From Plans to Plants: Inside India’s $150 Billion Push to Clean Up Heavy Industry

India’s efforts to decarbonise its hard-to-abate industries gained momentum with the launch of the Industrial Transition Accelerator (ITA) India Project Support Programme, which aims to unlock financing and fast-track clean manufacturing projects in the steel, cement, aluminium, and chemical sectors.

The day-long session, organised by the ITA in collaboration with the Boston Consulting Group (BCG) and the Confederation of Indian Industry (CII), brought together policymakers, industry leaders, and financiers to chart a roadmap for making industrial decarbonisation commercially viable.

The initiative, launched under the banner Project Nirmaan, forms the first phase of the ITA India Country Programme themed “Unlocking India’s Clean Industrialisation Opportunity.” Over the next 18–24 months, the programme aims to move India’s industrial transition agenda “from plans to plants” by enabling the first wave of commercial-scale clean projects and addressing demand, finance, and infrastructure gaps.

65 Projects, $150 Billion Investment Pipeline

According to ITA research, India’s aluminium, steel, cement, and chemical industries are leading the country’s clean industrial transition with a pipeline of 65 projects — 59 announced, four operational, and two at the final investment decision (FID) stage — requiring an investment of over $150 billion. The ITA report said that these projects include major energy infrastructure developments.

Based on ITA’s findings, the steel and cement pipeline remains relatively small, offering limited immediate impact on sectoral carbon intensity. However, multiple pilot projects underway can help assess commercial viability and pave the way for the scaled deployment of breakthrough technologies.

The report highlighted that Odisha, Gujarat, Andhra Pradesh, Karnataka, and Maharashtra together account for nearly 80% of green chemical project activity, driven by abundant renewable energy potential and proactive industrial policies.

“India’s 65-project pipeline, the third-largest globally, represents a $150 billion opportunity to avoid 160 MtCO₂ annually,” said James Schofield, Managing Director of ITA. “This is about building the green industries of the future that will power Viksit Bharat 2047.”

“It is clear that we have the opportunity upon us now. How we unlock this opportunity - that is key, said Ms Seema Arora, Deputy Director, CII. She highlighted that the next phase is about unlocking the opportunity. “The unlock has to be happen at various levels and at the same time, we need to ensure that the fruits of the opportunity is shared with all through improved standard of living and new job creation”, she said.

Financing, Policy Uncertainty Remain Key Barriers

Most major renewable energy (RE) players have announced at least one project to diversify from green electrons into green molecules. These companies are well positioned to leverage their project execution experience to manage the high capital expenditures associated with hydrogen-based production.

Despite this growing interest, financing remains a major hurdle for first-of-a-kind (FOAK) projects that lack operational track records. Without clear and consistent demand signals, green chemical and industrial projects struggle to become bankable. Developers typically require binding offtake contracts of 10–20 years to secure financing, but such agreements remain limited.

Currently, six major developers — AM Green, ACME, NTPC, ReNew, Ocior, and Avaada — account for approximately half of the announced pipeline capacity, with the remaining capacity distributed among over 20 players.

The ITA report also flagged policy and regulatory uncertainty as a challenge, particularly for the steel and aluminium sectors. In chemicals, the announced green ammonia and methanol capacity (51 projects with 30–35 MTPA capacity) already exceeds current national production, positioning these projects at the forefront of India’s clean industrial transition. Developers are expected to build these in phases, with first-phase capacities typically between 0.1–0.3 MTPA to achieve scale economies.

The report added that while the steel and cement sectors have smaller pipelines, multiple pilot projects are underway to establish commercial viability and lay the groundwork for large-scale deployment of new technologies.

Industry Calls for Innovative Financing Models

At the event, Srivatsan Iyer, Global CEO of Hero Future Energies, spoke about developing a risk-sharing model for heavy industries in India. It would promote the use of low-cost renewable energy through wind, solar, hybrid, and battery storage systems combined with flexible commercial structures. He also recommended short-term contracts instead of long-term PPAs to help projects withstand volatile market pricing and ensure financial sustainability.

He called for the use of innovative projects and financing models that reduce costs, facilitate risk sharing, and offer the best rate of return for investors. Iyer further highlighted the need to bring new technologies, such as carbon capture, utilisation, and storage (CCUS), to commercial scale by creating financing mechanisms that reduce development risks and improve bankability.

The ITA briefing reflected similar findings, noting that a majority of announced projects have remained at the planning stage for over two years. Progress has been slow, with only one project — AM Green’s 0.5 MTPA green ammonia plant in Kakinada (part of its total announced capacity) — having reached FID. A handful of developers have advanced to the Front-End Engineering Design (FEED) stage but continue to face hurdles such as securing long-term offtake agreements at a green premium, inadequate supporting infrastructure, and complex international regulatory requirements.

Sectoral Targets Signal Growing Momentum

The ITA report revealed that integrated steel producers are targeting a 20–25% emissions reduction by 2030, while major cement manufacturers have adopted near-term Science Based Targets initiative (SBTi) goals and aim for 100% renewable energy use by 2050.

In aluminium, companies have committed to sourcing 25–45% of their electricity from renewables by 2030, with several smelters already partially powered by clean energy through power purchase agreements (PPAs). The aluminium sector has also shown an increasing appetite for renewable energy, with five partially RE-powered smelter projects already operational.

In addition, the aviation sector is witnessing the early stages of decarbonisation, with three commercial-scale sustainable aviation fuel (SAF) projects and over 10 pilot or demonstration projects targeting domestic and export markets.