{"id":11927,"date":"2025-09-08T10:00:00","date_gmt":"2025-09-08T00:00:00","guid":{"rendered":"https:\/\/testblogs.griffith.edu.au\/asiainsights\/?p=11927"},"modified":"2025-09-17T07:13:05","modified_gmt":"2025-09-16T21:13:05","slug":"analysis-chinas-newly-announced-steel-industry-work-plan-2025-26","status":"publish","type":"post","link":"https:\/\/testblogs.griffith.edu.au\/asiainsights\/analysis-chinas-newly-announced-steel-industry-work-plan-2025-26\/","title":{"rendered":"Analysis – China\u2019s newly announced steel industry work plan 2025-26"},"content":{"rendered":"\n

CHRISTOPH NEDOPIL<\/a>\u00a0 | <\/p>\n\n\n\n

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In late August 2025, five leading Chinese ministries issued the new Work Plan for Stabilizing Growth in the Steel Industry<\/a> (2025-2026). The work plan provides important signals for the next steps in one of China\u2019s core industries that deals with overcapacity and high climate emissions.<\/p>\n\n\n\n

Three messages stand out<\/h2>\n\n\n\n
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  1. Green and low-cost upgrading is central.<\/strong> Old plants will be phased out, while production facilities will be modernized with electric arc furnaces (EAF), hydrogen metallurgy, and new green metals standards. Preferential financing, including \u201cultra-long-term special government bonds and loans,\u201d will support these upgrades. Carbon accounting mechanisms will be expanded to integrate the sector into national and international carbon markets.<\/li>\n\n\n\n
  2. Overcapacity will be curbed through supply<\/strong>– and demand-side measures. Supply controls include a ban on new production capacity and limits on inefficient plant operations. Demand-side measures aim to expand applications for steel and promote high-end, specialized steel products.<\/li>\n\n\n\n
  3. Existing emission-intensive production will remain supported<\/strong> in certain areas. Long-term agreements with coking coal enterprises and imports will be promoted, while existing coke ovens are slated for upgrades.<\/li>\n<\/ol>\n\n\n\n

    Background<\/h2>\n\n\n\n

    China\u2019s steel industry is the world\u2019s largest, producing roughly 1 billion tonnes of crude steel in 2024\u201454% of global output (GMK Centre<\/a>). Overcapacity, exacerbated by China\u2019s prolonged real estate downturn, has depressed profitability across the sector. Steel and metals production (especially iron and steel) is highly emissions-intensive, accounting for 15\u201317% of China\u2019s total carbon emissions, second only to power generation. Against the background of Beijing\u2019s targets to peak emissions by 2030 and achieve carbon neutrality by 2060, green steel production needs to accelerate: electric arc furnace steel accounted for only 10% of total output in 2024, short of the 15% target for 2025 (Centre for Research on Energy and Clean Air<\/a>).<\/p>\n\n\n\n

    Decarbonizing the sector will require significant investment. Between 2026 and 2030, an estimated USD 18 billion is needed to scale EAF and direct reduced iron (DRI) shaft furnaces, as well as hydrogen electrolysers (Climate Bonds Initiative<\/a>).<\/p>\n\n\n\n

    China\u2019s steel decarbonizations policy drive<\/h2>\n\n\n\n

    Following China\u2019s 2030 emission peak and 2060 carbon neutrality announcement in 2020, policy instruments affecting the metals sector have steadily evolved:<\/p>\n\n\n\n