Tata Steel to Build Green Steel Future by 2040

Tata Steel has set an ambitious target to produce 10–15 million tonnes annually of green steel by 2040, transitioning from conventional blast‑furnace operations to recycling‑based methods in India and Europe—a strategic pivot to circular, low‑carbon steel production.

In FY 2024–25, Tata Steel produced 30.92 Mt of steel against a total capacity of 35 Mt worldwide. With plans to expand Indian capacity to 40 Mt by 2030, the group is sharply increasing its low-carbon footprint. Globally, Tata Steel has declared that 10–15 Mt of its future steel output will stem from recycling, moving the company “from linearity to circularity”. This shift entails expanding existing recycling capacity and overlaying low-carbon technologies across its value chain.

A key domestic milestone is the inauguration of a 0.75 Mt-per-annum recycling plant in Ludhiana by FY 2025–26, joining an established substitute plant near Delhi. These facilities will process scrap into new steel via electric arc furnaces (EAFs), reducing dependence on emissions-heavy techniques. In Europe, Tata Steel is phasing out blast furnaces in the UK and Netherlands. Port Talbot’s 3 Mt blast furnaces are being replaced with EAFs; IJmuiden (6.75 Mt) is set to transition by 2035. The result: 10 Mt of greener steel production by mid‑decade.

Industry analysts note EAFs can cut emissions by up to 70% compared with blast‑furnace/basic oxygen furnace (BF‑BOF) routes. As Europe faces carbon constraints, Tata’s overhaul will enhance its access to export markets facing restrictions like the EU Carbon Border Adjustment Mechanism (CBAM). However, expansion hinges on reliable scrap availability—a challenge in India’s nascent supply systems. Success requires not only recycling plants but also waste management networks, collection systems, and supportive policy frameworks for renewable energy and carbon pricing.

Tata Steel also continues to pilot HIsarna, a low‑emission smelting method that omits coke and sintering—already reducing CO₂ emissions by over 50% in tests, though widespread deployment is pending. The company has set a target to eliminate all European blast furnaces by 2035. With deep technical expertise and scale, Tata is well‑positioned; its Indian capacity sits above 26 Mt, plus 1.7 Mt in Thailand. Investors have responded positively. As global capital leans towards ESG‑aligned firms, Tata Steel’s sustainability roadmap strengthens its access to green finance and improves its ESG ratings—factors increasingly influencing investment decisions.

Yet the transition is not risk‑free. Scaling EAFs demands stable and affordable electricity; steel output quality must match BF‑BOF standards. In Europe, the model is supported by £500 million in UK government aid for Port Talbot’s transformation. India may need similar policy reinforcement through incentives, renewable energy tariffs, and scrap collection infrastructure, to maintain competitive EAF production. From an urban perspective, green steel development supports city‑level sustainability: reducing CO₂ emissions in industrial corridors, creating green‑tech employment opportunities, and lessening environmental harm. It aligns with editors’ agendas promoting zero‑carbon, gender‑neutral, inclusive cities powered by sustainable industry.

Tata Steel’s shift also sets an industry benchmark. Other Indian steelmakers—JSW, ArcelorMittal Nippon—will likely need to follow suit. Civil society voices stress that slow-moving emission targets are insufficient; rapid scaling in recycling capacity and circular systems is crucial for aligning India with its 2070 net-zero targets. Looking ahead, Tata Steel’s focus will expand to green steel alloys, hydrogen‑based direct‑reduction iron (DRI), and upgraded scrap recycling standards. Monitoring implementation progress and managing financial exposure will determine if this green pivot is transformative or aspirational.

Ultimately, Tata Steel’s commitment—15 Mt of green steel output by 2040—reflects an existential move for both the company and the steel industry. If successful, it could redefine industrial sustainability, bolster India’s climate ambitions, and mobilise similar action globally.

Tata Steel to Build Green Steel Future by 2040