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The paper analyzes the financing gap in India's iron and steel sector, which is the country's largest industrial GHG emitter. It highlights a risk of carbon lock-in as 196 MTPA of fossil-based capacity is planned for 2021-2038. The authors propose a five-pillar framework—sectoral policies, enabling ecosystems, bankable business models, financing/derisking mechanisms, and financial sector regulations—to transition from fossil-intensive production to low-carbon technologies like green hydrogen-DRI. It details specific instruments such as Carbon Contracts for Difference (CCfD), blended debt funds, and Article 6 of the Paris Agreement to bridge the investment gap.

The paper argues that for India to achieve net-zero emissions by 2070, the iron and steel sector—responsible for 10-12% of national GHG emissions—must shift to low-carbon production. It proposes a comprehensive 'Green Steel Mission' and a national sustainable finance taxonomy to bridge the gap between conventional and green technologies. The authors emphasize the need for differentiated strategies for primary steel (BF-BOF route) and secondary steel (DRI-IF/EAF route), noting that secondary producers face higher financing barriers despite having high near-term abatement potential. Key recommendations include mandating corporate transition plans, developing a detailed sectoral technology roadmap, and adopting innovative financial instruments like Carbon Contracts for Difference (CCfD) to support low-TRL technologies.