Decarbonizing Indian Iron and Steel Industry: An optimization based framework for India

India’s iron and steel industry (IISI) contributes nearly 10% of national GHG emissions, making it one of the most carbon-intensive sector. India being an agrarian economy, makes decarbonization using biochar (charcoal derived from biomass) is a viable option. However, its adoption by steel plants is quite limited due to lack of available studies on the optimal number, placement and capacity of biochar facilities in the near-by regions. Moreover, techno-economic viability of biochar utilization has also not been studied so far. This study bridges these gaps by first developing an integrated GIS-MINLP model that optimizes the location, capacity and logistics of biochar production facilities for a case study of steel plant located in Southern India, IISI-A. Further, it assesses the techno-economic and environmental viability of the proposed supply chain and identifies whether adoption of biochar would be economically beneficial for the plant or not.

Results demonstrate that 48 optimal biochar production plants with a combined capacity of 19.62 MTPA can meet ISI-A’s annual biochar requirement of 5.29 MT. Lifecycle CO₂ emissions revealed that when used as a reductant and fuel substitute in steelmaking, biochar achieves up to 53% overall emission reduction, lowering specific emission intensity from 2.55 to 1.19 tCO₂/tcs. The levelized cost of biochar is estimated at USD 298 per tonne, while the marginal abatement cost varies from -39 to 33 USD/tCO₂ depending on market and policy conditions. Policy interventions such as carbon-linked pricing, PLI incentives for decentralized pyrolysis units, concessional loans, and carbon revenue contracts can promote large-scale biochar adoption and strengthen India’s low-carbon steel competitiveness.