China sets 2030 as the new deadline for peaking carbon emissions for the steel industry, against the earlier target of 2025, according to a guideline published by the Ministry of Industry and Information Technology (MIIT) and two other regulators on February 7, as reported by SCMP on the same day. The guideline also demands over 80% of steel capacity to complete ultra-low-emission modification by 2025 and the proportion of electric arc furnaces (EAFs) output in total crude steel output to reach at least 15% in 2025 from the 2020 level of 10%.

The revised guideline is a relief to China’s steelmakers as they have been saddled with strict restrictions on both capacity and emissions since 2021. China’s crude steel output declined 3% YoY to 1.03bn tons last year. Meanwhile, 23 Chinese steel enterprises with a total production capacity of 145m tons completed ultra-low emission reform, leaving 225 companies with 536m tons of production capacity still in need of modifications in 2022. According to industry insiders, the previous plan to peak carbon emissions of the steelmaking industry by 2025 is too ambitious for the small and medium-sized enterprises as they need time and capital to develop and adapt to carbon-reduction technologies. Furthermore, the restrictions on steel output also contributed to price spikes in steel products last year. Citing President Xi Jinping in January, the climate targets should not influence supplies of commodities that ensure the normal life of the masses.

Sources:

https://www.scmp.com/economy/china-economy/article/3166083/china-significantly-increase-iron-ore-output-boost-use-scrap?module=perpetual_scroll_0&pgtype=article&campaign=3166083

https://www.caixin.com/2022-01-10/101828391.html

https://www.caixin.com/2022-02-08/101839051.html#

https://www.bloomberg.com/news/articles/2022-02-08/iron-ore-smashes-150-after-beijing-eases-steel-s-green-targets