JSW readies for CBAM era with 4 mt green steel unit

JSW Steel Ltd, India’s second-largest maker of the alloy, plans to establish a green steel manufacturing facility by 2030 as part of its response to the European Union’s (EU’s) Carbon Border Adjustment Mechanism (CBAM), said Jayant Acharya, joint managing director and chief executive.

“We are looking to set up a lower carbon-emitting facility for steel in the western part of India, subject to board approval. With this, we will be able to provide low-carbon steel for both the international and domestic markets,” Acharya said in an interview.

“It will have a capacity of 4 million tonnes (mt), and the plan is to start production by 2030. We are trying to complete it in two parts. We will do phase I (up to 2 mt) just before 2030, and the remaining construction will be going on and may spill over by one or two years.”

However, Acharya did not divulge the funding outlay for the project or the timeline for project approval. “I cannot share anything more on the project. We will be seeking board approval.”

The EU’s CBAM transition, in effect from 1 October to 31 December 2025, will require companies to furnish extensive production and emission data for goods destined for the EU. On 1 January 2026, the tax phase of CBAM will begin. Importers will be required to purchase CBAM certificates to cover the embedded emissions of their products. The CBAM will be applied to a limited number of goods initially, including cement, iron and steel, aluminium, fertilizers and electricity, but the list will subsequently be expanded to cover all goods.

During this transition period, the EU aims to create a pilot and learning phase involving all stakeholders, such as importers, producers and authorities. This phase will allow the EU to gather valuable data on embedded emissions, which will help refine the methodology for the definitive phase.

JSW’s investment for the facility will be in addition to the ₹10,000 crore the company had announced for its green energy transition plans, Acharya added.

As part of its ₹10,000 crore brownfield expansion plan, the firm plans to increase capacity from the current 28 mt to 50 mt by 2050. “The (proposed) green steel unit will be separate from the ₹10,000 crore electric arc furnace plant based on direct reduced iron (DRI) technology,” he said.

The company is also in the process of adding 8.5 mt within two years to reach a capacity of 37 mt, Acharya said.

On Friday, JSW Steel reported a ₹2,773 crore profit for the September quarter from a loss in the year earlier. Consolidated operating revenue rose 6.71% from a year earlier to ₹44,584 crore amid robust domestic demand.

Acharya said the Israel-Palestine war would have an impact on global demand, but domestic demand will remain robust as India continues its nation-building process. “I feel that the GDP (gross domestic product) to steel, structurally, will be very strong in India because this is the nation-building phase for the country.”

“With infrastructure building picking up, manufacturing, energy transition and very strong consumption, we will remain in double-digit for steel, which means that incrementally we will add 10-12 mt this year. Thereafter, we will be adding 12-13 MT every year; that is, in seven years, up to the end of this decade, we will be adding more than 100 mt. The capacities which are going to come up in India will be for the domestic market.”