The steel industry has entered a new stage of "prioritizing energy conservation and carbon reduction".

The Ministry of Industry and Information Technology has officially issued the 15th Five‑Year Plan for Industrial Green and Low‑Carbon Development, setting clear quantified targets, institutional arrangements and implementation paths to peak industrial carbon emissions by 2030. Different from previous guiding policies, the new plan imposes rigid, actionable constraints on high‑energy‑consuming and high‑emission industries. Steel, as a core high‑carbon sector, faces upgraded supervision, structural adjustment and low‑carbon transformation pressure. Based on exclusive interviews with senior industry experts, this article sorts out the core policy signals and development trends for the global steel industry.

Seven Core Indicators Raise Strict Thresholds for Steel Decarbonization

The new plan defines seven expected indicators for industrial green and low‑carbon development, covering energy consumption, carbon emissions and renewable resource recycling. All indicators serve the overall goal of peaking industrial carbon emissions in 2030 with coordinated and mutually supportive evaluation standards.

Among all targets, two indicators bring the greatest challenges to the steel industry: a 10%+ drop in energy consumption per unit of industrial added value and a 17%+ drop in carbon emissions per unit of industrial added value.

Experts pointed out that these are overall industrial benchmarks, not exclusive steel industry standards, but steel, as a major energy and carbon emission source, bears the core pressure. To meet the energy consumption reduction target, steel enterprises must either reduce unit product energy consumption or increase output value per ton of steel.

At present, weak market demand and unstable profits make dual improvement extremely difficult. Most mainstream steel enterprises have reached a high energy efficiency level, leaving limited room for further energy saving. In addition, steel carbon emissions come from both fossil energy combustion and production process reactions, making pure energy‑saving measures insufficient to achieve decarbonization goals. Short‑process electric furnace steelmaking and other low‑carbon technologies have become mandatory transformation directions, despite high investment costs and long implementation cycles.

Eliminate Structural Contradictions: Optimize Steel Production Layout Instead of Blind Shutdown

The plan clearly proposes to steadily resolve structural contradictions in key industries including steel, and guide low‑carbon energy‑rich regions to undertake high‑quality steel industrial transfer. Experts emphasized that industrial structural contradictions are no longer simply overcapacity, but mismatches between industrial layout, energy structure, resource allocation and green development capabilities.

The steel industry’s structural problems are reflected in five dimensions: long‑term supply‑demand imbalance, unreasonable product structure with excess ordinary steel output and insufficient high‑end steel supply, low industrial concentration, dominant high‑carbon long‑process production capacity, and excessive capacity distribution in environmentally stressed areas.

The new policy does not mean loose capacity control or blind capacity expansion. The core adjustment of the new round of policies is shifting from quantity control to green layout control. All capacity adjustments must be carried out under total volume control, replacement constraints and carbon double‑control standards.

The state will adopt market‑oriented and legalized means such as capacity replacement, enterprise merger and reorganization, and process optimization to realize the unified development of capacity reduction, quality improvement and carbon reduction, while ensuring the stability of the industrial supply chain.

Upgraded Energy‑Saving Supervision: Full‑Cycle Data‑Based Precision Law Enforcement

The plan strengthens industrial energy‑saving supervision and law enforcement, marking a shift from traditional irregular inspections to standardized, data‑based and full‑process standardized supervision.

Future supervision will focus on three core directions: adhering to continuous standard compliance rather than simple problem rectification; taking carbon emission accounting, metering and data management capabilities as core assessment indicators; and implementing full‑life cycle management to achieve sustainable low‑carbon operation.

The steel industry will face unprecedented supervision intensity. From 2026 to 2027, national energy‑saving supervision will achieve full coverage of key steel enterprises, with special review mechanisms for unqualified enterprises. Penalties for non‑compliance will be significantly upgraded, including forced rectification and production suspension.

Supervision details will be further refined. Secondary energy measurement deviation, unclear energy consumption boundaries and mismatched production and energy data will become key inspection items. Enterprises are required to reach national mandatory energy efficiency standards and strive for industry benchmark levels to avoid operational risks.

New Rigid Constraints: Carbon Evaluation Becomes a Mandatory Threshold for New Projects

The country has built a five‑level carbon management system covering regional carbon assessment, industrial carbon control, enterprise carbon management, project carbon evaluation and product carbon footprint. Carbon emission evaluation has been officially incorporated as a rigid constraint for new and renovated high‑energy‑consuming projects, requiring equivalent or reduced carbon emission replacement.

New steel projects need to pass both energy consumption and carbon emission audits. The approval authority for energy‑saving review has been upgraded, and carbon emission replacement plans have become essential documents for project construction and acceptance. Local governments will strictly control new carbon increment, restricting blind expansion of high‑carbon capacity.

At present, the lack of unified carbon evaluation standards is the core bottleneck of industrial supervision. The China Iron and Steel Association is accelerating the formulation and revision of national standards for energy consumption, carbon emission limits and energy‑carbon efficiency evaluation, and compiling technical guidelines for carbon evaluation, laying a standardized foundation for industry‑wide carbon management.

Carbon Footprint Turns from Optional Item to Global Trade Access Threshold

2026 will be the first year for differentiated carbon quota allocation and substantial performance in the steel industry. Carbon indicators have been completely transformed from digital statistics into core operating costs.

Product carbon footprint disclosure and green supply chain certification have become mandatory requirements. Downstream leading enterprises in automobile, machinery and equipment industries have taken carbon footprint data as the core standard for supplier access and rating.

The steel industry is promoting full‑life‑cycle EPD environmental product declarations and low‑carbon steel evaluation standards, which are accelerating the transformation from industrial group standards to national standards. Low‑carbon, traceable steel products will become the core competitiveness of global steel trade in the future.

300 Million Tons of Scrap Steel Target: Boost Short‑Process Low‑Carbon Transformation

The plan sets a clear target of 300 million tons of annual scrap steel recycling volume by 2030. This target is formulated based on the growth of domestic steel stock, the demand growth of electric furnace steelmaking and the development trend of circular economy, releasing a clear policy signal of vigorously promoting steel resource recycling.

The state will tilt scrap steel and green power resources toward short‑process electric furnace steelmaking enterprises, effectively reducing reliance on imported iron ore and cutting industrial carbon emissions. The policy supports in‑depth cooperation between steel mills and scrap processing enterprises to build an integrated industrial chain of scrap recycling, processing and distribution, and improve the stability and quality of recycled raw materials.

In terms of overseas resources, the country adheres to the bottom line of zero solid waste imports and orderly opens the import channel for high‑quality recycled steel raw materials, helping domestic steel enterprises enrich raw material supply and optimize cost structure.

Zero‑Carbon Factory Construction: Dual Path of Long‑Process Optimization and Short‑Process Innovation

The plan proposes to cultivate 500 replicable zero‑carbon factories nationwide by 2030. Experts said that the combination of green power direct connection and full‑scrap electric furnace short‑process steelmaking will be the most feasible zero‑carbon transformation path for the steel industry.

Policy resource tilting toward short‑process steelmaking does not mean abandoning long‑process blast furnace steelmaking. The state supports the coordinated development of multiple low‑carbon technologies, including blast furnace hydrogen enrichment, oxygen enrichment and carbon cycle transformation, forming a diversified low‑carbon technology system.

In addition to single‑factory zero‑carbon transformation, steel enterprises will play a core role in regional industrial coupling. By relying on waste heat, residual pressure, gas recycling and solid waste collaborative utilization, steel mills can provide low‑carbon energy and raw materials for downstream industries, driving the coordinated decarbonization of the entire industrial chain.

Industry Competition Enters the Low‑Carbon Comprehensive Competition Era

Industry experts concluded that the 15th Five‑Year Plan marks a new stage for the steel industry shifting from single energy saving to balanced energy saving and carbon reduction. Future steel industry competition will no longer be limited to output, cost and market share, but focus on low‑carbon transformation capability and carbon management level.

Enterprises that take the lead in completing process optimization, carbon system construction and green product upgrading will seize the dominant position in global market competition and sustainable development.