RMI Releases Report that Maps the Pathway for China to Pursue Zero-Carbon Steel

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BEIJING, Oct.2, 2021 /PRNewswire/ — On Sep.29th, RMI releases its latest report, Pursuing Zero-Carbon Steel in China—A Critical Pillar to Reach Carbon Neutrality, which analyzes the specific path of China’s steel industry to reach zero-carbon by 2050. The report finds that it is technically and economically feasible for the steel industry to decarbonize through demand reduction, steel recycling and switching to green routes.

China produces and consumes more than half of the world’s steel, accounting for about 17 percent of the country’s carbon emissions. This makes the steel industry the country’s second largest carbon emitting sector. The decarbonization of China’s steel industry will be a significant contribution to the country’s dual-carbon goals and the world’s carbon reduction goal.

The report, as one of the first in China to provide a decarbonization roadmap of the steel industry, makes a preliminary analysis of the energy consumption structure of China’s steel industry. It estimates that under the zero-carbon scenario, China’s steel demand will accelerate to peak and decline rapidly, and the product structure, energy consumption structure, and production process will undergo great changes. The report maps out three steps for the industry’s decarbonization.

  • Demand reduction: Under the zero-carbon scenario, China’s steel production will peak in 2024 and decline to 621 million tons per year in 2050—40 percent lower than the 2020 level. The main reasons for the decline are new phases of industrialization and urbanization. The peaking and declining of the steel industry are further accelerated by the carbon emissions reduction target, which is a new constraint.

  • Steel recycling: China’s secondary steel production will change from a supporting role to a mainstay, accounting for up to 60 percent of total steel production by 2050. The transformation of secondary steel from a supporting role is driven by China’s steel stock and scrap resources security, as well as potential favorable costs in the future through supportive policies as the scrap recycling market gradually matures.

  • Switching to low-carbon alternatives: Hydrogen direct reduced iron, smelting reduction with coal or hydrogen, and carbon capture and storage will all be important green steelmaking routes to China. These methods will produce 250 million tons in total by 2050, resulting in a significant decrease in fossil-fuel-based steel production, from 90 to 20 percent.

To read the report, visit RMI website at: https://rmi.org/insight/pursuing-zero-carbon-steel-in-china/


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