India moves to finalize national scrap recycling policy to support green steel ambitions

INDIA – The Indian government is in the final stages of developing a new national scrap recycling policy, which will replace the existing 2019 guidelines.

The country now seeks to align its steel sector with rising domestic demand, global market shifts and long-term decarbonization goals, according to a report by the Financial Express.

Daya Nidhan Pandey, joint secretary at the Ministry of Steel, said the revised policy could be ready within the next few months.

He noted that scrap consumption in India’s steel industry is increasing steadily, with availability projected to rise to nearly 36 million tonnes in the coming years.

“This clearly indicates that demand for steel scrap will surge as large-scale capacity expansion continues,” Pandey said, adding that the government is targeting a gradual increase in the share of scrap used in steel production to match the global average of around 31%.

India has set ambitious production targets, aiming to reach 300 million tonnes of steel capacity by 2030 and 500 million tonnes by 2047.

As these targets come into view, scrap-based steelmaking is expected to play a central role in conserving iron ore and other raw materials, reducing dependence on imported coal, lowering greenhouse gas emissions and supporting India’s broader environmental and climate commitments.

The existing 2019 scrap policy was introduced to promote a circular economy in metallurgy by encouraging organized, safe and environmentally responsible recycling of end-of-life products, particularly obsolete vehicles clogging urban centres.

While Pandey did not disclose specific elements of the forthcoming policy, industry stakeholders expect it to go beyond vehicle scrappage to address structural gaps across collection, processing and utilization of scrap.

Dhruv Goel, chief executive officer of commodities intelligence firm BigMint, said the updated policy should prioritize building a transparent and integrated domestic scrap ecosystem to enable competitively priced, low-carbon steel production.

He suggested that the government could stimulate organised collection and recycling by streamlining value-added tax processes, funding modern shredding centres and accelerating approvals for vehicle recycling facilities.

The policy update also comes as India sharpens its focus on green steel. In December 2024, the government introduced a formal definition and rating framework for “green steel,” categorizing products based on carbon dioxide emissions during production.

Under the framework, steel produced with emissions below 2.2 tonnes of CO₂ per tonne of rolled product qualifies as three-star green steel, while emissions below 1.6 tonnes per tonne earn a five-star rating.

Industry analysts say a robust scrap recycling policy will be critical to achieving these benchmarks, positioning scrap not only as a waste management solution but as a strategic raw material in India’s transition to a lower-carbon steel industry.

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