Steel emits nearly 9% of global CO?, making decarbonization urgent. But are Green Steel Taxonomies fair to developing countries? ABC Live explores global comparisons and India’s way forward.
New Delhi (ABC Live): Green Steel: The steel sector accounts for 7–9% of global CO? emissions, making it one of the most emission-intensive industries. With the world aiming for net-zero emissions, steel’s transformation is vital.
To guide this shift, countries are introducing Green Steel Taxonomies—frameworks that define what qualifies as low-emission steel. But can developing countries keep up with these standards?
What Is Green Steel Taxonomy?
A Green Steel Taxonomy establishes clear, science-based rules to define “green steel.” These criteria usually include:
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Emissions intensity thresholds (e.g., kg CO? per tonne of steel)
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Eligible technologies (e.g., H?-DRI, EAF with renewables)
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Scope of emissions (Scopes 1, 2, and sometimes 3)
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Verification via lifecycle assessment (LCA) or independent audits
Global Comparative Analysis of Green Steel Standards
Steel-producing countries are adopting different pathways. Here’s a snapshot:
| Country | Emission Limit | Taxonomy Status | Green Tech Focus | Steel Emissions (% of national total) |
|---|---|---|---|---|
| EU | <0.352 tCO?/t | EU Taxonomy | H?-DRI, EAF, CCUS | ~5% |
| Germany | EU-aligned | Carbon Contracts for Difference | H?-DRI | ~6.5% |
| USA | Benchmarking only | IRA Clean Energy Credits | Scrap-EAF, IRA | ~7% |
| India | No official limit | National Green Hydrogen Mission, Steel Scrap Policy | EAF, coal DRI, H?-DRI pilots | ~12% |
| China | No defined limit | Green Factory Program | CCUS, limited EAF | ~15% |
| Japan | Model-based limit | COURSE50, SuperCOURSE | COURSE50, SuperCOURSE | ~14% |
| S. Korea | Draft taxonomy | K-Taxonomy (MOE Korea) | H?-DRI, CCUS | ~12% |
Key Insight: The EU leads with strict taxonomy and emissions thresholds, while India, China, and others are in the pilot or drafting stage.
Green Steel in Developed vs Developing Nations: The Practicality Divide
The ambition to decarbonise is global. But the ability to deliver is not equal. Here’s why:
| Aspect | Developed Nations | Developing Nations |
|---|---|---|
| Capital Access | ESG funding, public subsidies | Cost barriers, risk-averse investors |
| Tech Readiness | Pilot projects operational | Reliant on legacy tech |
| Grid & Energy | Clean power, H?-ready | Coal-heavy grids |
| Policy Tools | ETS, CBAM, CCfDs | Weak carbon pricing, voluntary standards |
| Industrial Structure | Consolidated, corporatised | MSME-dominated |
| Production Cost Impact | Absorbed by subsidies | 50–70% higher costs for green steel |
?? India vs ?? Germany: A Case Study
| Metric | India | Germany |
|---|---|---|
| Dominant Tech | Coal DRI, BF-BOF | BF-BOF shifting to H?-DRI |
| Retrofit Cost | $250–300M/Mt | $180–220M/Mt |
| Hydrogen Use | Pilot only | National hydrogen network |
| Policy Support | Green Hydrogen Mission | EU ETS, CBAM |
Policy Solutions to Bridge the Gap
For a fair and inclusive global decarbonization path, we must rethink taxonomy designs. Here’s how:
1. Tiered Taxonomy Design
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Green (<0.3 tCO?/t)
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Transitional (<0.5 tCO?/t)
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Conventional (>0.5 tCO?/t)
2. Just Transition Financing
3. Technology Transfer
4. Domestic Carbon Markets
5. Green Public Procurement (GPP)
?? The Road Ahead for India’s Green Steel Taxonomy
India is the second-largest steel producer, but 80% of its steel comes from coal-based routes. To move forward, India needs:
| Component | Suggested Value |
|---|---|
| Threshold | <0.3 tCO?/t (green), <0.5 tCO?/t (transitional) |
| Tech | EAF, H?-DRI, BF+CCUS |
| Certification | ISO LCA + third-party audit |
| Incentives | Carbon Credit Trading Scheme, PLI |
| Export Compatibility | Align with EU CBAM, Global Steel Climate Council |
Conclusion: Can Taxonomy Drive Global Equity in Steel Decarbonization?
Green steel taxonomies are becoming gatekeepers to finance, procurement, and trade. But without flexibility and global cooperation, they risk excluding the Global South from the green industrial transition.
India’s proposed taxonomy must strike a balance between scientific ambition and socioeconomic reality, paving the way for a just and inclusive green future.
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