China’s release of more conservative peak emissions target for its steel industry have raised concerns that its overall aim to hit the mark by 2030 could be at risk, according to industry insiders. Chinese authorities said last week that its steel industry, the world’s biggest, should reach peak carbon emissions before 2030 – five years later than the China Iron and Steel Association’s previous target. The new targets were issued in joint guidelines by the Ministry of Industry and Information Technology, the National Development and Reform Commission and the Ministry of Ecology and Environment. In the guidelines the ministries also looked at ways to improve production efficiency and reduce resource consumption. China’s steelmakers key to reaching climate goals, report says However, a draft plan issued by the association put the steel sector on track to reach peak emissions by 2025 and to reduce them by 30 per cent by 2030, state-run Economic Information Daily reported in December. Li Shuo, a global policy adviser for Greenpeace East Asia, said the new timeline was surprising but pointed to bigger concerns. “It’s rather conservative and reflects [Beijing’s] concern over economic stability and energy security,” Li said. “It puts China’s commitment to peak before 2030 in question. For that to happen, sectors such as steel will need to peak much earlier to make space for sectors such as transport that will inevitably peak later.” China issues plan for path to peak emissions and carbon neutral goal The steel industry is the country’s second-biggest emitter of carbon dioxide – accounting for 15 per cent of the national total – and reducing its emissions will be critical for China to achieve its climate targets. The power sector is the biggest emitter, producing about 40 per cent of the total. Chinese President Xi Jinping pledged in 2020 that China aimed to reach net-zero emissions by 2060 and peak carbon emissions before 2030. Key industries such as power and steel are supposed to hit peak carbon emissions earlier and make space for industries that are still growing and hard to decarbonise, such as buildings. Despite the extended timeline, China will strictly prohibit the net addition of new steel capacity and continue to allow capacity swap – the replacement of old capacity with new steel mills, according to the guidelines released by the three ministries. More than 80 per cent of China’s steel capacity should complete ultra-low emissions reform by 2025. That compares to 60 per cent of the nation’s crude steel production in 2021 which has been completed or is undergoing the reform. Meanwhile, China aims to increase output from electric arc furnaces to account for over 15 per cent of its total crude steel production by 2025. Scrap-based EAFs have lower emissions and accounted for around 10 per cent of China’s total steel production in 2020. However, some experts estimated that the steel industry could hit peak carbon emissions much earlier than the government’s plan. Yang Fuqiang, a researcher with Peking University’s Institute of Energy, said the Chinese government’s plans tended to be conservative and many of them could be overachieved. He estimated that the steel sector, as well as the nation’s industrial sectors, could reach peak carbon emissions around 2025. Carbon emissions from buildings might keep increasing because of urbanisation and heating, and hit peak emissions around 2028, he said. Lauri Myllyvirta, lead analyst at the Helsinki-based Centre for Research on Energy and Clean Air, said unless steel output started growing again dramatically, the measures would ensure the industry’s carbon dioxide emissions peaked before 2025. “The ban on net capacity additions, if finally truly enforced, would mean that there is limited headroom for steel output to grow,” he said on Twitter. “So the elements are there for emissions peaking and rapid reductions but I fear the leadership just isn’t prepared to commit yet to the macroeconomic path that would decouple steel use and construction activity from GDP growth, however much that aligns with long-term goals.”