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Accelerating Industrial Decarbonization in China

Accelerating Industrial Decarbonization in China

Full Title: Accelerating Industrial Decarbonization in China: Key Climate Actions for Iron and Steel Companies
Author(s): Shuyi Li, Ting Li, Wei Li , Shutong (Lucy) Lu, Peishan Wang, and Boya Zhang
Publisher(s): RMI
Publication Date: June 18, 2024
Full Text: Download Resource
Description (excerpt):

The iron and steel industry, as one of the highest emitting sectors, will take 4.8%–10.9% of the global carbon budget, which is only 400 gigatons for the next 30 years for a 67% chance of staying within 1.5°C of warming. At the current pace of development and carbon emissions, the carbon budget projected for steel will be used up in 5–12 years. With more than half of the world’s steel production, China remains a key geography when it comes to steel decarbonization. Climate actions by Chinese iron and steel companies are critical not only to China’s carbon neutrality goal, but also to emissions reductions in the global iron and steel industry.

This report provides a comprehensive summary of international target-setting guidances, examining their boundaries and pathways under the 1.5°C climate goal by 2050. While global practices serve to guide Chinese iron and steel companies to set climate-aligned targets, an industry-level target broken down from China’s national goals of carbon peaking by 2030 and carbon neutrality by 2060 will help direct companies’ level of ambition and pace of transition. Moreover, companies can refer to the technological feasibility of carbon reduction levers to set practical climate targets.

Currently, while leading companies’ climate targets are in place, clarity and comprehensiveness remain core criteria to assess the targets’ effectiveness. As shown in Exhibit ES1, 28 of the top 50 global iron and steel companies have set some type of climate targets, of which 19 are committed to carbon neutrality, net zero, or climate neutrality. Among the 27 Chinese iron and steel companies, 7 have set carbon-neutrality targets, representing 28.4% of China’s steel production in 2022. The commitments from Chinese iron and steel companies signal a profound shift toward sustainable and green development.

All statements and/or propositions in discussion prompts are meant exclusively to stimulate discussion and do not represent the views of, its Partners, Topic Directors or Experts, nor of any individual or organization. Comments by and opinions of Expert participants are their own.

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