Accurately assessing carbon emissions from recycling scrap steel is essential for reducing emissions in the steel industry, especially in China, the world’s largest crude steel producer. In this study, a carbon emission reduction index was introduced to evaluate the effectiveness of recycling scrap steel in reducing emissions. The index considers the three processes used in scrap steel recycling: blast furnace ironmaking, converter steelmaking, and electric arc furnace steelmaking. This study developed an evaluation model using fuzzy analytic hierarchy process and iterative cluster analysis to determine the reduction of carbon emission. From a life cycle perspective, this study identified primary factors contributing to emissions, including fuel, raw materials, electric energy, and auxiliary materials. Then, the carbon emission reduction index for scrap recycling was developed by examining the production of one ton of steel and each additional ton of scrap steel, which can provide valuable insights into the environmental impact of scrap recycling. Finally, the study forecasts the future Carbon Emission Reduction Index for steel scrap recycling. The study indicates an increase in the carbon emission reduction index for scrap recycling prior to 2017, followed by a decrease about 11.8% from 2017 to 2018 and increases from 2018 to 2021. Finally, it dropped by 8.7% per cent in 2022. Similarly, the carbon emission reduction index for electric furnace steelmaking increased prior to 2019, then subsequently decreased. It is changing by ten per cent a year. Additionally, the scrap recycling index experienced a significant decrease of 90% in 2015, followed by a gradual increase until 2017 and then a consistent decrease every year thereafter. The index suddenly rose in 2021 and then decreased change for policy reasons. The forecast results suggest a gradual increase in the carbon emission reduction index per ton of steel scrap in the future. In conclusion, the practicable modeling methodology has the ability to assist government organizations and private enterprises in devising efficient green and low-carbon development tactics.