China will complete ultra-low emission modification on a total production capacity of 560m tons of crude steel by the end of 2022, including 140m tons finished by now, as reported by Caixin on January 10 according to the Ministry of Ecology and Environment (MEE). Specifically, 23 Chinese steel enterprises with a total production capacity of 145m tons have realized ultra-low emissions throughout their manufacturing processes. Meanwhile, 225 companies with 536m tons of production capacity still require modifications this year, equivalent to around 50% of China’s crude steel output in 2020.
The MEE and the NDRC jointly published a guideline regarding ultra-low emission modification in China’s steel sector in April 2019, which aimed for more than 80% of steel output to be produced by the ultra-low emission method by 2025. The modification is crucial to China’s decarbonization target, as the steel industry accounts for around 15% of the country’s total carbon emissions. Furthermore, the 2022 modification task would continue influencing the steel industry’s output. During the first 11 months of 2021, China’s crude steel output slid down 2.6% YoY to 946m tons, as the country restricted additional production capacities in energy-intensive sectors such as crude steel and cement under its 14th Five-Year Plan (FYP). Notably, from January to November 2021, the total revenue and profits of steel enterprises above the designated size still surged 36% and 112% YoY, respectively, due to the price hike driven by strong demand from industries.