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China’s steel industry is young compared to Europe’s, and its transition to net zero may be slower as it takes a different path to reach government-mandated decarbonization goals, according to BHP Group Ltd.’s chief executive officer Mike Henry.
While certain unique factors have led European steelmakers to make faster plans to carbon neutrality, China may be at a disadvantage in the global race to remove carbon from heavy industry because its blast furnaces are younger and not due for retirement anytime soon, Henry said in remarks prepared for delivery at the China Development Forum in Beijing on Sunday.
Steel making accounts for roughly 8% of global carbon dioxide emissions. China produces approximately 50% of the world’s steel, with a goal to replace 15% of its output with electric arc furnaces by 2025.
Europe is replacing its traditional coal-fired blast furnaces with electric arc furnaces and recycling vast reserves of scrap steel, Henry said. China however is continuing to add steel on a net basis, meaning the availability of scrap is low.
“Given younger, less carbon intensive blast furnaces, and less scrap availability, Chinese steelmakers are understandably looking at continuing to use these assets rather than replacing them earlier than otherwise would be the case,” the top executive of the world’s biggest miner said.
Manufacturers in China are showing their commitment by using technologies such as hydrogen injection, and carbon capture, utilization and storage to offset rising amounts of greenhouse gas emissions, he said, adding BHP is supporting such efforts through several partnerships.
“China’s willingness to open up to the world, and the world’s willingness to work with China” is integral to the future of energy, he said.
(By Paul-Alain Hunt)
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