India Sets CO2 Intensity Targets for 255 Steel Plants

What happened

India's Union environment ministry has issued a draft notification, dated June 26, 2026, assigning plant-specific greenhouse-gas emission-intensity reduction targets to 255 iron and steel units under the Carbon Credit Trading Scheme (CCTS), starting compliance year FY2026-27 (Hindustan Times). The draft was opened for 60 days of public comment, a window that closed in late August 2026; no final notification had been published when this article went live. The 255 units carry a combined baseline of 358.6 million tonnes of CO2 equivalent (MtCO2e), making steel the largest sector yet brought under India's carbon market (Down To Earth).

Why it matters

The direct consequence for industrial buyers: 255 named steel plants now have a compliance clock running, and analysts expect the first response to be operational — not a wholesale shift to new process routes. That makes furnace efficiency, insulation and lining performance a near-term compliance lever, not a someday concern.

Industry impact

India's steel sector is the world's second-largest by output (~151 million tonnes crude steel in FY2024-25) and contributes 10-12% of the country's total CO2 emissions (Down To Earth). As of 2023-24, India's average emission intensity was 2.54 tCO2 per tonne of crude steel, against a global average of 1.9 tCO2/tonne and the Ministry of Steel's own 2030 goal of 2.2 tCO2/tonne under its Green Steel Taxonomy (PIB). Required intensity cuts across the 255 entities range from 2.1% to 9.3%, with a median around 5.5% — plants running hotter than roughly 3 tCO2e/tonne draw the steepest cuts, consistent with the scheme's benchmarking design.

How this affects refractory users

Emission intensity per tonne of steel is, in large part, a function of fuel and power burned per tonne — and furnace heat loss through the shell, roof and duct work is fuel that never reaches the product. Down To Earth reports that 75 of the 255 sites already sit at or below the 2.2 tCO2e/tonne threshold, together accounting for roughly 27% of production covered by the mechanism; the remaining plants are the ones under the most pressure to close that gap quickly. A Centre for Science and Environment analyst quoted by Hindustan Times expects the first compliance cycle to be met mainly through "energy efficiency and other relatively low-cost operational measures" rather than new capital-intensive routes — which is precisely the territory of lining selection, insulation backup and reline scheduling rather than furnace rebuilds.

Procurement & maintenance implications

Plants approaching their first CCTS compliance year should treat furnace audits — shell temperature surveys, insulation backup condition, lining campaign data — as a near-term action item rather than something to defer to the next major shutdown. Reheating furnaces, ladle preheaters and rotary/tunnel kiln sections are the highest-leverage targets, since backup insulation behind the working lining directly reduces shell losses without touching production rate. Procurement teams should also flag that India's BF-BOF fleet is relatively young and approaching its first relining cycle (Down To Earth, citing Global Energy Monitor); a reline is also a one-time opportunity to specify better-insulated designs rather than a like-for-like replacement.

SAPL perspective

From decades supplying Indian steel plants, this reads as a compliance-driven version of a maintenance conversation SAPL already has with customers: shell-heat loss and lining life both trace back to how the furnace is insulated and lined, not just what it is lined with. Where a plant is reviewing furnace efficiency ahead of its FY2026-27 baseline, ceramic fibre insulation for backup and duct lining and insulating LCC/ULCC castables for furnace walls are the components most directly tied to reducing shell losses. Our steel plant solutions page maps how these zones interact with furnace design. This is engineering context on a public regulatory draft, not a pitch tied to any named plant on the list.

Supporting statistics

• 255 iron and steel units covered; combined baseline 358.6 MtCO2e — Down To Earth.
• India average emission intensity 2.54 tCO2/tonne crude steel (2023-24) vs global average 1.9 tCO2/tonne — Down To Earth.
• Ministry of Steel 2030 target: 2.2 tCO2/tonne crude steel — PIB.
• Required intensity cuts: 2.1-9.3% per entity, median ~5.5% — Down To Earth.
• 75 sites already at/below 2.2 tCO2e/tonne, ~27% of covered production — Down To Earth.
• Draft issued June 26, 2026; 60-day public comment window (now closed); compliance from FY2026-27 with FY2023-24 baseline — Hindustan Times.

What could happen next

Now that the 60-day comment window has closed, expect the draft to move toward finalization broadly in its current shape, since it is already a revision of a June 2025 draft. The longer-term question is whether compliance cycles beyond the first one start shaping investment decisions rather than just operational tweaks: Down To Earth flags that India has roughly 258 MTPA of new steelmaking capacity under development, over two-thirds of it coal-based BF-BOF, which risks locking the sector into higher emission intensity for another two to three decades unless efficiency is designed in now — starting with how furnaces are lined and insulated.