What Happened
- A Confederation of Indian Industry (CII) study, released in February 2026 in collaboration with Climate Catalyst, found that mandating 26% certified green steel in government projects valued above Rs 1 crore could unlock 16 million metric tonnes (MTPA) of annual demand from government projects alone by FY 2029-30.
- The report calls for a phased Green Public Procurement (GPP) mandate to be announced in 2026-27, with integration into procurement guidelines and pilot projects before a nationwide mandate from FY 2027-28.
- Steel and cement together account for nearly one-fifth of India's industrial emissions and roughly one-third of industrial CO2, making them critical sectors for meeting India's Nationally Determined Contribution (NDC) targets under the Paris Agreement.
- Government-linked projects consumed approximately 31.6 million tonnes of steel and generated around 70 million tonnes of CO2 in FY2024 — redirecting even a portion of this demand towards certified green materials would drive industrial decarbonisation with a cost premium of only 0.2–1.2%.
- India's Ministry of Steel released and notified a Green Steel Taxonomy on December 12, 2024, providing the classification framework that GPP mandates would rely upon.
Static Topic Bridges
Hard-to-Abate Sectors and Industrial Decarbonisation
Steel and cement are classified as "hard-to-abate" sectors because their production processes involve emissions that cannot be eliminated simply by switching to renewable electricity. Steel production through the Blast Furnace-Basic Oxygen Furnace (BF-BOF) route uses coking coal as both a fuel and a chemical reducing agent to convert iron ore into iron. Cement production releases CO2 through calcination — the chemical breakdown of limestone (CaCO3) into lime (CaO) and CO2 — a process-inherent emission independent of energy source.
- India is the world's second-largest steel producer (crude steel output ~140 MTPA)
- India's cement sector is the second-largest globally (~380 MTPA capacity)
- BF-BOF route accounts for ~54% of India's steel production; emits ~2.3 t CO2 per tonne of steel
- Green steel alternatives: Electric Arc Furnace (EAF) using scrap, Direct Reduced Iron (DRI) using green hydrogen
- Blended cements (fly ash, slag) can reduce cement emissions by 20–30%
Connection to this news: Because market forces alone will not decarbonise these sectors quickly enough, public procurement — representing the single largest source of steel and cement demand in India — is identified as the most direct policy lever to create a market for low-carbon materials at scale.
India's Green Steel Taxonomy (2024)
The Ministry of Steel notified India's Green Steel Taxonomy in December 2024, creating the first statutory classification of steel by carbon intensity. It establishes a star-rating system tied to emission intensity per tonne of finished steel, enabling buyers — including the government — to specify and verify low-carbon procurement.
- Five-star green steel: emission intensity below 1.6 t CO2e per tonne of finished steel
- Four-star: 1.6–2.0 t CO2e/tonne
- Three-star: 2.0–2.2 t CO2e/tonne
- Notified via e-Gazette, December 23, 2024; administered by Ministry of Steel
- Taxonomy aligns with international frameworks (EU Carbon Border Adjustment Mechanism, Science-Based Targets initiative)
Connection to this news: The taxonomy is the prerequisite for GPP mandates — it defines what "green" means in procurement terms, allows certification and verification, and gives contractors a clear target to meet.
General Financial Rules (GFR) 2017 and Public Procurement Framework
Public procurement in India is governed primarily by the General Financial Rules (GFR), 2017, issued by the Ministry of Finance. GFR 2017 replaced the earlier GFR 2005 and introduced Make-in-India preferences, quality standards, and environmental considerations into government purchasing. Procurement by Central Public Sector Enterprises (CPSEs) and government departments totals Rs 45–50 lakh crore annually, making it one of the largest procurement markets in the world.
- GFR 2017, Rule 149: mandates procurement of goods and services of appropriate quality at competitive prices
- Public Procurement (Preference to Make in India) Order, 2017: mandates domestic procurement; can be extended to sustainability criteria
- No binding green procurement standard currently exists for steel or cement in India
- Carbon Credit Trading Scheme (CCTS), notified 2023, creates a domestic carbon market that could price green steel premiums
Connection to this news: The article argues that amending GFR 2017 or issuing a separate GPP notification to mandate a minimum share of certified green steel in public contracts — phased from 26% to 37% — would create immediate and scalable demand without a significant cost burden.
India's Climate Commitments — NDCs and Paris Agreement
India submitted its updated Nationally Determined Contribution (NDC) to the UNFCCC in August 2022, committing to: (a) reduce the emission intensity of GDP by 45% from 2005 levels by 2030; (b) achieve 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030; and (c) create an additional carbon sink of 2.5–3 billion tonnes of CO2 equivalent through forests and tree cover by 2030.
- India ratified the Paris Agreement on October 2, 2016
- Updated NDC submitted: August 26, 2022
- India's Long-Term Low Emission Development Strategy (LT-LEDS) submitted to UNFCCC in November 2022
- Industrial sector accounts for ~26% of India's total GHG emissions
- Steel and cement together contribute ~one-third of India's industrial GHG emissions
Connection to this news: Meeting the 45% emission intensity reduction target requires transformation of heavy industry. GPP for green steel and cement directly advances this goal by creating demand-side pull for low-carbon production, complementing the supply-side push from the Green Steel Taxonomy and the Carbon Credit Trading Scheme.
Key Facts & Data
- Government-linked projects consumed 31.6 MTPA steel and generated 70 Mt CO2 in FY2024
- 26% green steel mandate could create 16 MTPA demand from public projects by FY2030
- 37% mandate: up to 24 MTPA demand, avoiding 29.7 Mt CO2 (equivalent to removing 6–9 million cars annually)
- Cost premium of green steel in public projects: only 0.2–1.2% of total project cost
- 93% of 28 surveyed steel manufacturers (88 MTPA capacity) said they are ready to supply certified green steel
- India's Green Steel Taxonomy notified: December 23, 2024 (Ministry of Steel)
- CII recommends GPP mandate announcement: 2026-27; nationwide mandate: FY 2027-28
- India's steel sector emission intensity: ~2.3 t CO2/tonne (BF-BOF route); green target: below 1.6 t CO2/tonne (5-star)
- Public procurement in India: Rs 45–50 lakh crore annually