Steel Slag: An Emerging Carbon Opportunity for India
By Sayanta Ghosh, Senior Associate Fellow & Area Convenor, The Energy and Resources Institute (TERI)
31 August 2026, New Delhi: India’s steel boom is creating a parallel question: what should the country do with the slag that comes with it? India produced 168.4 million tonnes of crude steel in 2025–26, and steelmaking capacity reached about 222 million tonnes per annum by June 2026, against the National Steel Policy target of 300 MTPA by 2030. Integrated steel plants generate roughly 180–200 kg of steel slag per tonne of steel; government estimates have put slag generation at 15–19 million tonnes a year and projected it could approach 60 million tonnes by 2030. Roads and construction will absorb part of this stream. Agriculture could open another route, and, if the carbon impact is measurable, a carbon-market route as well.
Selected steel slags contain iron, calcium, magnesium and silicate minerals. After processing and testing, some can be used as soil amendments or silicate fertilizers. In flooded rice, iron can suppress methanogenesis. In a 2024 rice-paddy study, silicate fertilizer applied at 1.5 tonnes per hectare reduced seasonal methane by 19–38%, cut nitrous oxide by about 40%, and raised grain yield by up to 16%; greenhouse-gas intensity fell 33% with conventional silicate fertilizer and 51–55% with iron-enriched formulations. POSCO separately reports about a 14% reduction in rice methane from slag-based silicate fertilizer. These are not Indian crediting factors, but they show exactly what India should test.
There is a second pathway. Reactive calcium- and magnesium-bearing minerals can weather and neutralise acidity while converting CO₂ into bicarbonate or carbonate forms. A three-year US field trial published in 2025 found measurable weathering and higher alkalinity in acidic soils treated with steel slag, while effects were weak in neutral soils. That result matters: the same removal rate cannot be assumed for every slag and every soil.
The Methodology Question
A steel-slag project should begin by choosing the carbon claim, not the registry. If the measurable outcome is lower methane or nitrous oxide from a changed agricultural practice, an agricultural land-management route is the logical starting point. Verra’s active VM0042 Improved Agricultural Land Management methodology covers GHG reductions and soil-organic-carbon removals from changes in fertilizer, residue and water management, among other practices. Steel slag is not automatically eligible; the specific intervention, baseline and monitored outcome would have to fit the methodology.
India has another opening. As of July 7, 2026, the Carbon Credit Trading Scheme’s Offset Mechanism had 12 approved methodologies, including BM AG04.002 for emission reductions through improved management practices in rice cultivation. There is currently no dedicated Indian methodology for steel-slag fertilizer or mineral weathering. If an Indian pilot shows repeatable methane reduction, the first question is whether BM AG04.002 can accommodate it; if not, an additional module or new methodology could be developed.
If the main claim is mineral CO₂ removal, the accounting route changes. The project would need to measure feedstock mineralogy, application rate, dissolution, alkalinity or inorganic-carbon change, grinding and transport emissions, and carbon lost downstream. Methane reduction and mineral removal should be accounted for separately to avoid double counting.
The Business Case Is Larger Than the Credit
This could become a four-player market. Steel producers gain a productive outlet for suitable slag. Fertilizer companies convert it into crop- and soil-specific products. Farmers receive the material and, where field results demonstrate it, gain from higher yield or lower input costs. Carbon developers and investors finance aggregation, monitoring, verification and registration in return for a share of future credits.
The farmer-income equation must be explicit. If 1.5 tonnes of material per hectare is applied, the project should calculate the delivered cost per hectare, yield response, fertilizer saving, tonnes of CO₂e reduced or removed, credit price, MRV cost and farmer’s share. Without hectare-level economics, “carbon finance” remains a slogan. With it, an FPO can decide whether participation actually adds income before enrolling thousands of farmers.
A Five-Step Indian Roadmap
India should start around steel clusters. First, characterise slag streams plant by plant for calcium, magnesium, iron, silicate, free lime and trace metals. Second, overlay those sources with nearby rice and other suitable crop areas, acidic-soil zones and transport distance to identify deployment clusters. Third, run multi-season field trials with control plots and measure methane, nitrous oxide, yield, soil pH, soil organic and inorganic carbon, and heavy-metal uptake. Fourth, convert those measurements into an ex-ante business model: tonnes of CO₂e per hectare, tonnes of slag required per credit, cost per credit, break-even carbon price and farmer revenue. Fifth, choose the methodology, VM0042, the Indian rice route, an enhanced-weathering approach or a new methodology, based on what the data support.
India does not need to declare steel slag a carbon-credit solution today. It needs to determine where it works, how much emission reduction or removal it generates, what each credit costs, and who gets paid.
If those numbers work, a growing industrial by-product could become a three-way asset: lower farm emissions, additional farmer income and a new circular-economy business for India’s steel sector.
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