China has not approved any coal-based steelmaking projects in the first half of this year, marking a first since the announcement of its significant climate neutrality goals in 2020, according to a Bloomberg report.
Instead, all 7.1 mln tons of annual steelmaking capacity permitted by provincial governments in the first half utilized electric arc furnaces, a cleaner technology that operates on recycled scrap and electricity, as highlighted by the Center for Research on Energy and Clean Air (CREA) in its report released.
Transforming the steel industry, which is China’s second-largest source of carbon emissions at 15pct, is a critical element of the nation’s strategy to achieve carbon neutrality by 2060. Over the past years, Beijing has implemented measures such as limiting crude steel output and encouraging the adoption of cleaner steelmaking technologies. However, the industry still faces challenges, including low profit margins amid a weak economy.
According to CREA, the halt on permitting coal-based projects could signify a pivotal moment in China’s efforts to decarbonize its steel industry. This initiative is expected to help China reduce 200 mln tons of carbon dioxide emissions from the steel sector by 2025, representing a 10pct decrease from its peak in 2020.
In May, China, the world’s largest steel consumer, introduced a new action plan for 2024-2025. This plan aims to reduce emissions by 53 mln tons and restricts the export of low-value iron and steel products.
