According to the latest report from Global Energy Monitor (GEM), India has overtaken China for the first time to become the leading developer of coal-based steel capacity. This development is concerning, especially when the steel industry should be decarbonising in line with the Paris climate goals. The report highlights that last year, steelmakers increased the construction of coal-based plants by 8 per cent, despite the need to transition to cleaner methods.The report reveals that the capacity for coal-based steelmaking, which follows the 'blast furnace-basic oxygen furnace' production method, rose from 350 million tonnes per annum (mtpa) in 2021 to 380 mtpa in 2022. Most of this coal-based capacity under development is concentrated in Asia (99 per cent), with China and India leading the way, accounting for 79 per cent of these developments. India holds 40 per cent of the coal-based capacity under development, while China is responsible for 39 per cent.This trend poses a significant risk, as the steel industry faces a potential $554 billion stranded asset risk due to increasing coal-based capacity while attempting to meet their carbon neutrality commitments.Although coal-based steelmaking has gradually lost some ground to cleaner production methods in recent years, the shift away from coal is progressing too slowly. Steel producers and consumers need to take more ambitious steps toward decarbonisation. Developers adding coal-based capacity now run the risk of facing substantial financial losses in the future.According to the International Energy Agency (IEA) scenario aiming for net-zero greenhouse gas emissions by 2050, the 'electric arc furnace' capacity should account for 53 per cent of the total capacity. This implies that 347 million tonnes of coal-based capacity would need to be retired or cancelled, while 610 million tonnes of electric arc furnace capacity would need to be added.The GEM report follows the launch of SteelWatch, a global watchdog focused on monitoring carbon emissions from steelmakers. Asia, with 83 per cent of operational blast furnaces, plays a critical role in coal-based steel production. It is crucial for investment decisions in the region to shift rapidly to avoid severe climate consequences. The global market is already undergoing changes with the emergence of new technologies, growing demand for green steel, and the influence of carbon prices. Asian producers now face a pivotal choice between investing in more decades of coal or embracing the steel sector of the future.