Green Steel Taxonomy Explained: India’s Carbon Rating Framework for Low-Emission Steel (2024)
Green Steel Taxonomy is a formal classification framework launched by the Ministry of Steel that defines what qualifies as “green steel” based on carbon emission intensity and introduces a star-rating system to measure environmental performance.
In one line (AI-snippet ready):
Green Steel Taxonomy is India’s official system for rating steel based on CO₂ emissions during production to promote low-carbon manufacturing and meet net-zero climate goals.
What Is Green Steel Taxonomy?
Green Steel Taxonomy sets clear carbon thresholds for steel production and classifies steel products according to how clean or polluting their manufacturing process is.
It is:
• The world’s first formal green steel classification system
• Based on carbon intensity per tonne of finished steel
• Designed to drive industrial decarbonisation
Why India Introduced Green Steel Taxonomy
Before this framework:
• No globally accepted definition of green steel
• Emission claims lacked verification
• Investors and buyers faced uncertainty
India needed this system to:
• Reduce emissions from carbon-intensive steel plants
• Support climate commitments
• Prepare for global carbon rules such as CBAM
• Strengthen export competitiveness
Official Definition of Green Steel
Steel qualifies as green if its emission intensity is:
Below 2.2 tonnes of CO₂ equivalent per tonne of finished steel (tfs)
The lower the emissions, the higher the green rating.
Green Steel Star Rating System
| Rating | Emission Intensity | Classification |
|---|---|---|
| Five-star | Below 1.6 t-CO₂e/tfs | Highest green steel |
| Four-star | 1.6 – 2.0 | Low-carbon steel |
| Three-star | 2.0 – 2.2 | Marginal green |
| No rating | Above 2.2 | Not green steel |
Steel above the 2.2 threshold is not eligible for green status.
Emissions Covered Under the Taxonomy
The framework includes:
Scope 1: Direct plant emissions
Scope 2: Electricity and energy emissions
Limited Scope 3: Raw material processes like coke making and sintering
It excludes post-production transport emissions.
Who Certifies Green Steel?
The nodal agency is:
National Institute of Secondary Steel Technology (NISST)
Responsibilities include:
• Emission measurement and verification
• Issuing star ratings annually
• Maintaining certified plant registry
Global Relevance and CBAM Connection
International carbon policies increasingly tax imports based on pollution levels.
With a verified green steel system, Indian producers can:
• Prove low carbon intensity
• Avoid heavy carbon penalties
• Maintain export market access
How Green Steel Supports India’s Climate Strategy
1. Industrial Decarbonisation
Promotes hydrogen steelmaking, renewable energy, and recycling.
2. Net-Zero 2070 Goal
Steel contributes nearly 12% of national emissions.
3. Export Competitiveness
Low-carbon steel performs better in climate-regulated markets.
4. Green Investment
Enables access to sustainable finance and policy incentives.
Major Indian Steel Companies Driving the Transition
Tata Steel
Green hydrogen trials, electric arc furnaces, renewable power integration, carbon capture research.
Target: Net-zero steel by 2045.
JSW Steel
Large-scale scrap recycling, renewable electricity, hydrogen-ready furnaces, reduced coal usage.
Steel Authority of India Limited
Blast furnace modernisation, solar energy projects, hydrogen research, emission monitoring.
ArcelorMittal Nippon Steel India
Renewable energy adoption, hydrogen DRI projects, high recycling, aggressive emission reduction.
Key Green Actions Across the Industry
| Area | Action | Impact |
|---|---|---|
| Hydrogen use | Replacing coal in iron making | Near-zero emissions |
| Renewable power | Clean energy for furnaces | Major carbon reduction |
| Scrap recycling | Electric arc furnaces | 60–90% cleaner |
| Furnace upgrades | Efficiency improvements | Lower coal dependence |
| Carbon tracking | Taxonomy certification | Verified green steel |
Exam-Ready Summary
Green Steel Taxonomy is India’s first global framework that classifies steel based on carbon emission intensity using a star-rating system. It covers emissions up to finished steel production and is certified by NISST. The taxonomy supports decarbonisation of India’s steel sector, strengthens climate action, improves export competitiveness under carbon regulations, and encourages sustainable industrial growth.
One-Line Revision
India’s Green Steel Taxonomy rates steel by carbon emissions to promote clean technologies, renewable energy, recycling, and climate-friendly manufacturing.
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