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Are electricity prices and cross-subsidies a barrier to decarbonising India's steel industry?

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  • Åhman, M.
  • Arens, M.

Abstract

The main options for deep decarbonisation of primary steel production are to continue using coal and employ carbon capture and storage (CCS) or to change the production process to direct reduction by utilizing hydrogen produced from renewable energy resources. In India, the world's second-largest steel producer, a shift to renewables is inhibited by the current power market regime, which includes a complex cross-subsidy scheme. We calculate the cost of energy and the amount of cross-subsidies paid by the Indian steel industry, analyse the effects of the cross-subsidies on deep decarbonisation options, and discuss the barriers to their removal.

Suggested Citation

  • Åhman, M. & Arens, M., 2024. "Are electricity prices and cross-subsidies a barrier to decarbonising India's steel industry?," Utilities Policy, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:juipol:v:91:y:2024:i:c:s0957178724001474
    DOI: 10.1016/j.jup.2024.101853
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    2. Constantin Johnson & Max Åhman & Lars J. Nilsson & Zhenxi Li, 2025. "Emerging green steel markets surrounding the EU emissions trading system and carbon border adjustment mechanism," Nature Communications, Nature, vol. 16(1), pages 1-16, December.

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