Specialists of the Center for Research on Energy and Clean Air (CREA) in their report said that China has not approved a single new coal-based steel project for the first half of 2024. They are confident that in this way the country is accelerating its transition to "green" production, as it prepares for the impact of the cross-border carbon adjustment mechanism (CBAM) on exports to Europe.
This is reported by Euractiv.
CREA reported that local governments approved 7.1 million metric tons of new steelmaking capacity from January to June, but all of them were intended for projects using cleaner scrap-based electric arc furnaces (EDPs), rather than coal-fired blast furnaces.
Experts have suggested that China could reduce CO2 emissions from the steel industry by 200 million tons by 2026, reducing production and recycling more scrap through electric steel furnaces. They stated that this amount is equal to all emissions of the EU steel sector.
China's steel industry is the largest in the world and is under increasing pressure to decarbonize, according to a report by CREA researchers. It is expected to join China's own emissions trading scheme (ETS) this year, and from next year exports to Europe will be subject to the cross-border carbon adjustment mechanism, CBAM, which could raise its cost by 11% by 2030.
"Chinese steel producers targeting the EU market will need to take steps to reduce the carbon intensity of their products to remain competitive," said Xinyi Shen, co-author of the report.
China's steel industry could face 5.9 billion yuan ($811.09 million) in total CBAM charges by 2030, depending on how much it cuts emissions, according to researchers at China's Institute for Global Decarbonization Progress.
Earlier, EcoPolitic reported that China published new rules for the national carbon market and plans to implement carbon footprint management system by 2027.
