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Decoding Green Steel Demand Growth In India And Abroad

As per the India Steel Association, by 2030, it is estimated that the global green steel (GS)/low-emission carbon steel demand is set to grow to approximately 180-200 MT. Approximately, it is a 10% increase in total steel demand. By 2040, the demand is forecasted to double up to 450-475 MT. It is an increase of around 20% of the total steel demand. In this article, let’s explore more about green steel, its demand, and iron scrap prices today.

Key Demand Drivers

There are some regions that are likely to propel the green steel demand. To be specific, the United States and the European Union collectively will represent approximately 50% of the total global green steel demand. When it comes to regulations, European steelmakers are subjected to strict regulatory decarbonization scrutiny, with a net zero goal for 2050.

Let’s have a look at the region-wise demand scenario:

  1.   North America: The region is likely to contribute to substantial demand of approx. 25-30% by the end of 2030. The ambitious goal of automotive companies pushing for low-emission carbon flat steel will add to the demand. Offering subsidies like the Inflation Reduction Act with a USD 369 billion package is expected to incentivize the clean energy push.
  2.   Europe: The region could contribute by up to 30-35% to green steel demand. Majorly, voluntary commitments with the free allowances withdrawal of the EU Emissions Trading System (ETS) in the mid-2030s will drive the demand.
  3.   Asia: In the developed regions, domestic firms are estimated to boost the demand setting high decarbonisation targets, way before policy measures kick in. As far as developing Asia is concerned, foreign companies might boost the demand as they decarbonize their sales abroad.


Sector-wise Demand

In addition to regulations, the green steel demand is impacted by the Scope 3 emission reduction goals of the steel customers. For instance, in Europe, companies operating in the construction, automotive, electrical & electronics industries have Scope 3 targets, where the steel customers ask for green steel from their suppliers. Several leading automotive firms have fixed a target for reducing 100% Scope 3 by the end of 2030. On the other hand, various construction companies have set Scope 3 reduction targets ranging between 30%-50 % by the end of 2030.

The transportation sector is likely to generate 34% of the total green steel demand by 2030. In addition to that, the construction sector is estimated to lead the global green steel demand. Since the installed base of renewables rises, the energy sector is likely to generate more green materials demand throughout the value chain. On a different note, iron scrap prices today range between Rs. 30-60. 


Demand In India

Here are the details:

  •       Net Zero Emissions: As the nation aims for net zero emissions by 2070, the country’s green steel need is all set to grow. Being a part of the World Economic Forum’s First Mover Coalition some Indian firms have committed to ensuring a minimum of 10% of their steel purchases being near-zero emissions by 2030.
  •       Direct Steel Exports: India’s GS demand could be altered by direct steel exports to developed countries, (such as the EU) which is implementing a CBAM (Carbon Border Adjustment Mechanism). Please keep in mind that this does not extend to indirect steel exports as of now. As a result, domestic factors such as the growing likelihood of carbon rates in India can also add up to boosting GS demand in India.
  •       Automobile Sector: During the initial time, there are high chance that the domestic demand is likely to be generated from the automobile sector. It is because the global automakers that see India being a large consumer base, have global net-zero goals to achieve. As a pre-requisite, these firms would need green steel for making automobiles and are highly likely to source steel locally.
  •       Government Steel Procurement: The government’s steel procurement could further boost the development of the domestic market. Steel procurement for government-funded infrastructure projects comprises approximately 90% of total infrastructure-oriented steel demand. On the other hand, government-funded construction projects comprise around 8-10 % of overall building construction-related steel consumption.

No wonder the government could initiate GS procurement with the help of policies like Green Corporate Procurement (GPC) and Green Public Procurement (GPP) as recommended by G20’s Task Force 4. And trigger the overall demand.

Please Note: The leftover scrap can be recycled and sold. The steel scrap prices will vary from one location to the other.



In order to change current business practices or make a paradigm shift in the investment decision-making process and expedite the steel sector’s decarbonization, the carbon price mechanism can be employed as a policy instrument. Emission systems linking can enhance economic efficiency simply by enabling abatement. Additionally, carbon price mechanisms can be developed in accordance with other developed nations (for example ETS), incentivizing and facilitating carbon reduction.

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