A 26% green steel mandate in government procurement could unlock up to 16 million tonnes per annum (MTPA) of demand from public projects alone by FY30.
Feb 27, 2026
A 26% green steel mandate in government procurement could unlock up to 16 million tonnes per annum (MTPA) of demand from public projects alone by FY30, according to a report by CII–Green Business Centre, supported by Climate Catalyst.
The findings underscore that Indian steel producers are technically prepared and commercially willing to supply certified low-carbon steel at scale, provided demand is visible and supported by transparent cost-recovery mechanisms. On the demand side, public agencies already procure steel at volumes sufficient to anchor a national green steel market.
India’s public procurement, valued at approximately INR 45-50 lakh crore (approx. USD 600 billion) annually, or nearly one-fifth of GDP. In FY 2024, government-linked infrastructure projects accounted for 22% of the country’s total steel demand, equal to 30.6 million tonnes of steel. This generated approximately 78 million tonnes of CO2 emissions, roughly equivalent to 21% of India’s total steel-sector emission.
Given the scale of steel consumption and emissions concentrated within public infrastructure, strategic adoption of Green Public Procurement (GPP) for steel could thus create India’s first credible, large-scale demand signal for low-carbon steel and substantially accelerate the industrial transition already underway.
The projects analysed that introducing green steel into government procurement from FY 2028 is estimated to increase overall project costs by 0.2-1.2%, suggesting that the associated price premium is marginal. In contrast, the emissions reductions achieved are substantial, making green public procurement a high-impact and cost-effective lever for aligning India’s steel sector with global climate commitments.
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The analysis draws on in-depth interviews and primary data from 28 steel producers representing 88 MTPA of crude steel capacity, or roughly 60% of India’s current national output. On the demand side, the study incorporates perspectives from 12 of India’s largest public buyers of steel.
