of roughly 10-15% in government procurement modelling, though independent techno-economic analyses put the added cost as low as 3-5% for the most efficient technology pathways</p></li><li><p><strong>Scrap deficit: </strong>EAF and induction-furnace routes account for roughly 43-45% of India's crude steel output but 48 countries now restrict scrap exports, and BCG projects the global scrap market will flip from a ~9 million ton surplus today to a ~15 million ton deficit by 2030 as demand outpaces supply growth</p></li><li><p><strong>CBAM exposure: </strong>The India-EU FTA provides a 1.6 MT duty-free quota for Indian steel but does not exempt those exports from CBAM. CBAM applies separately to in-scope imports, while CCTS compliance at home does not provide an automatic carve-out</p></li></ul> .<h3><strong>The Open Question</strong></h3><p>India is trying to do two things at once: add roughly 78 MTPA of capacity to reach its 2030 ambition and make each ton less carbon-intensive. New high-emission assets are at risk of carbon lock-in. Conversely, moving too early into expensive, low-carbon routes can impact competitiveness. It is unclear who will pay for this transition: producers, customers, public procurement, or export markets (through carbon pricing).</p>.<h2><strong>Data Point of the Quarter</strong></h2>.<h2><strong>DID YOU KNOW?</strong></h2><p><strong>'Green steel' in India does not mean zero-carbon steel</strong></p><p>India's Green Steel Taxonomy is intensity-based. Steel qualifies for a green rating only when plant emissions are below 2.2 tCO2e per ton of finished steel. The label therefore signals relative carbon performance, not zero emissions. As of May 2026, 94 producers across 15 states had received Green Steel Certificates. For buyers, the implication is simple: ask for the certified emissions-intensity value and boundary, not just the word 'green'.</p>.<h2><strong>Actionable Tools</strong></h2>
<h2><strong>Policy & Regulation Radar</strong></h2>.<p><strong>The divergence</strong></p><p>In June 2026, the government issued revised draft CCTS targets for the iron and steel sector, bringing 255 units closer to inclusion in India’s compliance carbon market. Indian steel's average emissions intensity — 2.54 tCO2e/t, sits well above both the EU average (~2.2 tCO2e/t) and the global average (~1.9 tCO2e/t), which is the core of that exposure.</p>.<h2><strong>Sector Snapshot: Steel</strong></h2>.<p>Steel is at the centre of India's growth-versus-decarbonisation challenge. In June 2026, the government issued revised draft CCTS targets for the iron and steel sector which, if finalised, would represent the largest sectoral expansion of India's compliance carbon market to date, covering 255 units with a combined baseline of 358.6 MtCO2e.</p><p>This regulatory push comes as India continues to rapidly expand its steelmaking capacity. Capacity reached ~222 MTPA in June 2026 and is targeted to rise to 300 MTPA by 2030. At the same time, India's Green Steel Taxonomy excludes steel above 2.2 tCO2e per ton of finished steel from green ratings. The sector therefore must add ~78 MTPA of capacity while lowering emissions intensity — making expansion and decarbonisation parallel rather than sequential priorities.</p>.<h3><strong>The Gap</strong></h3><p>The companies above illustrate the fact that decarbonisation is becoming an operational reality. Whether they can scale this effort while adding capacity remains to be seen. Three constraints are in operation:</p><ul><li><p><strong>Cost barriers:</strong> Low-carbon steelmaking currently carries a premium of roughly 10-15% in government procurement modelling, though independent techno-economic analyses put the added cost as low as 3-5% for the most efficient technology pathways</p></li><li><p><strong>Scrap deficit: </strong>EAF and induction-furnace routes account for roughly 43-45% of India's crude steel output but 48 countries now restrict scrap exports, and BCG projects the global scrap market will flip from a ~9 million ton surplus today to a ~15 million ton deficit by 2030 as demand outpaces supply growth</p></li><li><p><strong>CBAM exposure: </strong>The India-EU FTA provides a 1.6 MT duty-free quota for Indian steel but does not exempt those exports from CBAM. CBAM applies separately to in-scope imports, while CCTS compliance at home does not provide an automatic carve-out</p></li></ul> .<h3><strong>The Open Question</strong></h3><p>India is trying to do two things at once: add roughly 78 MTPA of capacity to reach its 2030 ambition and make each ton less carbon-intensive. New high-emission assets are at risk of carbon lock-in. Conversely, moving too early into expensive, low-carbon routes can impact competitiveness. It is unclear who will pay for this transition: producers, customers, public procurement, or export markets (through carbon pricing).</p>.<h2><strong>Data Point of the Quarter</strong></h2>.<h2><strong>DID YOU KNOW?</strong></h2><p><strong>'Green steel' in India does not mean zero-carbon steel</strong></p><p>India's Green Steel Taxonomy is intensity-based. Steel qualifies for a green rating only when plant emissions are below 2.2 tCO2e per ton of finished steel. The label therefore signals relative carbon performance, not zero emissions. As of May 2026, 94 producers across 15 states had received Green Steel Certificates. For buyers, the implication is simple: ask for the certified emissions-intensity value and boundary, not just the word 'green'.</p>.<h2><strong>Actionable Tools</strong></h2>
