Recent Status of Production, Administration Policies, and Low-Carbon Technology Development of China’s Steel Industry

Abstract

In 2023, China’s crude steel production amount reached 1.019 billion tons, and the energy consumption of China’s steel industry amount reached 561 million tons of coal. China’s steel industry, with its dominant reliance on coal for energy and the primary use of blast furnaces and converters in production processes, as well as its massive output, has become the main field for achieving China’s “carbon peaking” and “carbon neutrality” goals. Firstly, this article summarizes the current production status of the steel industry and the situation of carbon emissions in the steel industry. Secondly, it discusses the dual-carbon policies based on the national and steel industry levels and outlines the future directions for China’s steel industry. Subsequently, it analyzes the current state of research and application of mature and emerging low-carbon technology in China’s steel industry and details the low-carbon plans of China’s steel companies using the low-carbon technology roadmaps of two representative steel companies as examples. Finally, the article gives policy suggestions for the further carbon reduction of China’s steel industry. The purpose of this paper is to show the efforts and contributions of China’s steel industry to the early realization of its “carbon peaking” and “carbon neutrality” goals.

1. Introduction

The increase in greenhouse gas emissions, such as carbon dioxide and methane, caused by human industrial, energy, and other activities is the main cause of global warming. Global warming leads to climate problems, such as rising sea levels and increasing extreme weather, and indirectly causes conflicts and economic issues. China currently possesses the world’s most comprehensive and largest-scale steel industry system, equipped with the world’s most advanced equipment and technology [1]. This industry can provide the most abundant iron and steel products. As an important basic industry, the steel industry contributes to the material foundation and material security of national economic development. However, the steel industry has been under significant pressure due to its environmental impact [2]. The steel industry is a resource-intensive and energy-intensive industry, while it is a high-energy-consumption and high-emission industry [3]. China’s crude steel production is about 1.019 billion tons, ranking first globally. The steel industry’s carbon emissions account for 15% of China’s carbon dioxide emissions, and it is the second largest emitting industry [4]. Therefore, the steel industry faces enormous pressure to reduce carbon emissions.

China announced it will strive to reach peak carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060 [5]. As a major contributor to China’s carbon emissions, the steel industry has received increasing attention recently. The Chinese government, large steel enterprises, universities, research institutions, and others have all carried out relevant work. On 24 December 2021, the Chinese government issued the “Working Guidance for Carbon Dioxide Peaking and Carbon Neutrality in Full and Faithful Implementation of the New Development Philosophy” [6]. It pointed out the formulation of action plans for carbon peaking in the energy, steel, and other industries to accelerate low-carbon technological development in the industrial sector. On 20 January 2022, the Chinese government issued “The Guiding Opinions on Promoting the High-Quality Development of the Steel Industry” [7]. It pointed out that innovative development, total quantity control, low-carbon development and overall co-ordination are the basic principles to achieve high-quality development in the steel industry. On 18 November 2021, Baowu Steel Group established a Low-Carbon Metallurgy Innovation Center and completed the construction of a Hydrogen-enriched Carbonic oxide Recycling Oxygenate Furnace (HyCROF), providing support for the progress of low-carbon metallurgical technology [8]. In December 2022, through the implementation of the “Hegang Low-Carbon Product Plan”, Hegang Group promotes the innovation of low-carbon technologies with upstream and downstream industries by using carbon reduction technologies such as biomass energy substitution and carbon capture utilization and storage (CCUS) [9]. In 2021, Capital Engineering & Research Incorporated was approved to establish the Low-Carbon Technology Research Institute (Bei**g) of China Metallurgical Corporation, which provides a solid foundation for future low-carbon technology research and development. Northeastern University, University of Science and Technology Bei**g, Chongqing University, North China University of Science and Technology, and other universities have established low-carbon metallurgical research departments based on their advantageous disciplines of metallurgy and focus on the key technologies for low-carbon steelmaking to help China’s steel industry to achieve low-carbon development.

Although many scholars have discussed carbon emissions and low-carbon technologies in China’s steel industry [10,11], few have discussed low-carbon policies for the steel industry and steel enterprise’s carbon reduction technologies. To fill this gap, firstly, this article overviews the development status of China’s steel industry. Secondly, it discusses the dual-carbon policies based on the national and steel industry levels. Subsequently, it analyzes the current state of research on low-carbon technology in China’s steel industry and details the low-carbon plans of China’s steel companies. Finally, the article gives suggestions for further carbon reduction in China’s steel industry. It is aiming to provide a reference for China’s steel industry to achieve carbon peaking and carbon neutrality as soon as possible.

2. Current Production Status of China’s Steel Industry

2.1. Variations of Crude Steel Production Amount

China’s crude steel production amounts from less than one-thousandth of the world’s production amount when the People’s Republic of China was established, to 53.9% of the global crude steel production amount by 2023; this growth rate sets a new historical record for humanity [12]. Before 2000, China’s crude steel production amount showed relatively stable growth. However, starting in 2001, with China’s accession to the World Trade Organization and the subsequent surge in trade, China’s crude steel production amount began to surge. It increased from 150 million tons in 2001 to 1.019 billion tons in 2023, and the trend is shown in Figure 1 [13,14]. According to data from the National Bureau of Statistics of China, the country’s steel exports amount to 91.201 million tons, accounting for 8.94% of the production amount in 2023. This indicates that China’s steel production primarily aims to meet domestic demand, and the economic condition heavily influences the crude steel production level.

2.2. Overview of Carbon Emissions and Challenges Ahead

Currently, the carbon emissions from the Chinese steel industry account for approximately 15% of the country’s carbon emissions. The primary use of blast furnaces and converters in production processes in China’s steel industry contributes to the high level of carbon emissions because this process relies on coal and coke as the reducing agent and source of heat. The energy consumption of various major processes and carbon emission factors of the main raw materials are given in

Table 1. Process energy consumption of steel enterprises in 2023.

	Sintering Process	Pellet Process	Coking Process	Blast Furnace Process	Converter Process	Rolling Process
kgce/t	54.95	24.35	90.26	376.40	−12.27	54.75

and Figure 2 [15,16,17]. In recent years, the carbon dioxide emission from the Chinese steel industry has continued to increase, and the trend is shown in Figure 3. Until 2022, the carbon dioxide emissions from the Chinese steel industry had reached 1.823 billion tons [18,19,20,21].

The Chinese steel industry faces several challenges in reducing carbon emissions [1,22,23,24]: (1) Increasingly stringent carbon emission regulations. Since 2021, the Chinese government and relevant departments have introduced a series of policies requiring steel enterprises to reduce carbon emissions. For example, “The Guiding Opinions on Promoting the High-Quality Development of the Steel Industry” emphasizes the need for the steel industry to achieve carbon peaking before 2030. (2) Imbalanced low-carbon technology levels among enterprises. Some leading steel companies have already reached or are close to world-class levels in terms of equipment and key technologies. However, some companies still have relatively outdated equipment and technologies, leading to high energy consumption and emissions. This imbalance hinders carbon reduction efforts in China’s steel industry. (3) Lack of unified national low-carbon technology research and application plan. The Chinese steel industry has made significant progress in low-carbon technology recently. However, the development is still unbalanced. It is necessary to prioritize applying and develo** universally applicable low-carbon technology. Mature and highly applicable low-carbon technology should be promoted and widely adopted as soon as possible.

2.3. Predictions on China’s Steel Production Amount and Regional Distribution Changes

Whether or not the carbon emission can peak quickly depends on the amount of crude steel production. Although the crude steel production amount in China started to decline in 2022 and may enter a sustained slow decline, however, to support the sustainable development of emerging economies and China’s urbanization process, the steel industry will still maintain a large production amount in the future. It is projected that, by 2050, China’s crude steel production amount will decrease to 600 million tons; the trend is shown in Figure 4 [25]. To realize the sustainable development of China’s steel industry, we must focus on develo** low-carbon and zero-carbon technology. It can contribute to national carbon neutrality goals by achieving carbon neutrality within itself.

The future production layout of crude steel in China will primarily depend on factors such as the place of crude steel consumption and ore production, the costs of hydrogen energy, transportation, and carbon capture and storage (CCS). Under deep decarbonization, the Chinese steel industry will mainly be concentrated in the northern regions by 2050 [26]. The crude steel production amount has significantly increased in ** ** the social economy. Therefore, the steel industry’s low-carbon development is society’s responsibility. It is necessary to provide financial and policy support for the research of low-carbon technology from the national level and to promote the study of low-carbon technology by establishing a national-level industrialization experiment platform.

(3)

Select key technologies for research by process

Long processes currently dominate China’s iron and steel smelting, but the proportion of short processes will significantly increase, eventually forming a complementary situation. Therefore, research on low-carbon technology in the steel industry should be carried out using long and short processes. The development of carbon reduction technologies based on long processes is of great significance to the carbon peaking and initial carbon reduction of China’s steel industry, while the development of low-carbon technologies based on short processes is of decisive importance to realizing carbon neutrality in China’s steel industry.

(4)

Establish new research co-operation model

China’s government attaches great importance to the goal of carbon peaking and carbon neutrality, so the relevant departments should play a leading role in the research of low-carbon technology. The research of low-carbon technology in the steel industry should be aimed at engineering applications, and enterprises, design institutes, and engineering companies in the leading position in the industry play an important role in the research of low-carbon technology. The research on low-carbon technology must rely on the proposal of original technology, which comes from a large amount of basic research. Therefore, it is inseparable from the active participation of universities and research institutes. The research work requires a large amount of workforce and material resources, and it is also essential to ensure the stability of funding channels and balance the relationship between inputs and benefits. Organizational models used in the European Union (EU) and Japan for metallurgical process development, such as Ultra Low CO₂ Steelmaking (ULCOS), CO₂ Ultimate Reduction in Steelmaking process by innovative technology for cool Earth 50 (COURSE50), etc., can be referenced, with efforts to mobilize more positive factors.

6. Conclusions

(1)

China’s steel industry faces significant pressure to reduce carbon emissions with its massive production, its dominant reliance on coal for energy, and the primary use of blast furnaces and converters in production processes. The Chinese steel industry has limited potential to reduce process energy consumption alone to achieve carbon peaking and carbon neutrality. It relies on technological innovation and continues investing in low-carbon technology research.

(2)

China’s steel industry prioritizes dual-carbon goals, and companies and research institutions are taking significant action to achieve them. However, the development of high-efficiency carbon reduction technologies in China is in its early stages and relatively behind compared to other countries. It has yet to reach the level of industrial application, and there is still a significant gap in obtaining world-class carbon reduction technologies.

(3)

Many Chinese steel companies have not proposed clear dual-carbon plans, and more unified research activities are needed at the industry level. Companies should establish their dual-carbon plans, co-operate with relevant universities and research institutions in collaborative research, and strive to achieve dual-carbon goals as soon as possible.