Sector map: steel
Intuition
Most Indian steel is made in blast furnaces or coal-based direct reduction plants, which emit far more per tonne than scrap-based electric arc furnaces. That makes emissions intensity the key ESG number for a steel company. It now affects exports to Europe through CBAM, will soon affect domestic costs through CCTS targets, and decides whether steel can be sold as "green" under India's own taxonomy. Steel plants are also heavy users of water and land, and the work is dangerous.
Mechanics
Material issues
| Issue | Financial channel | Where to find data | Metric to track |
|---|---|---|---|
| Emissions intensity | CBAM costs on EU exports; CCTS costs; green steel premium | BRSR Principle 6; company sustainability reports | tCO2e per tonne of crude or finished steel, by route |
| CBAM exposure | Lower export prices or lost EU orders | Annual report export split | Share of sales to the EU; verified embedded emissions |
| Worker safety | Stoppages, compensation, reputation | BRSR Principle 3 | Fatalities, including contractors; LTIFR |
| Water | Output risk in dry years | BRSR Principle 6 | Specific water consumption per tonne |
| Land, mining and communities | Project delays, licence risk | Approvals; BRSR Principle 8 | Grievances; resettlement disclosures |
Indian rules to know
- Green Steel Taxonomy (12 December 2024): steel counts as green only below 2.2 tCO2e per tonne of finished steel. Five-star steel is below 1.6, four-star 1.6 to 2.0, and three-star 2.0 to 2.2. It covers Scope 1, Scope 2 and limited Scope 3 up to finished steel, with NISST handling measurement and verification. Thresholds are reviewed every three years.
- CCTS: revised draft targets for 255 iron and steel entities were issued in June 2026, with compliance proposed from FY 2026-27.
- EU CBAM: charges began on 1 January 2026. The payable share is 2.5% of embedded emissions in 2026, rising to 100% in 2034. The India-EU trade deal of January 2026 did not exempt India.
Sources
From the research
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