How will China’s Steel Develop in the Context of Low-carbon Transition

The iron and steel industry is an important basic industry of the national economy, an important support for building a modern country, and an important field to achieve green and low-carbon development. China's steel industry carbon emissions account for about 18% of the overall manufacturing carbon emissions, the steel industry energy conservation and emission reduction is imperative. In the context of carbon neutrality, the policy is favorable for the development of the steel industry, the profit of steel enterprises will be improved, and the industry concentration will be enhanced.

China is actively promoting carbon neutrality

Carbon neutrality refers to the total amount of carbon dioxide or greenhouse gas emissions directly or indirectly generated by countries, enterprises, products, activities or individuals within a certain period of time. Through afforestation, energy conservation and emission reduction, the carbon dioxide or greenhouse gas emissions generated by the countries themselves are offset to achieve positive and negative offset, so as to achieve relatively "zero emissions".

Carbon emissions of high steel carbon reduction is imperative

Iron and steel industry is a typical "high input, high energy consumption, high emission" industry. The carbon emissions of China's steel industry account for 51% of the global steel industry's carbon emissions, far more than that of other economies. According to the calculation of the Metallurgical Industry Planning Institute, the carbon emissions of China's iron and steel industry account for about 18% of the total carbon emissions of the manufacturing industry, making it the industrial category with the highest carbon emissions. Accelerating the green and low-carbon transformation of the steel industry, realizing carbon peak as soon as possible and effectively reducing carbon is not only the internal needs of the high-quality development of the industry itself, but also the objective requirements to support the implementation of the national carbon peak and carbon neutrality goals.

The iron and steel industry has seven development paths to reduce emissions


● To control the production capacity of the steel industry, eliminate outdated production capacity, and gradually establish a stock restraint mechanism based on "carbon emission, pollutant emission and total energy consumption";

● Optimize the energy structure, process structure and flow structure of iron and steel enterprises;

● Optimize industrial layout and build green and low-carbon industrial ecological chain;

● Make breakthroughs in core technologies for energy conservation and emission reduction, and develop major disruptive technologies for the industry, such as hydrogen metallurgy, biomass energy use and carbon dioxide resource utilization;

● Develop high-performance products and promote the greening of materials;

● Deepen intelligent manufacturing to help green production process;

● Build an international cooperation platform to promote innovation in key technologies.

Development prospect of steel industry under the background of carbon neutrality

1. Favorable policies for the development of the steel industry

China's iron and steel industry is still under the pressure of overcapacity, lack of industrial safety, green and low-carbon development level to be improved, low industrial concentration and other problems. We will adjust export tariffs on steel products, cancel export tax rebates for some steel products, and plan to include steel, cement, chemical and other industries in the carbon emission rights trading market to promote high-quality development of the steel industry.

2. Steel companies will improve profits

In the context of carbon neutrality, the core of supply-side reform in the steel industry, whether "double control of production capacity and output" or "double control of total carbon emission and intensity", is "carbon reduction". It is expected that the industry will usher in a new round of structural optimization. At that time, steel prices will be relatively high, pull the growth of corporate profits.

3. The concentration of the iron and steel industry is improved

With the continuous promotion of carbon neutrality policy, China's steel industry concentration will continue to rise.

Post time: Mar-03-2023