Focus on Arts and Ecology

Policymakers are looking beyond industrial upgrades, and could create favourable conditions for newer, greener steelmaking routes. 

By Shen Xinyi, June 17, 2026

China’s industry ministry has revealed new rules on replacing steel production capacity. The changes, which end a nearly two-year suspension of new approvals, represent the most significant overhaul of the policy since 2021.

National steel policy has, since 2014, sought to control overall capacity and encourage upgrades by requiring the retirement of older capacity before new facilities can be built.

The revised measures, announced on 18 May, mean even more capacity must be retired before new capacity is added. They also tighten eligibility requirements and place new restrictions on the use of dormant capacity.

The changes come at a pivotal moment for China’s steel industry. After a decade of restructuring and upgrading, the sector is facing slower demand growth, weak profitability and mounting pressure to reduce emissions. Steelmaking remains responsible for around 16% of national carbon emissions and is one of the toughest industries to decarbonise.

The latest reforms, therefore, raise a broader question: can a policy originally designed to manage capacity also help accelerate the steel sector’s low-carbon transition?

A decade of steel policy evolution

China’s capacity replacement has evolved over the past decade from a mechanism to manage industrial capacity into a broader policy tool supporting industrial upgrade, environmental improvement, and, increasingly, decarbonisation.

The mechanism emerged from two major policy priorities that took shape in 2013. That is, efforts to tackle severe industrial overcapacity and a growing national campaign to improve air quality.

When the first steel capacity replacement rules were introduced, in 2014, they required an amount of existing capacity – ideally older and more polluting assets – to be shuttered before new capacity could be built. In key air-pollution control regions, the ratio was 1.25 tonnes retired for every 1 tonne added. Everywhere else it was 1:1.

Over the following decade, the policy evolved alongside China’s environmental and climate ambitions. The 2017 revision, for the first time, introduced preferential treatment for replacements with electric arc furnace (EAF) steelmaking. These are less polluting and less carbon-intensive than the blast furnace-basic oxygen furnace (BF-BOF) route, which today still accounts for around 90% of Chinese steel production.

Following China’s 2020 pledge to peak its carbon emissions before 2030 and be carbon neutral before 2060, the 2021 revision incorporated more explicit climate objectives. It further tightened replacement requirements in an expanded group of air-pollution control regions. It also included even stronger support for EAF steelmaking and emerging low-carbon technologies, such as hydrogen-based steelmaking.

The latest 2026 revision goes further still. It generally requires 1.5 tonnes of existing capacity to be retired before a tonne of new capacity can proceed, up from 1.25. It excludes the counting of long-idled capacity as a replaceable asset; restricts the transfer and trading of capacity quotas across regions and companies; and provides more explicit support for EAF and hydrogen-based steelmaking. These changes reflect growing concerns about the quality and credibility of capacity reduction, as well as the need to create space for lower-carbon steelmaking.

The evolution of approved projects under the capacity replacement mechanism illustrates both the policy’s achievements and its limitations. Between 2017 and 2024, approved replacement plans included approximately 400 million tonnes of new blast furnace capacity, 318 million tonnes of new BOF capacity and 128 million tonnes of new EAF capacity. Although the share of EAF projects increased over time, BF-BOF projects continued to dominate approved capacity additions. This shows the continued dominance of coal-based production.

Approval volumes declined significantly after peaking in 2017-2019, reflecting weaker steel demand, tighter regulatory controls and the completion of a major cycle of capacity renewal. The suspension of new capacity replacement approvals in August 2024 further contributed to the exceptionally low approval volumes recorded that year.

At the same time, the composition of new projects gradually shifted. Following China’s carbon peaking and neutrality pledges, EAF projects accounted for a growing share of approved steelmaking capacity, while a small number of hydrogen-based and other non-blast-furnace technologies also began to emerge.

Yet the policy’s contribution to decarbonisation remained more limited than its role in modernising production assets. This distinction, between industrial upgrading and decarbonisation, lies at the heart of the debate over the capacity replacement policy.

Upgrades did not equal decarbonisation

Why didn’t the gradual greening of the capacity replacement policy translate into deep emissions reductions? The impact was constrained by the structure of China’s steel industry and the incentives facing policymakers and producers.

Most new capacity launched since the policy’s inception has continued to rely on the blast furnace-BOF route. Although newer facilities are generally more energy efficient and less polluting than what they replace, they still depend heavily on coal. Replacing an older blast furnace with a newer one can reduce emissions intensity, but it does little to reduce dependence on coal.

A second challenge lies in the relationship between capacity and output. Some replacement projects retired facilities that had been underused, or even idle for years. Newer plants were often more productive than the assets they replaced. Therefore nominal capacity reductions did not always translate into lower production or emissions.

The policy also reflected competing priorities among stakeholders. While the central government increasingly viewed capacity replacement as a tool for pollution control and decarbonisation, local governments often prioritised investment and employment. Meanwhile, steel companies focused on maintaining competitiveness. These incentives were aligned around industrial upgrading but were less consistent in permanently retiring capacity or accelerating the deployment of low-carbon technologies.

As a result, capacity replacement proved more effective at modernising facilities than did driving structural decarbonisation.

Why were the rules tightened in 2026?

The 2026 revision, issued after a nearly two-year suspension of new approvals, reflects both lessons from a decade of policy implementation and the changing realities facing China’s steel industry.

After a decade of restructuring and upgrading, the sector is entering a period of weakening demand, thin margins, and rising trade frictions linked to record-high steel exports. At the same time, pressure to reduce carbon emissions continues to grow as China advances its climate commitments.

In this new environment, policymakers are increasingly concerned not only with how capacity is upgraded, but also with whether existing capacity can exit the system in a credible and orderly way.

One priority for the policy’s revision was to improve the credibility of capacity reduction. As well as upping the standard capacity replacement ratio to 1:1.5, the new rules also exclude long-idled facilities from replacement calculations; it has become harder for companies to use inactive assets to secure approvals.

The revised framework also tightens restrictions on the buying and selling of retirement quotas between regions and companies. This is to prevent replacement quotas becoming detached from actual production activity, and to ensure capacity exits are genuine rather than merely administrative.

At the same time, the 2026 policy provides more explicit support for lower-carbon technologies, offering clearer guidance for hydrogen-based steelmaking technologies. This reflects recent industrial experience: over the past three years, large-scale hydrogen metallurgy projects have moved beyond the pilot stage and begun generating operational experience. These include Baowu’s demonstration project in Zhanjiang, Guangdong province, and HBIS’s Zhangxuan project in Hebei province.

It remains too early to assess how far the new rules will reshape investment decisions. While the revised policy sends a clearer signal of support for deploying lower-carbon technologies, new investment in ironmaking and steelmaking remains subdued amid weak market conditions.

Nearly a month after the revised rules came into effect, no entirely new capacity replacement plans have been announced. The only one so far was issued by Shandong’s provincial industry authority. It is related to a project that had already completed public consultation before approvals were suspended in 2024 and is now progressing through the final stages of the administrative process.

Likewise, new project activity remains limited. Apart from a new EAF project in Yunnan province, which began construction in March, few new ironmaking or steelmaking production projects have broken ground so far in 2026.

Can new rules accelerate steel decarbonisation?

The revised capacity replacement framework could help create more favourable conditions for steel decarbonisation.

The tightened capacity-reduction requirements and restricted eligibility of idle assets make it more difficult for high-carbon capacity to remain in the system indefinitely. Clearer support for EAF and hydrogen-based steelmaking also sends a stronger signal about the direction of future investment.

Yet capacity policy alone is unlikely to drive a rapid transition. The steel sector continues to face weak demand, low profitability and uncertainty over future investment returns. Low-carbon technologies remain more expensive than conventional options, while demand for green steel is still limited.

This helps explain why progress has been slower than policymakers had initially hoped. Despite years of policy support, EAF steel’s share of crude steel production has remained around 10% in recent years, well below the 15% target set for 2025. The challenge is no longer simply technological, but increasingly one of economic viability and scale.

China has already introduced hydrogen development strategies and policies to encourage its use in industries, including steelmaking. Although large-scale deployment remains in its early stages, the projects led by Baowu and HBIS are in operation, while a growing number of pilot and demonstration projects are exploring different hydrogen-based steelmaking pathways.

Ultimately, capacity replacement is likely to play a supporting rather than decisive role in the sector’s transition. The expansion of China’s national carbon market, the development of green steel standards and certification systems, and new efforts to green industrial supply chains may prove just as important in creating demand for green steel.

In 2025, China’s State-owned Assets Supervision and Administration Commission (SASAC) issued guidelines encouraging central-state-owned enterprises to build green and low-carbon supply chains. Such green procurement can help reduce the commercial risks associated with low-carbon investments by providing more stable demand signals for suppliers, including steel producers, as Yang Li of the Institute for Global Decarbonization Progress, a Beijing-based think-tank, recently observed.

Viewed in this context, the 2026 reforms are best understood not as a standalone solution, but as part of a broader shift in China’s steel transition. Research estimates that around 350 million tonnes of blast furnace capacity may need to be retired by 2030 to support the sector’s decarbonisation pathway. Whether that transition can be achieved will depend not only on stricter capacity management but also on the development of technologies, markets and policy incentives that enable lower-carbon steelmaking to scale.

Shen Xinyi

The 2025 surge is less a return to resource-buying than a shift towards construction-led industrial infrastructure and selective financing. 

By Betty Wang, June 16, 2026

In 2025, China’s engagement in countries signed up to the Belt and Road reached its highest level since the initiative’s launch, driven by a sharp uptick in oil and gas deals.

Energy engagement, including both investment and construction contracts, reached USD 93.9 billion last year – more than double that of 2024, according to a report by the Green Finance and Development Center. Oil and gas alone accounted for roughly USD 71.5 billion of the total, tripling previous records and making up 74% of overseas energy engagement, the highest fossil-fuel share since 2014.

While this macro-data appears to signal a major return to oil and gas, a closer look reveals a more nuanced structural shift. In harmony with host government goals, Chinese firms are trying to capture more value from energy resources, spanning production, processing and power infrastructure. Rather than simply securing direct equity stakes in oil and gas fields, they are leveraging service-driven engineering, procurement and construction (EPC) models, in which a single contractor has total responsibility for a project.

Yet this shift leaves a significant question mark over the future. It remains to be seen whether the long-lived, carbon-intensive assets that formed much of China’s energy engagement last year can ultimately survive tightening global environmental regulations, changing trade rules and localised governance challenges.

Megadeals in Nigeria and Congo

The 2025 figures do not signal a broad, high-volume wave of new oil and gas projects. Instead, the boom was highly concentrated, with two deals accounting for about 60% of the USD 71.5 billion total: the Ogidigben industrial park in Nigeria, and oil and gas development in the Republic of the Congo.

The USD 20 billion Ogidigben project is planned to involve gas processing and supporting infrastructure, power generation, aluminium smelting and the production of fertiliser, petrochemicals and methanol. China National Chemical Engineering International Corporation’s role in the project is tied to development, financing and construction, rather than acquiring an equity stake in upstream assets.

Meanwhile, the Republic of the Congo signed a USD 23 billion agreement with China’s Wing Wah to develop the Banga Kayo, Holmoni and Cayo oil and gas permits, including onshore fields and associated production infrastructure. While anchored in upstream oil and gas production, it incorporates processing infrastructure for LPG (liquid petroleum gas), butane, propane, LNG (liquefied natural gas), on-site power generation and water management systems. It is not clear where the outputs will be sold, though Congo’s oil sector is already export-oriented, with China among its major markets.

The commercial logic for Chinese firms is not simply to secure hydrocarbons for domestic use as fuels and feedstocks. It is also to build infrastructure, sell equipment and engineering services, and participate in a long-term project cycle that aligns with host-country priorities, such as Nigeria’s ambition to use gas for domestic industrial development.

Divers and shifting financial models

One reason these projects are moving forward now is demand from host countries, which takes different forms.

In Nigeria, the logic is primarily downstream industrialisation: gas is not only treated as an export commodity, but as a feedstock for fertilisers, petrochemicals, power generation and industrial production. In Congo, the Wing Wah agreement is more directly tied to upstream oil and gas production, while also including gas-based derivatives intended for both domestic use and exports. In both contexts, Chinese companies can offer something that is politically attractive: not just capital, but an integrated package of EPC, equipment and project delivery.

Across the BRI, construction contracts accounted for about 60% of Chinese engagement in 2025, compared with about 40% for investment, according to the report. The pattern was even more pronounced in energy, where construction deals made up around 80% of engagement. Within oil and gas, the picture is not uniform: major investments remain, but gas-related activity was largely construction-based, with no gas-related equity investments identified. This indicates that in the 2025 surge, Chinese firms were prioritising service delivery – such as construction, equipment supply and financing – while choosing carefully when to take on the risks of owning a share of the oil or gas itself.

This project-delivery model is highly relevant as western public-finance institutions and export credit agencies have tightened restrictions on fossil-fuel projects. The Clean Energy Transition Partnership, launched at the COP26 climate conference in 2021, commits signatories to end new direct public support for the international unabated fossil-fuel energy sector, except in limited circumstances consistent with the Paris Agreement. That, in turn, has helped create space for actors outside this sphere willing to provide project delivery, equipment and financing.

But it does not mean western capital has disappeared from oil and gas. Western companies remain active, especially in offshore and integrated gas segments where they see stronger strategic or commercial fit. When Shell, for example, completed the sale of its Nigerian onshore subsidiary in 2025, it said the move would help focus its Nigerian portfolio on deepwater and integrated gas positions.

Western capital’s appetite for large, politically complex, or risky onshore fossil-fuel infrastructure has, however, narrowed. Chinese firms are well positioned to operate in this space given their experience in EPC, equipment supply and large-scale project delivery. State-owned enterprises tend to be more active in construction-oriented engagement, while private firms appear more likely to take direct investment exposure in selected cases, the report notes. This allows Chinese firms to capture returns through service contracts and project delivery, while taking full ownership or direct resource exposure more selectively.

The BRI financial model has evolved. The early era of large, sovereign-backed loans has given way to a more constrained environment due to host-country debt pressures and a more cautious Beijing. The current model is more selective; in some cases, risks are shifted toward project revenues, private developers, resource-backed arrangements or local partners, notes Yan Liang, senior fellow at Boston University’s Global China Initiative.

Emerging regulatory and trade challenges

For host countries, gas-based industrial projects can offer a clear development case. They can support fertiliser production, power supply and local manufacturing, while reducing dependence on imported industrial inputs. This is why they can often retain domestic political appeal even as international climate finance moves away from fossil fuels.

However, these enduring, carbon-intensive assets face shifting trade and regulatory environments. The European Union’s Carbon Border Adjustment Mechanism (CBAM), an import tax on goods with a large carbon footprint, entered its definitive period in 2026, directly affecting commodities like fertiliser and aluminium. If projects such as Ogidigben produce goods that fall under CBAM’s scope and seek access to European markets, carbon intensity could become a trade-competitiveness issue. Over time, carbon-related border measures and buyer standards may influence market choices, potentially pushing exports towards destinations with fewer carbon-related border costs.

China’s own trade policy could reinforce that possibility. In May, China expanded zero-tariff coverage to the 53 African countries with which it maintains diplomatic relations. For producers facing tighter access to European markets, China could therefore become an even more important destination.

Additionally, localised environmental governance remains a critical issue. Large gas, petrochemical and oil projects require strong regulation on emissions, water use, methane leakage, pollution control, land use and community impacts. In countries where regulatory capacity is limited, the risks are not only climate-related but also local. Pollution, weak disclosure, uneven benefit-sharing and long-term liabilities may outlast the original political enthusiasm for these projects.

While the scale of 2025, with its rare megadeals, is unlikely to be repeated, the underlying pattern will persist: Chinese firms may continue to pursue oil and gas projects where host-country industrialisation plans, project-level returns and risk-sharing structures make them commercially attractive.  

Last year’s surge represents an evolution toward a more diversified model that integrates fossil resources with local industrial infrastructure. Its ultimate success depends on whether it can deliver genuine developmental gains without burdening host nations with opaque financing and obsolete, high-emission assets. That is the central tension in China’s new overseas oil and gas push: it may help build the industrial systems host countries want, but may also lock them into assets whose economic and environmental future is increasingly uncertain.

Betty Wang

Across the Americas soaring temperatures are endangering thousands of children and teenagers lacing their boots to play the beautiful game. 

By Maximiliano Manzoni, February 5, 2026

It was 33C when, during a day of trials for Paraguay’s Cerro Porteño youth team, a 16-year-old collapsed. He was one of hundreds who had arrived on 21 November 2025, dreaming of playing for one of the country’s most popular sports institutions. He suffered a cardiac arrest and had to be saved by the club’s medical staff.

Uruguayan writer Eduardo Galeano called football, not only the most popular sport in the world, but “the music of the body, the festival of the eyes”. It is a beloved hobby of hundreds of thousands of children and teenagers worldwide.

But extreme heat is putting their well-being at risk. Researchers, coaches and scientists are now racing to find solutions, ranging from early warnings and awareness campaigns to banning synthetic pitches that trap heat.

Heat in the home of the world champions

The adult game is also struggling with heat. High temperatures in the United States for the 2024 Copa America forced the South American Football Confederation (Conmebol) to redraw its protocol for medical staff.

A report published last year by Football for Future warned that 14 of the 16 stadiums due to host games at this year’s men’s World Cup in Mexico, Canada and the US exceed “safe-play thresholds” for climate hazards, including extreme heat.

But children are known to be more vulnerable to heat than adults. In 2023, all summer youth sports matches in Paraguay were suspended between 10am and 5pm due to high temperatures. In Argentina, several local leagues made similar decisions, postponing games due to the heat.

The suspensions in these two countries occurred during a heatwave made 60 times more likely by climate change. One of the places affected was the city of Rosario in Argentina, home to a club where two world champions, Diego Maradona and Lionel Messi, played: Newell’s Old Boys.

The coordinator of Newell’s youth divisions, Gustavo Tognarelli, believes the impact of heat “is not yet on the agenda in our institutions” and more clubs need to take it seriously. Tognarelli oversees more than 400 children and adolescents playing for the club and says that the summer heat in Argentina is “difficult”.

According to the latest Lancet Countdown report, the Latin American region has experienced an increase of hundreds of hours per year, as compared to 1991-2000, during which walking and running pose a health risk.

“The impact is noticeable in training. It’s not the same for a child who trains at eight in the morning as it is for another who trains at ten,” Tognarelli told Dialogue Earth.

The recent trend towards synthetic turf pitches has complicated things, he says. They hold up better on rainy days, but “generate much more heat on the pitch”.

Iván Vázquez, director of the youth divisions at Club Olimpia in Paraguay, is even more emphatic: “Synthetic turf pitches should be banned here. The temperatures can hurt the children’s feet, causing burns when they fall.”

In addition to training, a constant challenge for youth teams is children having to play on the same day on the same pitch due to infrastructure and transport issues. This can necessitate some children playing during the hottest part of the day, creating problems for complying with guidance on heat exposure put out by health officials and football federations.

Ariel Ramírez, media coordinator for Conmebol, which governs professional football of all ages in South America, says it “controls high temperatures in its tournaments through strict medical protocols that include monitoring humidity and ambient temperature with specialised equipment”.

Drinks breaks are mandatory above certain temperatures, along with pre-match medical examinations, acclimatisation and education on heatstroke. This protocol also applies to youth tournaments. It was in force when the 16-year-old collapsed in Paraguay last November. But application can be patchy. A 2018 study warned that ambulances were consistently absent during training sessions and youth matches in Paraguay’s local leagues.

Children at risk

Conmebol originally developed its protocol for the 2016 Copa América in the United States.

Successive football tournaments in the Americas have drawn criticism for their approach to extreme heat. The organisation had to update and broaden its protocol for the 2024 Copa América, also in the US, in response to growing evidence on the impact of playing in summer conditions. Despite the new protocol, a referee collapsed in that tournament during one of the nine matches played in dangerously hot conditions.

Gregory Wellenius, a researcher on climate change and environmental health at Boston University School of Public Health, points out that in youth football, the challenge goes beyond having protocols, controlling schedules and playing surfaces.

Cities such as Boston, which will host games at the next World Cup, have protocols and alerts for extreme-heat situations. But these are “designed for the general population” and “certainly not children and young footballers”, he says.

“Children are not small adults; they are thermodynamically different. They sweat differently, and sweating is the mechanism humans have to cool the body,” Wellenius explains.

Places that historically did not have high temperatures face greater problems in adapting their infrastructure, Wellenius says. “What may be common in Houston or Central America is not so common in cities like Boston, which used to be cooler and now experiences heat waves.”

In addition to physiology and infrastructure, Wellenius believes it is essential to remember that children are also “less likely to know when to stop” when they get too hot in competitive environments.

The full impact of heat on children and adolescents is still unknown. “We don’t really know the long-term impact of exposure to extreme heat on children,” says the researcher. “What happens to their bodies if they are constantly under pressure from high temperatures?”

Adapting at home – and in the stands

Philip Jenkins, one of the lead authors of the Football for Future report on the perils of the coming World Cup, says: “Our analysis shows that by 2050, extreme heat in stadiums will become the new normal, with almost 90% needing to adapt to cope.” The report focussed on stadiums hosting this and the next two World Cups as well as grassroots stadiums linked to World Cup legends, such as those where Lionel Messi and Pelé began their careers. In some of these stadiums, football matches and training will be severely disrupted by extreme temperatures by 2050, for as many as two months per year, the report found.

Faced with this “new normal”, coaches and researchers say there is no silver-bullet solution.

Cooling breaks and leaving behind synthetic turf pitches in favour of natural grass could help. But more broadly “the region needs to develop early-warning systems for extreme heat” says Francisco Chesini, a public health researcher at the University of Buenos Aires and part of the Global Heat Health Information Network.

Such systems are already implemented in countries including Spain, where local-level forecasts and temperature thresholds trigger a comprehensive response from authorities and health officials. The United Nations launched an initiative in 2022 for a worldwide adoption of early-warning systems by the end of 2027. Paraguay already aims to develop one as part of its climate policy, pending funding.

“There is still a long way to go to raise awareness of the need to invest in infrastructure,” says Tognarelli.

But, he adds, “It is an investment, not an expense. Our role must be to protect and provide comprehensive training for these children.”

Wellenius says adapting is not about eliminating risks but about empowering people to make informed decisions. There is an untapped opportunity, he says, to use football communities not only to protect children and adolescents in sport, but also to advance understanding and the need for public policies on heat. 

“People know that heat is a problem, but they don’t think it’s their problem,” he says, “It is not enough to issue general alerts in the media or on social networks in the event of extreme temperatures. This information must be strategically communicated to those who have the trust of others in these communities, such as mothers and coaches.”

As well as the music of the body and the festival of the eyes, football may also have the power to change minds on climate risks and the need for action.

City policies should stress practical outcomes and lower electricity bills rather than emission reductions, say Zubair Shaikh and Shravya Garuda. 

By Zubair Shaikh, Shravya Garuda, March 26, 2026

Sometimes called an invisible disaster, extreme heat is increasingly affecting how people live in Indian cities.

About 57% of Indian districts, home to over three-quarters of the population, are now considered at high to very high risk. Urban populations are particularly exposed due to the urban heat island effect which makes cities hotter than the nearby countryside.

For many households, living conditions exacerbate heat. Asbestos roofs, poor ventilation and overcrowding increase indoor temperatures. While outside, there may by a lack of access to shade or open spaces. Health consequences and deaths are rising as climate change drives temperatures up.

But talk of emissions reduction often does little to motivate change. We need to talk about adaptation with a different emphasis. For policymakers, the goal may be saving lives or reducing emissions. But for someone buying an air conditioner (AC), the priority is usually comfort and cost.

Fixing the buildings

The urban residents who are contributing most to heat islands are those who have access to ACs, refrigerators and other household devices. Often, they are not cooling themselves in efficient ways.

Today, the dominant solution is individual ACs. Costs and emissions can be cut through systems that serve entire buildings or clusters, such as heating, ventilation and air conditioning (HVAC) and district cooling systems. But these are capital-intensive, requiring upfront investment at the construction stage. In India as elsewhere, developers want to sell fast and exit.

In commercial buildings, energy efficiency has gained traction because high-value corporate tenants now demand it. But in residential buildings, buyers tend to focus on price and location, and energy efficiency is rarely on the checklist. Developers have little incentive to absorb higher upfront costs.

When consumers understand long-term savings, they begin to demand efficiency. That can push developers toward better cooling solutions.

India’s ongoing greenfield development offers a window of opportunity. The country is expected to add millions of square footage of built-up area in the next few years, with developers such as Prestige, Hiranandani and Puravankara working on projects ranging from semi-affordable for the middle class to ultra luxury.

Seeking solutions

Though it’s not perfect, retrofitting for efficiency can also provide benefits. Significant improvements can be made by using appliances with higher ratings for energy efficiency, integrating renewables like rooftop solar, and replacing conventional fans with brushless versions which reduce waste heat.

In some cities, if energy-efficiency measures are implemented in residential developments and quantified, housing societies can receive property tax rebates and residents in turn get reduced electricity bills. Even simple steps, like motion-sensor lighting in parking areas and communal toilets, can generate noticeable savings.

In Hyderabad and Chennai, some residential projects have installed central chiller systems. Back in 2015, developers of a Hyderabad residential society piloted a community cooling plant, avoiding the need for individual AC units on exterior walls. Flat owners were initially hesitant, but agreed to adopt the system, and cooling bills have remained stable for nearly a decade.

This was a collective win-win. Real savings drive adoption.

A dedicated department for energy-efficient cooling within the Bureau of Energy Efficiency could further accelerate change.

Not forgetting the most vulnerable

For vulnerable communities facing extreme heat, there remain very limited solutions. Their contribution to emissions is only a fraction of the total, yet they are often the ones who suffer the most from surging temperatures.

Most people in low-income settlements must rent. Because they don’t own their homes, they have no ability to change them, which means no ability to alter windows or doors and install ventilation systems to improve thermal comfort.

They also face cramped living conditions. In the greater Mumbai city of Mira Bhayandar, up to eight people often live in 150 to 200 square feet spaces – equivalent to a small studio apartment – with low ceilings. Fans may not provide enough relief in such circumstances, and many people end up going to gardens or sitting under trees to rest as indoor conditions become unbearable.

Parts of Tamil Nadu and Kerala have piloted the use of passive cooling measures such as coir roofing systems and cooling paint, with good results. But in large cities such as Mumbai, slums are densely populated, with houses built informally, meaning most retrofitting is a challenge. Homes in some slum areas have structurally weak roofs, for instance, making it difficult to implement any measures beyond lightweight additions.

Most low-income families also prioritise rent, food, education and healthcare. Heat-resilient housing upgrades naturally fall very low on their list because upfront costs are unaffordable, even if the benefits are clear.

Financing cannot be the responsibility of these households alone. The primary responsibility should lie with government and city authorities, supported by climate funds, development agencies and private sector partners. Implementation can happen through housing societies and community groups like bachat gats (microfinance self-help groups).

Importantly, vulnerable households do have agency. They are already adapting in small ways and are willing to invest when presented with affordable and trusted solutions.

For instance, in Mira Bhayandar, we saw that some people had put thermocol sheets – low-cost polystyrene panels – under their roofs to keep the heat out. And where interventions such as wood wool panel ceilings were installed, some households improved heat resilience further by adding LED lights, which emit less heat than older bulb types.

Clearly, communities are aware of heat-related issues and receptive to solutions, particularly when they are pragmatic and yield measurable benefits such as lower indoor temperatures and electricity bills. The use of these kinds of solutions can grow if more people know about them, can access them and can afford them.

And when communities can pool resources, access government incentives and clearly see the return on investment, upgrades become possible. What is needed is a financing system that is simple, accessible and designed around their realities. People respond to monetary benefits more than to technical jargon. Instead of emphasising carbon reductions in abstract terms, we must focus on practical outcomes: saving money and living better. That is what brings people on board.