To enhance the industry's environmental sustainability, the Ministry of Steel is preparing a ‘Green Steel Mission’ with an estimated cost of Rs 15000 Crore to help the steel industry reduce carbon emissions. The Mission includes:

(i) PLI Scheme for Green Steel
(ii) Incentives for the use of renewable energy
(iii) Mandates for Government agencies to buy Green Steel

The term “Green Steel” means manufacturing steel without using fossil fuels. This can be done using low-carbon energy sources such as hydrogen, coal gasification, or electricity. It lowers greenhouse gas emissions, cuts costs and improves steel quality. Green Steel can greatly help reduce the steel industry’s carbon footprint. India is currently the world’s 2nd largest producer of crude steel. India is the 2nd largest consumer of finished steel in 2021 (106.23 MT).

The National Green Hydrogen Mission integrates the steel sector into the broader goal of producing and using green hydrogen, contributing to the decarbonisation of steel production. In this regard, a Report on 'Greening the Steel Sector in India: Roadmap and Action Plan' was released in October 2024. Further, the Taxonomy of Green Steel for India was released in December 2024. It provides standards for defining and categorising low-emission steel, a framework for producing green steel, creating a market for green steel, and seeking financial support.

The salient features of green steel taxonomy:

1. “Green Steel” shall be defined in terms of the percentage greenness of the steel produced from the steel plant with CO2 equivalent emission intensity of fewer than 2.2 tonnes of CO2e per tonne of finished steel (tfs). The greenness of the steel shall be expressed as a percentage based on how much the steel plant’s emission intensity is lower compared to the 2.2 t-CO2e/tfs threshold.

2. Based on the greenness, the Green steel shall be rated as follows:

• Five-star green-rated steel: Steel with emission intensity lower than 1.6 t-CO2e/tfs.

• Four-star green-rated steel: Steel with emission intensity between 1.6 and 2.0 t-CO2e/tfs.

• Three-star green-rated steel: Steel with emission intensity between 2.0 and 2.2 t-CO2e/tfs.

Steel with an emission intensity higher than 2.2 t-CO2e/tfs shall not be eligible for a green rating.

3. The threshold limit for defining the star rating of Green Steel shall be reviewed every three years.

4. The scope of emissions shall include Scope 1, Scope 2, and limited Scope 3 up to finished steel production. Scope 3 emissions shall include agglomeration (including sintering, pellet making, coke making), beneficiation, and embodied emissions in purchased raw materials and intermediary products but shall not include upstream mining, downstream emissions and transportation emissions, both within and outside the gates of a steel plant.

Related Government Initiatives Concerning Green Steel:

(i) Steel Scrap Recycling Policy, 2019
(ii) National Green Hydrogen Mission
(iii) Motor Vehicles (Registration and Functions of Vehicles Scrapping Facility) Rules September 2021
(iv) National Solar Mission
(v) Perform, Achieve and Trade (PAT) Scheme
(vi) NEDO Model Projects

 

India is committed to decarbonising the steel sector in alignment with the net-zero emission intensity target by 2070. The Ministry of Steel is working with industry stakeholders to achieve the taxonomy of green steel to reduce the emission intensity of 2.2 tCO2 per tonne by 2030, ensuring global competitiveness and continued growth.