A green transition in the steel sector will take time-be patient!

Key to hitting China’s 2060 carbon neutrality target is transforming the iron and steel sector, which emits the most carbon of China’s manufacturing sectors – and approximately 15 per cent of national carbon emissions.

Long-process steelmaking predominates in China, accounting for 90 per cent of output. Globally, this coal-intensive process accounts for 73 per cent of output.

According to a 2021 Rocky Mountain Institute report, only around 30 per cent of US steel is made this way. Europe also predominantly employs short-process steelmaking, which is less coal-intensive. China’s steel-generated CO2 emissions are therefore far higher.

Chinese steel is still expanding and consumes more coke than any other sector in the country. As such, the industry’s emissions continue to rise.

The usual approaches to decarbonising steel focus on energy-efficiency improvements and deploying low-carbon technologies in the production process. But other approaches eliminate carbon altogether. “De-coaling at source”, for example, refers to the use of renewable energy to electrify hydrogen-based production methods that don’t require coke.

However,? the challenges facing the sector are numerous. ?One impediment to these aims is the relatively young age of China’s steelmaking blast furnaces. The average age of the country’s fleet is 13 years, but the typical operational lifetime of such furnaces is more than triple that. Forcefully imposing a transition would risk the widespread stranding of these assets.

Technological transition itself may be tricky but achieving it while maintaining socio-economic stability and simultaneously creating favourable developmental conditions on the ground is a hugely complex balancing act.

The socio-economic impact cannot be simply overlooked. If a country, state or even city rely on steelmaking for their prosperity, simply stopping the mills will result in economic ruin. Unemployment will rocket, businesses that depend on consumer spending will ?fall into poverty, and essentially a ghost town will emerge.

Creating a just, equitable transition into cleaner, more sustainable solutions is the answer. But for this financing must be put in place from all societal sectors. Things are changing – but as the old saying goes “Rome was not built in a day” so the same is true for achieving net-zero.

Actions now need to be louder than words, but change is happening, albeit more slowly than some quarters are demanding.

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