India is the world’s second largest steel producer, but most of that steel is made through the blast furnace route, generating roughly 2.5 tonnes of CO₂ per tonne of finished steel. The EU CBAM makes this a financial problem from 2026. The long-term decarbonisation pathway runs through scrap-based electric arc furnaces and eventually hydrogen-based direct reduced iron under the National Green Hydrogen Mission.

Aluminium smelting is almost entirely an electricity problem — roughly 80% of the sector’s emissions come from captive coal power plants, not the electrolysis process itself. The decarbonisation pathway is clearer than steel: switch from coal to renewable electricity through open access procurement. The Green Energy Open Access Rules and the ISTS waiver are the primary tools. CBAM covers only direct process emissions for now, but the pressure will increase.

India’s fertiliser industry runs on natural gas. The gas feeds ammonia synthesis, which feeds urea production. Decarbonising this sector means replacing that gas with green hydrogen — which is technically clear but economically still a stretch at current costs. Nitrogenous fertilisers are among the highest-emission CBAM-covered products. The SIGHT programme and the proposed Hydrogen Purchase Obligation are the key policy instruments shaping the transition timeline.

Indian Railways has electrified 99% of its broad-gauge network and is targeting net-zero by 2030. Road freight is a very different story — medium and heavy trucks account for 45% of on-road transport emissions but fewer than 900 electric heavy trucks are in operation today. The barriers are cost, charging infrastructure, financing and the absence of strong mandates. The e-FAST India platform and the Energy Conservation Act’s extension to transport are the primary policy levers.

The carbon intensity of India’s electricity grid determines the Scope 2 emissions of every industrial consumer in the country. The power sector is the foundation that every other sector’s decarbonisation sits on. India has already exceeded 50% non-fossil installed capacity ahead of its 2030 NDC target. At the same time, India is building a domestic carbon market — the Carbon Credit Trading Scheme builds on the PAT Scheme’s ESCert mechanism and will eventually become the central compliance instrument for industrial emitters.