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The Ministry of Ecological Environment (MEE) recently entrusted China Iron and Steel Association (CISA) with preliminary tasks to bring the iron and steel industry into the national carbon emissions trading system (ETS), as reported by Shanghai Securities News on June 23. MEE commanded the association to establish distribution and renewal policies for the industry’s carbon emission allowances (CEAs), research on the industry’s emission tracking mechanism, and assist with building and testing the national carbon market’s infrastructure, and else. CISA responded by delegating the tasks to its specialized taskforce focusing on promoting the iron and steel industry’s low-carbon transition.
The Metallurgical Industry Planning and Research Institute’s (MIPRI) released an action plan for the domestic iron and steel industry’s carbon peaking and reduction this March. The action plan proposed a timeline of carbon emission peak in 2025, 30% emission reduction in 2030, and carbon neutrality in 2060. Afterward, CISA established the low-carbon taskforce this April. The taskforce includes an executive committee consisting of 23 scholars and professionals in the iron and steel industry, as well as an expert committee containing 337 industry experts from 93 research institutes, enterprises, and other relevant organizations.
The iron and steel industry is the largest carbon emitter among China’s 31 manufacturing industries and accounted for about 15% of the country’s total carbon emissions in 2020. Additionally, as the largest producer and consumer of crude steel, China is also responsible for over 60% of the world’s emissions from steel. According to Li Xinchuang, the secretary and chief engineer of MIPRI, nearly 90% of the industry’s energy input still relied on coal and coke, while this energy structure would be economically infeasible to change in the short run. Therefore, restricting steel production capacity and output remains the primary measure to reduce the industry’s emissions. Most recently, the Ministry of Industry and Information Technology (MIIT) issued rules for production capacity swap in the iron and steel industry in early May, which strictly forbids increasing steel capacity.
MEE’s recent push for the industry’s integration into the national ETS can open new opportunities and approaches to further reduce the industry’s carbon emissions. Prior to the national carbon market, the 11 pilot carbon markets have included part of domestic steel enterprises, which cover about 14.3% of the country’s crude steel production. Those steel enterprises cooperated with local government departments to complete the work regarding carbon accounting methods, historical carbon emission inspection, carbon quota determination, and so on, for the management system of carbon emission trading. The trial experiences could also facilitate the inclusion of the industry into the national ETS.
Sources:
https://news.cnstock.com/news,bwkx-202106-4720112.htm
https://www.chinairn.com/hyzx/20210305/152839778.shtml
https://baijiahao.baidu.com/s?id=1698104989210804142&wfr=spider&for=pc
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https://news.stcn.com/sd/202105/t20210507_3200571.html
https://finance.sina.com.cn/chanjing/cyxw/2021-06-24/doc-ikqcfnca3017176.shtml
