JSPL: Measuring Transition

Tracking Technology Transition in the Indian Steel Sector: A Steel Company Report

To attract transition and concessional financing, Indian steel companies will need to produce credible transition plans. This report is the second in a series of company-focused assessments on the transition performance of the Indian steel majors.

While steel production is vital for India’s development goals, limited access to raw materials, natural gas, and steel scrap makes it difficult to scale without deploying carbon-intensive technologies. This strategy poses a threat to company CO₂ targets and could impact future profitability.

In this report, we analyse the state and outlook for JSPL (Jindal Steel and Power Ltd) in its strategy to grow steel capacity in India while reducing emissions intensity. JSPL has set an ambitious 2030 target to reduce carbon intensity by 23% to 2.0 tCO2/tcs and to become net zero by 2047. 

This report finds: 

• JSPL is not well positioned to meet its decarbonisation ambitions – there is a reasonable probability it will not achieve its short-term target of 2.0 tCO2/tcs. 

• The emissions intensity in 2024/25 has risen to 2.8 tCO2/tcs from the previous 5 year trend of 2.6 tCO2/tcs – this could be a result of the commissioning of new equipment but needs further clarity from the company. 

• In the long-term, its ambition to add significant blast furnace capacity leaves little scope for the company to become carbon neutral by 2047. 

• JSPL’s production sites – like Tata Steel India’s sites – are situated in the east of India making it unlikely that the company will be able to apply CCS to its blast furnaces. 

• JSPL’s portfolio of ongoing and future projects carries significant risk of carbon lock-in. Of an estimated US$30bn of capital investment, 79% is categorised as high-risk. 

• The company is leading in the use of shaft furnace Direct Reduction in its production of iron through coal gasification – this enables the company to use cheaper domestic sources of coal. The company is pursuing Carbon Capture and Utilisation (CCU) on coal gasifiers and integration of its shaft furnaces with green H2.

• The two additional blast furnaces planned at Angul would lead to JSPL exceeding its net zero target carbon budget. However, by focusing on the DR-EAF route for subsequent iron production capacity at Raigarh, JSPL may find a viable path to minimising emissions. 

• Grid integration and remote captive Power Purchase Agreements, experience with black H2 and prospective access to piped natural gas for grey H2, could all help to bring forward JSPL’s transition to green H2 DR-EAF steelmaking.

• JSPL steel exports account for 6% of revenues with 80% directed to the EU. While this limits exposure of current sales to 4% from punitive penalties from the CBAM, this constrains its significant expansion of production to the Indian market.