Scrap recycling in steel industry plays a crucial role in green technology development by reducing CO 2 emissions. Plant scale predictions on effectiveness of steel scrap recycle have been rarely attempted. A life cycle inventory (LCI)‐based methodology for plant CO 2 emissions is developed using process modeling of different primary stages (blast furnace‐basic oxygen process (BF‐BOF) and directly reduced iron (DRI, coal based) ‐ electric arc furnace (EAF) process with scrap additions). Emission data from primary stages is used for secondary processing stages for predicting the scope of further reduction. Plant emission reduction through scrap recycle has shown that primary stage emission values can decrease to 1.79 kg CO 2 /FU (functional unit) and 2.30 kg CO 2 /FU, respectively, for BF‐BOF and DRI‐EAF routes, by using 400–420 kg scrap per ton of crude steel. The DRI‐EAF route emissions can further decrease if gas‐based DRI is used. Secondary processing of scrap has the potential to decrease overall steel industry emissions to 1.16 kg CO 2 /FU. Specific country‐based data is processed to estimate net emissions with scrap addition to both primary and secondary stages leading to net emissions of 2.17 kg CO 2 /FU from 2.6 kg CO 2 /FU without scrap addition.