This study reports a sustainable, pH-responsive microcapsule-based coating for the corrosion protection of iron in a 3.5 wt% NaCl solution. Epoxy and cerium nitrate were encapsulated in microcapsules (UFM) and immobilised in a tannic acid–based epoxy biopolymer (T). The effect of microcapsule levels (0, 1, 3, 6, or 15%) on coating performance was examined. The synthesised microcapsules were characterised using Fourier-transform infrared spectroscopy, X-ray diffraction and thermogravimetric analysis. Morphological features were examined with scanning electron microscopy and optical microscopy, while UV–visible spectroscopy revealed controlled, pH-dependent release of the healing agents, with enhanced release under acidic conditions. Electrochemical tests demonstrated that the coating containing 6% microcapsules exhibited the best corrosion protection, with a low corrosion current density (icorr = 6.13 × 10–8 A/cm2) and a high polarisation resistance (7.55 × 104 Ω cm2). Cyclic polarisation tests revealed a breakdown potential of 0.4 V without any sign of iron dissolution. Using electrochemical impedance spectroscopy, the coating capacitance was determined to be 4.36 × 10–11 F. The developed microcapsule-based coating system responded to both pH changes and mechanical damage, providing effective protection for iron. The environmental compatibility of the coating was further assessed by quantifying formaldehyde release using the Nash colourimetric assay. The resulting data confirmed negligible formaldehyde release, supporting the eco-friendly nature of the formulated coating system.