China’s steel industry enters a new phase of carbon reduction

China's iron and steel industry will soon be included in the carbon trading system, becoming the third key industry to be included in the national carbon market after the power industry and the building materials industry. by the end of 2024, the national carbon emissions trading market will incorporate key emitting industries, such as iron and steel, to further improve the carbon pricing mechanism and accelerate the establishment of the carbon footprint management system.

In recent years, the Ministry of Ecology and Environment has gradually revised and improved the carbon emission accounting and verification guidelines for the iron and steel industry, and in October 2023, it issued the “Instructions for Enterprises on Greenhouse Gas Emission Accounting and Reporting for Iron and Steel Production”, which provides strong support for the unified standardization and scientific development of carbon emission monitoring and measurement, accounting and reporting, and verification management.

After the iron and steel industry is included in the national carbon market, on the one hand, the pressure of fulfillment costs will push enterprises to accelerate transformation and upgrading to reduce carbon emissions, and on the other hand, the resource allocation function of the national carbon market will promote low-carbon technological innovation and drive industrial investment. Firstly, steel enterprises will be prompted to take the initiative to reduce carbon emissions. In the process of carbon trading, high-emission enterprises will face higher fulfillment costs, and after being included in the national carbon market, enterprises will increase their willingness to reduce carbon emissions independently, increase energy-saving and carbon-reducing renovation efforts, strengthen investment in technological innovation, and improve the level of carbon management in order to reduce the fulfillment costs. Secondly, it will help iron and steel enterprises to reduce the cost of carbon emission reduction. Third, it promotes low-carbon technology innovation and application. Low-carbon technology innovation and application play a key role in promoting the low-carbon transformation of iron and steel.

After the iron and steel industry is included in the national carbon market, iron and steel enterprises will assume and fulfill a number of responsibilities and obligations, such as accurately reporting data, proactively accepting carbon verification, and completing compliance on time, etc. It is recommended that iron and steel enterprises attach great importance to enhancing their awareness of compliance, and proactively carry out relevant preparatory work to proactively respond to the challenges of the national carbon market and grasp the opportunities of the national carbon market. Establish the awareness of carbon management and reduce carbon emissions independently. Establish carbon management system and standardize carbon emission management. Enhance the quality of carbon data, strengthen carbon capacity building, and improve the level of carbon management. Carry out carbon asset management to reduce the cost of carbon transition.

Source: China Industry News