• Around 80-85 steel companies apply for certification
• Delay in formulation of GPP policy delaying green investments

As many as 80 to 85 steel companies in the country have applied for green steel certification under the Ministry of Steel (MoS), Government of India, and around 60 companies have received certification, according to sources in the National Institute of Secondary Steel Technology (NISST) the agency entrusted with monitoring, reporting and verification (MRV) of carbon emissions from steel production and awarding of green steel certificates.

Green steel certificates are awarded on the basis of the taxonomy and tiered classification of low-emissions steel, as enunciated by the MoS, and the star-rating system based on CO2 emissions intensity of production. The MoS has established a star-rating system based on the carbon dioxide equivalent (CO2e) emissions per tonne of finished steel produced:

• Five-Star Green Steel: Emissions below 1.6 tCO2e/tfs
• Four-Star Green Steel: Emissions between 1.6 and 2.0 tCO2e/tfs
• Three-Star Green Steel: Emissions between 2.0 and 2.2 tCO2e/tfs
• Not Green: Emissions above 2.2 tCO2e/tfs

Carbon verification agency

Sources indicated that Accredited Carbon Verification Agency (ACVA) will be allocated by NISST for all registered units. Steel mills will have to issue work orders to ACVAs for audit and submission of reports to NISST within a specified period. The certification process will cost around INR 95,000 for each mill, irrespective of its size, 10% of which will have to be paid up front.

The scope of emissions, as underlined by the MoS, will include Scope 1 & 2 and will also take into account Scope 3 emissions associated with raw material preparation such as sintering and pelletising, while excluding upstream and downstream transportation and mining-related emissions.

Secondary sector at an advantage?

Notably, as many as 32 steel secondary steel units in the country, with cumulative production of over 5.6 mnt in the current financial year, have emissions below 1.6 tCO2/tfs or within 1.6-2.2 tCO2/tfs. Out of these, three are already eligible for 5-star rating (below 2.2 tCO2/tfs), 15 for 4-star and 14 for 3-star rating, according to the BEE's gazette notification setting GHG emissions targets for the iron and steel sector.

By financial year 2026-27, cumulative steel production of over 14 mnt will be in a position to be classified as green steel (as per the government's classification system). Interestingly, while currently none of the ISPs feature in the list of low-emissions producers, by FY'27, one steel major will be included in the 3-star category, with emissions reaching below 2.2 tCO2/tcs.

However, sources said that the cumulative production capacity of the 60-odd companies that have received green steel certificates is just a fraction of India's total steel production, with none of the major producers in the list. Moreover, the delay in the publication of the government's proposed green public procurement programme (GPPP) is triggering uncertainty relating to investments in low-emissions steel.

As per estimates, demand for low-emissions steel (as per taxonomy) will mainly emerge from the public infrastructure and construction sector, not to mention private construction. Therefore, the formulation of a green procurement pledge from the government is critical to channelling investments in low-CO2 production.

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