Decarbonizing China’s iron and steel industry from the supply and demand sides for carbon neutrality

Abstract Iron and steel production in China contributes to 14% of China’s total energy-related CO2 emissions. Decarbonizing the iron and steel sector will therefore play an important role in achieving the goal of carbon neutrality. This study explored possible low-carbon transition pathways for China’s iron and steel industry to achieve carbon neutrality by 2050. An integrated approach was developed that combined a computable general equilibrium model and a bottom-up technology-selection module. The results indicated that although energy-saving technologies can reduce CO2 emissions in the short term, in the long term, adopting breakthrough technologies (e.g., carbon capture and storage (CCS) and hydrogen-based direct reduction (DR)), increasing the share of scrap-based electric arc furnace (EAF) steel production, and decarbonizing upstream energy-supply sectors will be crucial for climate change mitigation. Hydrogen-based DR could be an effective option for CO2 emission reduction in scenarios where CCS is not available, with its share increasing to 23%–25% by 2050. System-wide cross-sector decarbonization can help achieve climate targets at lower costs through flexible technology combinations and avoid carbon leakage into upstream energy-supply sectors.