JSW Steel: 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 first 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 JSW Steel in its strategy to grow responsibly.

Key insights from the report include:

• Carbon lock-in risk from continued blast furnace expansion, including 56% of capex aligned to carbon-intensive projects.
• Potentially limited access to CCS, making it harder for CO₂ intensity reduction with blast furnaces beyond 2030.
• Exposure to EU carbon border tariffs (CBAM), with potential trade costs of up to 48-71% by 2034.
• A need for greater clarity on methane, which could influence technology decisions for optimal transition planning.
• Potential to close the ‘viability gap’ between blast furnaces and low-carbon alternatives sooner by considering a phased approach to green hydrogen.
• Higher exposure to the automotive sector, suggesting greater opportunity to benefit from green steel premiums.

JSW has demonstrated leadership among its peers by committing US$ 13 bn towards renewables and hydrogen-ready steel production methods. This puts the company in a better position to transition away from coal, but carbon lock-in from blast furnaces may slow the rate at which this can be done.