China Halts Coal-Based Steel Projects to Accelerate Carbon Neutrality Goals

In the first half of the year, China made history by not approving any coal-based steelmaking projects, aligning with its climate neutrality goals announced in 2020. This marks a crucial shift as the country aims to become carbon neutral by 2060. Provincial governments permitted 7.1 million tons of steelmaking capacity, all of which used electric arc furnaces running on recycled scrap and electricity, signaling a cleaner process.

Impact on Emissions

The move to halt coal-based projects is expected to contribute significantly to China's decarbonization efforts in the steel industry. It is projected to lead to a reduction of 200 million tons of carbon dioxide by 2025, representing a 10% drop from the peak in 2020, as stated by the Center for Research on Energy and Clean Air (CREA).

New Action Plan

China has announced a comprehensive action plan for the steel sector, setting a target to reduce emissions by 53 million tons and imposing restrictions on the exports of low-value iron and steel products through 2024-2025. This strategic plan reflects the country's commitment to sustainable steel production and aligns with its broader environmental objectives.

With the anticipated peak in steel demand and the availability of more scrap, the industry foresees a significant opportunity to further reduce emissions over the next decade. Xinyi Shen, lead author of the report, emphasized the potential for emissions reduction as the steel sector evolves.