Agreements link more than half of global steel production under standards of low emission steel

As global steel production moves towards a decarbonised future, the challenge of variable greenhouse gas (GHG) measurement frameworks, unverified calculations and unscrutinised claims is rising across the world. There is a need to develop coherence and credibility to be able to have an effective global market for low carbon steel. The definitions and benchmarks of low carbon steel may vary across geographies due to the varying levels of resource availability and conditions around the world. But efforts are being made to have an alignment on standards, methodologies and frameworks being followed to measure embodied emissions of steel to ensure the claims and definitions attained are being built on common understanding and estimations, thus making claims more trustworthy, especially for increasing buyers of low carbon steel across the world.

ResponsibleSteel is a global organisation/initiative working on certification and standards for steel.  It has been developing standards for GHG emission accounting and classification under its initiative of Industrial Production Standard. Taking a step further, it announced partnerships with two standards — Europe’s Low Emission Steel Standard (LESS) and China’s Low-carbon Emission Steel Standard (C2F Steel) — to advance global comparability and trade in low-emission and near-zero steel. The two agreements were agreed between ResponsibleSteel and China Iron and Steel Association (CISA), and between ResponsibleSteel and Brussels-based Low Emission Steel Standard Organisation (LESS aisbl). Together, these two agreements represent 60 per cent of the world’s steel production. 

These agreements extend a common approach to GHG measurement and classification for more than half of the steel produced globally. They tend to connect major producers, consumers, and innovators across the global steel value chain under interoperable definitions of low carbon steel. By aligning some of the world’s largest steel producers, the agreements intend to open doors for greater investment, green procurement, technology exchange and international collaboration for sustainable steel making. It further wants to facilitate trade and investment in decarbonised steel along with ensuring credibility and consistency in global standards.

ResponsibleSteel mentions that its GHG accounting methodology and classification system has been developed over several years in a transparent multi-stakeholder process through input from over 70 business and civil society organisations and 180 individuals — including steelmakers with blast furnace (BF) and electric arc furnace operations.

Annie Heaton, CEO of ResponsibleSteel said: “These agreements pave the way to the first real examples of interoperability between standards – a breakthrough development which will provide clarity for steel producers, buyers, investors and policymakers.”

Through these agreements, they have tried to send a signal to build a consensus around ‘scrap variable’ approach to low emission steel classification. This approach acknowledges the limited possibility to produce recycled steel (due to limited scrap) for a long time and would therefore drive decarbonisation across all technologies. According to them, the approach is already recognised by the G7. They mention that this prevents fruitless competition for a limited steel scrap supply, incentivises decarbonisation, promotes technology-neutral solutions in line with international trade rules and helps in reducing barriers in trade.  

What about India?  

With China Iron and Steel Association coming on board, the question also arises as to whether Indian association and steel players also align with this framework of ResponsibleSteel? Already, Indian steel producers like JSW and Tata Steel have acquired certifications from ResponsibleSteel under its International Production Standard. Although a large-scale acceptance of the framework in India would need detailed discussions and understanding of the Indian steel manufacturing and market scenario. Currently, more than 90 per cent of steel produced in India is consumed domestically and the share of finished steel export has come down from 13.4 million tonnes in 2021-22 to 4.858 million tonnes in 2024-25. The reason being the rising domestic demand and increasing trade measures like Carbon Border Adjustment Mechanism. On the other hand, finished steel import has gone up from 4.6 million tonnes to 8.3 million tonnes. This certainly could be one of the reasons behind non-prioritisation of international alignment currently.

Additionally, due to the rising domestic demand and production of steel, the policies on steel in India have been largely focusing internally, based on domestic conditions. In 2024, India declared its own green steel taxonomy. The current taxonomy does not take a scrap variable approach, which is contrary to ResponsibleSteel’s approach. The reason behind this probably is due to the limited availability, high cost to acquire and process the informal ecosystem of steel scrap in India. India still needs to build its ecosystem for well-accounted, good quality scrap with an increasing trend of domestic steel scrap generation and reducing trend of steel scrap imports due to trade restrictions. Therefore, probably to incentivise the steel scrap ecosystem, the taxonomy currently does not have a different definition for recycled scrap. The Indian green steel taxonomy also has set emission intensity benchmarks that do not align with many other geographies around the world. Additionally, India has also come up with its own carbon credit and trading scheme which has brought in emission intensity targets for steel players. Both these schemes would be following a domestically developed GHG accounting framework and methodology, the task being how aligned can they be made to global frameworks.

Therefore, falling exports, internally focused policies, frameworks and methodologies and other such differences could be the challenges in India adopting to such global frameworks on a large scale. Although, with rising steel production in the future, the possibility of increased exports will always be there and would also benefit India’s economy in the long run. Therefore, alignment and coherence with global standards and methodologies will be beneficial for the Indian steel sector in the long run. India could find ways to align with such global standards and methodologies while also keeping in consideration its developmental goals and resource limitations to keep opportunities open for future possibilities.