SHANGHAI, Mar 10 (SMM)—The Two Sessions proposed to formulate an action plan for peaking carbon emissions by 2030, optimise the industrial structure and energy structure, and reach the rapid development of carbon peaking and neutrality.
SMM view: In the short term, the most direct way to achieve carbon peak and neutrality is to reduce crude steel production and develop green and clean steelmaking processes. Electric steelmaking is undoubtedly with the lowest pollutant emission. Compared with the long process production, the short process of the electric furnace can reduce 95% of waste gas emissions, 65% of solid waste emissions, 33% of waste water emissions and 61% of total emissions. The advancement of "carbon peaking and neutrality" will further accelerate domestic development of electric arc furnace steelmaking, update electric arc furnace models, and improve productivity and competitive advantages. These measures will increase the utilisation of steel scrap and benefit the long term development of steel scrap.
In December 2020, MIIT issued the "Guiding Opinions on the High-quality Development of the Iron and Steel Industry" (Draft for Comments). It is proposed that in 2025, the steel output from electric furnace will account for over 15% and near 20% of the total crude steel output. The steel scrap ratio will reach 30%. In addition, 5 to 10 benchmarking companies will be selected from short-process steelmaking companies and steel scrap processing and distribution companies to form a scalable industrial model.
SMM view: Judging from the national policy guidance and industry development trends, electric furnace steel and its closely related steel scrap industry will embrace development opportunities in the future. The steel scrap resource system will be more complete, and the management of the steel scrap will be standardised. In addition, China’s steel scrap processing equipment has achieved localisation, large-scale, and serialisation, and will be improved in intelligence, standardisation and green low-carbonisation in the future. The steel scrap processing industry will gradually extend to the recycling, dismantling, processing and classification of scrapped cars, home appliances and ships, non-ferrous metal sorting and processing, tailings waste sorting and treatment, and the integrated treatment of dust removal and purification treatment for environmental protection.
Policies for steel industry in the context of carbon peaking and neutrality:
Although clearer time targets have been put forward, the specific implementation rules and plans have not been announced. According to the relevant information, the policies may include following orientations:
To reduce crude steel output: MIIT has repeatedly proposed to achieve a year-on-year decline in crude steel production. The production cut can reduce carbon emissions and adjust the distorted profit distribution in the industrial chain. However, considering the gap between supply and demand, the demand side may also see reforms to prevent large fluctuations in steel prices.
To shut down small blast furnaces and tilt resources toward high-quality production capacity: Small blast furnaces have high unit carbon emissions, and it will be effective to reduce carbon emissions by shutting them down. This has been reflected in Tangshan's air pollution control plan for March.
To accelerate the development of short-process steelmaking: The emission per ton of steel produced by the short process is only about 0.9 mt, which is less than half of the long process production. Therefore, the development of the short process of steelmaking has a significant effect on reducing carbon emissions.
Most domestic steel production capacities are located in north China. Tangshan is under huge carbon emission pressure as the major steel production site. In the past, the regional imbalances and outstanding environmental protection issues can be solved by replacing production capacity in different places. But in the future, under the requirements of carbon peaking and neutrality, other provinces are unlikely to accept new steel production capacities, and some of Hebei's production capacity may be replaced.