KEY NUMBERS
4.49 MT : Projected green steel demand by FY30
24 MT : Projected green steel demand by FY35
73 MT : Projected green steel demand by FY40
179 MT : Projected green steel demand by FY50
25% : Estimated share of scrap currently available versus future requirements
750,000 Tonnes : Annual scrap requirement of Tata Steel’s Ludhiana EAF facility
Delhi And Haryana : Key sourcing regions for Ludhiana’s scrap procurement
EAF Route : Primary technology pathway for green steel production
India : World’s second largest steel producer
May 2026 : Growing industry focus on scrap availability challenges
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MARKET ANALYSIS
India’s green steel story has a hero.
It also has a problem.
The hero is electric arc furnace steelmaking. The technology sits at the centre of almost every major decarbonisation roadmap published by governments, steelmakers and industry bodies around the world. Compared with traditional blast furnace production, electric arc furnaces can dramatically reduce emissions when powered by cleaner electricity and fed with recycled steel scrap.
The problem is simple.
India does not have enough scrap.
That reality is becoming harder to ignore as green steel targets become more ambitious. Government projections suggest green steel demand could reach 4.49 million tonnes by FY30, rising to 24 million tonnes by FY35, 73 million tonnes by FY40 and an extraordinary 179 million tonnes by FY50.
The targets are ambitious.
The raw material challenge is even bigger.
Electric arc furnaces do not run on optimism. They run on scrap.
And India currently generates only a fraction of the material required to support large scale EAF expansion. Industry estimates suggest domestic scrap availability is currently around 25 percent of what future green steel ambitions may eventually require. The gap is enormous.
Unlike iron ore, scrap cannot simply be mined.
It must be collected.
That is where the challenge begins.
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WHY SCRAP IS BECOMING THE MOST IMPORTANT GREEN STEEL RAW MATERIAL
For decades, India’s steel industry was built around iron ore.
The country possesses some of the world’s largest reserves. Mining infrastructure exists. Supply chains are mature. Steelmakers understand how to secure raw materials.
Scrap is different.
A functioning scrap economy depends on collection networks, dismantling facilities, sorting operations, transportation systems and recycling infrastructure. It requires millions of small transactions occurring efficiently across thousands of locations.
India’s system remains fragmented.
Much of the scrap trade still operates through informal channels. Collection standards vary significantly. Processing capacity remains uneven. While vehicle scrappage policies and recycling initiatives exist, implementation has often lagged behind ambition.
As a result, steel producers expanding EAF capacity are increasingly competing for a limited pool of available material.
The challenge is already visible.
Tata Steel’s Ludhiana electric arc furnace requires approximately 750,000 tonnes of scrap annually. To secure those volumes, sourcing extends well beyond Punjab into Delhi, Haryana and neighbouring regions.
That is for one facility.
Imagine what happens when dozens more emerge.
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WHY IMPORTING SCRAP IS NOT A PERFECT SOLUTION
The obvious answer is imports.
Many countries supplement domestic scrap generation through international purchases. India already imports significant volumes of scrap and will likely continue doing so.
The problem is cost.
Imported scrap is exposed to freight rates, currency fluctuations, global demand cycles and supply disruptions. Procurement becomes more complicated. Availability becomes less predictable. Margins become more vulnerable to external shocks.
The global market is also becoming more competitive.
As more countries pursue green steel strategies, demand for high quality scrap is increasing. Europe, North America, Turkey and Southeast Asia are all competing for many of the same tonnes.
The future green steel economy may therefore face competition not just for customers.
But for raw materials.
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WHAT IT MEANS FOR FERRO ALLOYS
There is an important misconception surrounding green steel.
Many assume it reduces ferro alloy demand.
The opposite is often true.
Electric arc furnace steel still requires ferrochrome, silico manganese and ferro manganese. Stainless steel still requires chromium. Structural steel still requires manganese. Alloying requirements do not disappear simply because the production route changes.
The transition to green steel changes energy sources.
It does not eliminate metallurgy.
That means every successful expansion of EAF capacity still creates demand for ferro alloys.
The industry’s challenge is not alloy availability.
It is securing enough scrap to feed the furnaces that consume those alloys.
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THE BIGGER INDUSTRY QUESTION
India’s green steel targets are technically achievable.
The question is whether the supporting ecosystem develops quickly enough.
Steel plants can be built.
Electric arc furnaces can be commissioned.
Renewable power can be contracted.
Scrap generation takes time.
Most developed scrap economies benefit from decades of accumulated industrialisation, vehicle ownership and infrastructure replacement cycles. India is still building much of that stock today.
Ironically, the country’s future scrap availability may depend partly on the infrastructure and manufacturing boom happening right now.
Tomorrow’s scrap is being built today.
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MARKET OUTLOOK
The green steel conversation often focuses on hydrogen, renewable energy and carbon emissions.
Those are important topics.
The less glamorous discussion may prove even more important.
Scrap.
Without a reliable and scalable scrap ecosystem, India’s green steel ambitions become significantly harder to achieve. The industry can import material, but imports alone are unlikely to support the scale of growth being envisioned through FY50.
The challenge is solvable.
Collection networks can improve. Recycling infrastructure can expand. Policy implementation can strengthen.
But none of those changes happen overnight.
India knows how to build steel plants.
The next challenge may be learning how to build a scrap economy.