China's State Council issues the 2024-2025 Energy Conservation and Carbon Reduction Action Plan, involving steel industry

The State Council has issued the “2024-2025 Energy Conservation and Carbon Reduction Action Plan,” which proposes a 25% reduction in unit energy consumption and a 3.9% reduction in unit carbon dioxide emissions in 2024. Regarding the steel industry, the action plan calls for strict implementation of steel capacity replacement, prohibiting the addition of new steel capacity under the guise of mechanical processing, casting, ferroalloy, etc., and strictly preventing the resurgence of “ditiao steel” capacity. “Ditiao steel” is a Chinese name for low-quality steel produced in intermediate frequency furnace with steel scrap as raw material. In 2024, the regulation of crude steel production will continue. Regions that have lagged in achieving energy conservation and carbon reduction targets in the first three years of the “14th Five-Year Plan” period (2021-2025) are, in principle, not allowed to increase iron capacity in the last two years of the period. New and expansion steel smelting projects must meet benchmark energy efficiency levels and achieve A-level environmental protection performance. The action plan strives to increase the proportion of electric furnace steel in total crude steel output to 15% and increase the consumption of steel scrap to 300 million mt by the end of 2025.