- CISA initiates low-carbon work promotion committee for the iron and steel industry
- Baosteel and Chongqing Iron & Steel have already participated in local carbon trading pilot schemes
- Average emissions per tonne of steel in the blast furnace is about 2 t, while for EAF it is about 0.6 t
China has pledged to peak carbon emissions by 2030 and attain carbon neutrality by 2060.
Carbon emissions by the steel industry account for about 18% of the overall manufacturing industry. Green and low-carbon steel has emerged as the core proposition in the transformation of the steel industry.
Following the power and building materials industries, steel has emerged as the third key industry to be included in the national carbon market.
After being included in the national carbon market, the China Iron and Steel Industry Association (CISA) has initiated the establishment of a low-carbon work promotion committee for the iron and steel industry, and plans to carry out the collection of special standards for peak carbon neutrality in the iron and steel industry. The scope of solicitation includes carbon emissions accounting, carbon emission limits, carbon capture, storage and utilisation, and other relevant standards for low-carbon technologies.
Getting through relevant procedures, clarifying standards and accounting methods is an urgent issue that the steel industry must solve before it officially enters the national carbon market and participates in carbon trading.
According to latest news from CISA, the Chinese steel industry has completed the first draft of the ‘Implementation Plan for Carbon Peaking in the Iron and Steel Industry’, which clarifies the industry’s peaking trajectory, key tasks and carbon reduction potential. Opinions from all parties have been solicited.
Shen Bin, President of CISA, has said that in H2 CY’21 the association will carry out research on carbon emissions in the steel industry, particularly research on carbon emissions in the lifecycle of steel products and formulate and release the ‘Roadmap and Action Plan for Carbon Peak in the Iron and Steel Industry’.
CISA will also organise efforts to conduct research on the carbon market quota allocation plan and operation test plan for the industry, while creating conditions for the industry to carry out carbon emissions trading.
Allocation of steel carbon quotas
China’s Ministry of Ecology and Environment issued the ‘Notice on Carrying out the Pilot Project of Environmental Impact Assessment on Carbon Emissions from Construction Projects in Key Industries’ and launched a pilot project for environmental impact assessment on carbon emissions, involving the steel industry.
The steel companies interviewed by SteelMint said that they had different industrial routes, different products as well as production conditions. To truly do a good job in carbon trading, in-depth and meticulous preparations are needed, especially the unification and improvement of relevant standards.
In fact, key steel companies such as Baosteel and Chongqing Iron & Steel have already participated in local carbon trading pilot schemes. Related companies and departments have completed carbon accounting methods, historical carbon emissions tally, carbon quota determination, etc., and formulated carbon emissions quota trading.
“The current steel carbon quota standard is not clear, but based on the preliminary information, the possibility of adopting the historical intensity decline method is very small. It is expected that the industry benchmark method will be used to establish the steel industry carbon quota benchmark,” head of Yonggang Group said in an exclusive interview, adding that if quotas are formulated with reference to the more advanced indicators of the industry’s single process, more consideration will be given to equipment and operating costs. More private enterprises may come under greater pressure.
Sources of emissions
According to the ‘Guidelines for Accounting Methods and Reporting of Greenhouse Gas Emissions for Chinese Steel Production Enterprises’ carbon emissions in the steel production process mainly come from four major sources: fossil fuel combustion emissions, industrial production process emissions, net purchases of electricity used, and carbon sequestration products.
Different steel production processes have large differences in carbon emissions. The average tonne of emissions per tonne of steel in the long process of blast furnace is about two tonnes, while the average emissions in the electric furnace production process is about 0.6 tonnes. Without changing the process flow, carbon emissions can be reduced by appropriately increasing the scrap ratio of the converter. For every 0.1 reduction in the iron-to-steel ratio, iron consumption drops by 100 kg per tonne of steel, and carbon emission drops by 164 kg, which is about 8.9%. Therefore, increasing the recycling of scrap steel resources, choosing steel production processes with lower carbon emission intensity, and reducing the ratio of iron to steel are effective ways of achieving emissions reduction.
Technology for the future
Li Xinchuang, Secretary of the Party Committee and Chief Engineer of the Metallurgical Industry Planning and Research Institute, said that the iron and steel industry should focus on optimising the layout and reducing ineffective logistics and transportation. Focus should also be accorded to saving energy and improving energy efficiency, especially the self-generation rate of iron and steel enterprises.
Improving the energy structure, raw material structure and process structure of the iron and steel industry and increasing the utilisation ratio of new energy sources such as wind and solar should be accorded primacy. It is also essential to promote the coordinated development of the steel industry and related industries. For example, the steel industry should help the chemical, construction and other industries to reduce emissions. The long-term focus is on advancing the technological revolution, which mainly includes hydrogen metallurgy and carbon capture.
Prices as on 9:00 IST, 25 Aug. d-o-d changes indicated against closing price of 24 Aug.
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