Green Steel Technology Challenge

Innovative Technologies to Decarbonize Steel Manufacturing in West Bengal, India

Why existing solutions are not enough

 

Existing decarbonization efforts in India’s steel sector have largely focused on incremental improvements, such as energy efficiency measures and compliance with schemes, such as Perform, Achieve, and Trade  (PAT Scheme), coal blending, and upgrading to captive renewable energy. While these measures help reduce emissions intensity, they are insufficient to achieve the emission deductions needed for long term climate goals.

 

As steel demand and production continue to grow, efficiency gains alone cannot offset emissions from expanding production capacity. Key barriers include: (i) continued dependence on coal-based blast furnace technologies; (ii) limited availability of high-quality scrap for recycling; (iii) high costs associated with green hydrogen production and utilization; (iv) lack of shared carbon capture, utilization, and storage (CCUS) infrastructure; (v) intermittent renewable energy supply and grid integration challenges; and (v) limited commercial viability of emerging low-carbon steel technologies.

Innovative solutions are therefore needed to accelerate the transition to commercially viable low-carbon steel production pathways suitable for Indian conditions.

Illustrative Solutions

 

The challenge is open to any innovative technology that can meaningfully reduce emissions from steel production in West Bengal at scale. Solutions may address decarbonization across a wide range of pathways, for example:

  • Production process innovation (including changes to steelmaking routes and equipment)
  • Clean energy integration (renewables, green hydrogen, waste heat recovery)
  • Carbon capture, utilization, or storage
  • Novel feedstock, material, or recycling approaches
  • Digital and process optimization technologies

 

These are illustrative pathway categories only. ADB does not prescribe or favor any specific technology, and applicants are strongly encouraged to propose novel approaches, including those not represented in the list above.

Financing and co-financing

 

ADB can fund up to $450,000 per project under this challenge. Applicants must contribute at least 10% of the total project cost, from their own resources or from other funders. Co-financing may be cash or in-kind (for example, staff time and travel). ADB may select up to two solutions under this challenge. Budgets should reflect the scope and scale of the proposed pilot(s) and will be benchmarked against comparators for value for money).

Operating conditions and constraints

 

Steel production in West Bengal takes place in industrial environments characterized by continuous operations, high-temperature processes, coal-based production routes, capital-intensive infrastructure, and integration with regional industrial ecosystems. Solutions must be designed to operate under these industrial conditions:

  • Deployment environment: Steel plants that operate around the clock, involve high-temperature and high-pressure processes across multiple integrated production stages, and are subject to the extreme heat, humidity, and monsoon conditions typical of West Bengal. Solutions must be deployable without interrupting production or compromising throughput. Regarding water availability, currently, the existing steel plants in Raghunathpur steel cluster in West Bengal is brining water from a a multi-purpose dam built across the Damodar River by the Damodar Valley Corporation (DVC) which is located about 25 km from the steel cluster. E dam was built in late 1950s and it is one of the main sources of surface water for the state of West Bengal. The water source is reliable and sustainable.
  • Interoperability and non-disruption: Solutions must be designed to work alongside or integrate with existing plant equipment (blast furnaces, electric arc furnaces, direct reduction facilities, and supporting infrastructure) without compromising safety, reliability, or product quality.
  • Safety and regulatory compliance: Any physical or digital component installed inside plant premises must meet applicable steel industry safety standards, worker safety requirements, and environmental regulations issued by the participating manufacturer, Central and State Pollution Control Boards, and other relevant authorities.
  • Raw material and feedstock: Solutions that depend on scrap, hydrogen, or other alternative feedstocks should account for variability in scrap quality and availability, dependence on imported inputs, and current feedstock supply constraints in India.
  • Energy and water availability: Steel production requires reliable, high-capacity energy and significant water resources. Solutions dependent on renewable electricity, green hydrogen, grid power, or water-intensive processes should assess supply availability, reliability, and any local constraints at their proposed pilot site, and consider backup, storage, or efficiency options where continuous supply cannot be assumed.
  • Commercial viability: Solutions must be viable within India's price-sensitive steel market, where capital cost recovery, market prices, and access to financing constrain investment decisions. Applicants should demonstrate a credible pathway to commercial viability at scale.
  • Industrial ecosystem and supply chain: Solutions should account for variable technology readiness levels across India's steel supply chain, availability of skilled workforce, and logistics or infrastructure limitations in transporting materials, equipment, and specialised inputs to and from West Bengal. West Bengal’s economy has experienced a marked erosion in industrial strength. Once among India’s most industrialized states in the 1960s, the state has undergone prolonged stagnation, reflected in the decline of manufacturing's share in GSDP from 22.0% in FY1981 to 11.9% in FY2025. During 2020–2025, West Bengal's average manufacturing share of GSDP stood at 12.7%, ranking 14th nationally and well below leading industrial states such as Gujarat (31.6%), Haryana (16.4%), Maharashtra (13.5%), Odisha (18.3%), and Tamil Nadu (17.4%). Persistent structural rigidities, regulatory bottlenecks, infrastructure gaps, and limited availability of industrial land have further undermined competitiveness and deterred private investment, highlighting the need for targeted industrial development and coordinated policy and regulatory reforms.
  • Durability and maintenance: Physical components must withstand demanding industrial use with minimal downtime, and be maintainable using skills and resources available locally in West Bengal.
 

Data and information available to applicants

 

 

 

 

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