Key Takeaways:

• VSSL is leading the revolution in green steel production in India with its new cutting-edge plant at Ludhiana.​
• VSSL has partnered with Aichi Steel of Japan to provide automotive-grade steel technology and knowledge from world-class experts.
• Features of the facility include advanced automated electrode control, ladle refining, vacuum degassing, and smart monitoring systems.
• The Facility will be compliant with the highest possible standards of ESG, including certifications for ISO9001, ISO 14001, and ISO 45001.
• It will be aligned with important National initiatives such as Net Zero 2070, Make in India, Atmanirbhar Bharat, and Viksit Bharat @2047.
• VSSL has plans to replicate its greenfield model in Gujarat and Maharashtra and is actively pursuing hydrogen-based steelmaking capabilities for its future.

Introduction

India, the second largest steel producer globally, faces the challenge of meeting rising steel demand while complying with national and international climate obligations. Carbon emissions from steel production through traditional methods are high, and the production segment represents a disproportionately large amount of the world's greenhouse emissions. As India's industrial landscape welcomes the introduction of green steel plants, the development is a critical step in changing the landscape of steel production in India.

This case study examines the transformational journey undertaken by Vardhman Special Steels Ltd (VSSL) in the development of its greenfield steel plant in Ludhiana, Punjab. In partnership with Japan's Aichi Steel Corporation, VSSL is making significant breakthroughs in Electric Arc Furnace (EAF) technology, which utilizes renewable energy to produce high-grade steel for the automotive and engineering industries with the smallest possible environmental footprint.

Company Background: Vardhman Special Steels Ltd

Vardhman Special Steels Ltd. is an integral part of the prestigious Vardhman Group and is considered a market leader in textiles and specialty steel manufacturing. Vardhman Special Steels Ltd. was established in 1973, and, over the last several years, VSSL has specialized in alloy and special steels, finding a place in the automotive, engineering, defence, and industrial sectors as an important supplier of alloys and specialty steels.

Vardhman Special Steels, with its reputation for quality, precision, and sustainable production, made a strategic shift in the organization toward the production of environmentally conscious steel for the good of the environment. The Vardhman group was a very early proponent of EAF technology within the 1990s, as well as R&D, and took a major leap toward providing greener products with its green-field (completely new) facility that complied with the latest in global best practices as it relates to clean manufacturing.

Evolution of Steelmaking Technology at VSSL

Vardhman started its modernization process in 1995 by installing a 30-ton Ultra High Power (UHP) Electric Arc Furnace. This technology represented a substantial increase in performance, with shorter molten-cycle times, lower overall energy use, and 100% steel scrap feedstock. The UHP EAF had a higher transformer capacity (70–80 MVA) and specific power of 520–600 kVA/ton, making it a considerably cleaner process than a conventional blast furnace.

Over the years, VSSL invested in a series of technological upgrades. Automatic electrode regulation systems improved power efficiency and arc stability, while oxygen injection through lance manipulators enhanced combustion. Lime feeding systems and Celox oxygen monitoring allowed better slag control and melting chemistry. Ladle refining furnaces (LRFs) and vacuum degassing (VD) units improved the purity of the steel and accurately controlled carbon and gas concentrations in the molten steel.

In addition to the improved quality of steel, ladle processing has reduced tap-to-tap time, energy, and electrode wear, which will ultimately lead to a fully sustainable production model.

Key Milestones of VSSL:

The 2025 Ludhiana Greenfield Project

VSSL embarked on its boldest project thus far in 2025, a ₹2,500 crore greenfield special steel plant in Ludhiana, Punjab, in collaboration with Aichi Steel Corporation of Japan. The plant’s installed capacity is 5 lakh tonnes per annum, and was built for the high-performance requirements of the automotive industry in India and other parts of the world.

One major differentiator from other projects is the high level of commitment to sustainability and care for the environment. The plant combines cutting-edge Electric Arc Furnace (EAF) technology, a ₹500 crore solar power plant, dust and fume extraction systems, and follows a Toyota Way layout, which supports productivity, safety, and lean practices throughout the facility.

Partnership with Aichi Steel Corporation

A strategic partnership with Aichi Steel Corporation, a global leader in specialty steels and a primary supplier to Toyota Motor Corp, has been a key rationale in this transition. Aichi Steel's relationship provides VSSL with access to leading automotive-grade steel technology, research and development knowledge, and operational experience.

Aichi's input ensures VSSL meets global standards of quality and maximum quality manufacturing, while supporting India's Make in India initiative. The partnership provides for regular on-site technical training, technology transfer, and a long-term strategy toward steel innovation in India.

Green Technologies at the Ludhiana Plant

The Ludhiana greenfield plant incorporates some of the most advanced steel production technologies in India. At its core is the Ultra High Power Electric Arc Furnace, capable of melting 100% scrap with superior energy efficiency.

The EAF setup includes:

• Automated electrode regulation for stable and optimized arc usage

• Lance manipulators for precise injection of oxygen and other inputs

• Oxy-fuel burners to increase the melting rate and reduce the electric load

• Celox technology for real-time oxygen monitoring and process control

• Ladle Refining Furnaces (LRF) for post-melt refinement

• Vacuum Degassing (VD) with mechanical pumps for gas removal without using water or steam

• Secondary fume extraction systems to ensure a clean, safe workplace

Together, these technologies reduce emissions, improve product quality, and cut energy consumption to just 320–350 kWh per tonne, nearly half the energy required in older EAF systems.

Renewable Energy Integration

In order to reduce its reliance on fossil fuels, VSSL has constructed a 100 MW solar power plant at ₹500 crore to meet the energy needs of the Ludhiana facility. This investment greatly reduces the carbon footprint of the plant while also stabilizing energy costs over time.

When you combine solar power with energy-efficient infrastructure, in this case smart grid systems, heat recovery units, and low-energy lights throughout the facility, things really start to come together. The plant also benefits from subsidies from central and state governments as part of the renewable energy subsidies, providing it with both economic viability and an environmentally friendly response.

Local Supply Chain and Economic Impact

The Ludhiana facility is going to support localization and local economic development. By sourcing steel scrap and other inputs locally, VSSL will lower travel emissions and create connectivity with ancillary industries.

This project is projected to generate 1,500 jobs directly and several thousand indirectly through neighbouring allied industries, such as transport, equipment maintenance, packaging, and raw material processing. The company is also offering programs for local skill development through training for vocational skills related to modern steelmaking operations.

Environmental and Social Governance (ESG)

Across its activities, VSSL embeds strong Environmental, Social, and Governance (ESG) practices. The facility has a zero-liquid discharge wastewater system, emissions are monitored live, and the facility has a dust capture system. VSSL abides by national standards and is accredited with ISO 14001 (environment), ISO 9001 (quality), and ISO 45001 (health and safety) certifications.

In the social arena, VSSL is engaged in community development and involvement in Ludhiana around education, skills, and health services. The governance function emphasizes transparency in ethical sourcing and supplying of products with digital traceability in the supply chain at all levels.

Policy Alignment

The project aligns with multiple government frameworks, including:

• National Steel Policy 2017 – Encouraging secondary steelmaking and sustainability

• PLI Scheme for Specialty Steel – Supporting domestic value addition

• Punjab Industrial and Business Policy – Offering incentives for greenfield investments

• Renewable Energy Policies – Supporting solar energy use through financial benefits

By aligning with these policies, VSSL leverages both public support and private innovation to lead the clean steel transition in India.

Innovation and R&D

VSSL has optimised production operations using process simulation labs, harnessed data for furnace optimisation and setup, and is using AI for quality control. All of this aims to eliminate any mistakes, reduce variation, reduce to clean processing time, and improve consistency across each production batch.

Alignment with India’s National Vision: Viksit Bharat, Net Zero, and Beyond

Vardhman Special Steels’ greenfield project in Ludhiana is not only a milestone for the company, but also a significant case of industrial development that will support and directly contribute to the national development objectives for India over the long term. With sustainable steel-making technologies, reliance on renewables, and localised community economic uplift, the project supports many of the national objectives:

a. Viksit Bharat @2047 (Developed India Vision)

India's aspirations for 2047, the one hundredth anniversary of independence, are a developed, inclusive, and sustainable economy. Vardhman's world-class Ludhiana plant participates in:

• Promoting advanced manufacturing using global best practices (e.g., Toyota layout, Japanese technology from Aichi Steel).

• Strengthening technological self-reliance via indigenous specifications of special and alloy steels, which were previously imported.

• Generating over 1,500 direct jobs and transforming the regional industrial ecosystem in Punjab, and bolstering local economies.

With these outputs, Vardhman demonstrates the Viksit Bharat vision of innovation-led, sustainable, and inclusive growth.

b. Net Zero Emissions by 2070

Achieving net-zero carbon emissions by 2070 as part of India’s commitment to the Paris Agreement entails transformations of certain sectors, particularly high-emissions sectors like steel. The Ludhiana project is key because it has:

• EAF (Electric Arc Furnace) technology with significantly lower CO₂ emissions than blast furnaces.
• A ₹500 crore solar power plant that produces renewable energy and allows all steel operations to be powered by renewable energy, and reduces dependence on fossil fuels.
• Closed-loop water systems, dust suppression, and zero-liquid discharge systems that reduce not only emissions but also resources used for steel production.

This reinforces India’s journey toward green industrialization, producing more with less carbon.

c. Atmanirbhar Bharat (Self-Reliant India)

Vardhman's establishment of an automotive-grade special steel production capability within India with Aichi Steel reduces reliance on imports, while improving India's ability to manufacture to global standards domestically as part of the Atmanirbhar Bharat mission's contributions, which aims to:

• Provide technology transfer and innovation through collaboration on a global scale.
• Develop high-value manufacturing capabilities.
• Employ resilient local supply chains for critical materials.

The project adds to the steel sector's independence, a significant component of India's broader approach to self-sufficiency in industry.

d. Make in India & Production-Linked Incentives (PLI)

The project aligns with the Make in India objectives of transforming India into a manufacturing hub for high-grade, green steel, and paves the way for qualifying under the PLI incentives for Specialty Steel by supporting investment in value-added steel products.

e. Panchamrit Commitments at COP26

As part of Indian Prime Minister Modi's five-point climate commitment (Panchamrit) at COP26, he committed to generating 500 GW of non-fossil energy capacity, achieving a 33-35% reduction of carbon intensity, and getting to net zero by 2070. Vardhman, by producing clean steel from solar energy, helps fulfill these commitments and can be a model for decarbonizing heavy industry in India.

Future Outlook

Vardhman Special Steels Ltd plans to take the country forward by increasing its production capacity to double the sustainable steel by 2030. It is pursuing hydrogen-based steel manufacturing and will continue to transform methods to reduce its carbon footprint. The company plans to duplicate this greenfield plant in Gujarat and Maharashtra and sustainably expand its footprint further at the same time as maintaining its sustainable steel industry leadership.

The Ludhiana greenfield plant is a milestone for achieving low/emission, high-efficiency steel manufacturing in India.  Vardhman has set a new industry standard through the integration of Electric Arc Furnace technology, renewable energy, Japanese know-how engineering, and the circular economy model.

This case study captures the way that visionary planning, global partnerships, and operational sustainability can lead to a transformation in heavy industries for a cleaner, more resilient future. Vardhman's approach is scalable and replicable for existing steel manufacturers seeking to transition to green steel while being cost-competitive.