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Today, we’ll explore India’s initiative on green steel and the milestones it still needs to achieve on the path to cleaner steelmaking.
Green Steel: India’s Big Step Towards Cleaner Future
What is Green Steel?
There is no universal definition for green steel, but it is generally understood to be the steel produced with almost zero carbon emissions. The traditional steel-making methods depend heavily on fossil fuels and emit a lot of greenhouse gases.
To achieve a zero-carbon footprint in steel making, companies need to adopt new technologies and innovative approach such as:
- Making production more energy efficient.
- Replacing fossil fuels with clean alternatives like hydrogen produced from renewable electricity.
- Using carbon capture and storage technologies to trap harmful gases before they reach the atmosphere.
India Leads the World with First-Ever Green Steel Taxonomy to Cut Emissions
India has taken a historic step in its journey towards cleaner and greener steel production. On 12 December 2024, the country introduced Green Steel Taxonomy. This makes India the first country in the world to set up a clear classification and star-rating system for low-carbon (environment-friendly) steel.
Under this taxonomy, steel can only qualify as green steel for government projects if its carbon emissions are less than 2.2 tonnes of CO₂ per tonne of finished steel (tCO₂e/tfs).
Based on the greenness, the green steel rating are as follows:
- 5-Star Green Steel → Carbon emission less than 1.6 tCO₂e/tfs
- 4-Star Green Steel → Carbon emission between 1.6 – 2.0 tCO₂e/tfs
- 3-Star Green Steel → Carbon emission between 2.0 – 2.2 tCO₂e/tfs
These thresholds will be periodically reviewed and updated every 3 years to match future technologies and policy changes.
Emissions Covered in the Taxonomy
The ministry of steel, through Green Steel Taxonomy, has set some parameters for emission.
- The emission produced inside the plant premises through various activities (from burning fuel for heating furnaces to operating vehicles) involved in steel making will be captured under this taxonomy.
- However, the emission outside the plant boundaries (mining raw materials, downstream uses, or transportation) are not included under this system.
Who Certifies Green Steel?
The government has created a certification system managed by the National Institute of Secondary Steel Technology (NISST), an autonomous body under the Ministry of Steel.
NISST is responsible for:
- Measuring, reporting, and verifying (MRV) the carbon emissions of steel plants,
- Issuing star ratings and green certificates, and
- Maintaining a registry of certified green steel producers.
Why This Taxonomy Matters for India?
Currently, on an average, steel mills in India release about 2.54 tonnes of CO₂ for making one tonne of crude steel (tCO₂/tcs). This is much higher than the global average of 1.91 tCO₂/tcs. In simple terms, India’s steel plants are polluting more than most other countries.
To fix this, the government is pushing industries to use cleaner fuels, adopt new technologies, energy-efficient practices, and make Indian steel products globally competitive. The Green Steel Taxonomy sets a strict target: bring emissions down to 2.2 tCO₂/tcs or lower.
At the same time, leading Indian steel companies are pursuing their own carbon neutrality goals, with plans to reach net-zero emissions by 2050. These efforts support the Indian government’s broader commitment to achieve net-zero carbon emissions by 2070.
Benefits of having star rating certificate
India is gearing up to mandate the use of green-rated steel in central government projects and schemes starting from FY 2027–28. The Ministry of Steel has prepared a draft cabinet note proposing that up to 37% of future steel procurement be reserved for certified green steel.
Procurement targets will vary based on star ratings: at least 20% for 3-star rated steel, 5% for 4-star, and a minimum of 1% for 5-star categories.
Industry experts believe that the initiative will enhance India’s global competitiveness by matching international standards and getting ready for carbon policies like the EU’s Carbon Border Adjustment Mechanism (CBAM). With this push, India is positioning itself as a leader in green steel transformation.
Overall, India’s Green Steel Taxonomy is a world-first framework that not only sets limits on carbon emissions but also rewards cleaner steel production through its star-rating system.
This bold move will make Indian steel more sustainable and globally competitive, while also bringing the country a step closer to its net-zero carbon goal.
