In December 2024, India made a landmark move toward decarbonising its industrial sector by releasing a national green steel taxonomy. This policy outlines the definitions, standards, and criteria for what qualifies as green steel in India's journey toward net-zero carbon emissions in the steel industry. One of the first companies to align with this effort is ArcelorMittal Nippon Steel India. It has committed to bringing 70% of its steel production under the green steel category by 2027. 

This signals a strong push from the private sector to embrace environmentally sustainable steel production practices in line with the national climate agenda.

But what exactly is green steel, and why does it matter?

Green steel refers to steel that is produced with little or no carbon dioxide (CO2) emissions. Traditional steel manufacturing is one of the most polluting industrial processes in the world. It currently accounts for about 8% of global carbon emissions. Green steel seeks to reduce or eliminate this impact.

There are two primary ways to produce green steel. The first is to use green hydrogen instead of coal in the steelmaking process. This eliminates CO2 emissions if the hydrogen itself is produced from renewable energy. However, sourcing low-carbon hydrogen remains a major challenge, especially in India.

The second and more immediate solution is to use scrap steel. This method involves recycling existing steel products, such as old cars, appliances, or construction materials, to manufacture new steel. By avoiding the carbon-intensive process of converting iron ore into steel, this method offers a practical and scalable pathway to lower emissions.

Why does scrap steel make sense for green steel production in India?

All steel originates from iron ore, and the conversion process emits significant carbon dioxide. However, when steel is recycled, the emissions from the original manufacturing process do not need to be repeated. This makes scrap steel an efficient way to reduce the overall carbon footprint of the steel industry.

Steel is used everywhere, from cars and airplanes to household appliances and kitchenware. In Indian homes, steel is a staple material, which means demand is unlikely to decrease. What needs to change is how we meet that demand.

Recycling scrap steel offers a more scalable and accessible path to sustainability. India’s scrap industry is already worth over $18 billion. If this industry were better organised and supported by clear sourcing mechanisms, it could help meet green steel production goals faster and more effectively.

Importantly, using scrap steel can reduce emissions by up to 87% compared to conventional steelmaking. While it may not completely eliminate emissions, it is a major step toward achieving India's goal of cutting steel industry emissions by 75% by 2027.

Green steel production using scrap also supports the United Nations Sustainable Development Goals. Specifically, it contributes to SDG 13, which focuses on climate action, and SDG 9, which aims to build resilient infrastructure and promote sustainable industrialisation.

The Scrapcart angle

At Scrapcart, we understand the value of scrap, in that it has numerous applications outside of just being wasted material that is dumped into a yard for multiple lobbies to fight over. With the use of scrap steel and ferrous scrap for green steel manufacture and production, it is important for the scrap market to be streamlined, well priced, and well poised to contribute towards these sustainable solutions for the future.