Chinese steelmakers received approvals from provincial authorities to invest about $100 billion in new coal-based mills over the past two-and-a-half years, according to the Centre for Research on Energy and Clean Air.
Emissions from the plants, if fully operated, would be equal to the total from the Netherlands, the independent think-tank on air pollution said in a report released Tuesday. The new mills risk becoming “stranded assets” as Beijing’s goal of carbon neutrality by 2060 will require the early retirement of such facilities, it said.
The global steel industry accounts for around 7% of carbon emissions, and China produces more than half of the world’s supply of the metal. Efforts to shift to so-called green steel, where the metal is made using renewable energy, will be vital to slow the pace of global warming.
There has been “budding progress” on investing in Chinese steel mills that are less carbon-intensive, CREA said. However, coal remains the dominant source of energy, accounting for 99% of the new iron-making capacity and 70% of the steel-making capacity, it said.
“Without strong regulatory measures or demand-side requirements, steelmakers are likely to continue using their current production methods,” CREA said. “The cost and financial implications of transitioning to cleaner technologies, combined with the lack of clear incentives, can deter companies from voluntarily adopting decarbonization measures.”
(By Liz Yee Xing Ng)
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