On June 25, the participants attending the annual meeting of the Low-Carbon Work Promotion Committee of the Steel Industry and the third Conference on Green and Low-Carbon Development of the Steel Industry in Rizhao, Shandong, reached a consensus that the global steel industry’s green and low-carbon transformation is a systemic change, which has now entered a critical period.
Three main pathways towards low-carbon steel production by 2030
In particular, the China Iron and Steel Association (CISA) suggested that the process of structure adjustment should be gradually implemented during the process of production reduction. For example, the low carbon development working team of CISA pointed out that three major metallurgical processes will face adjustment: the long steelmaking process of blast furnace-converter will gradually transit to the production of flat products, especially steel sheet, medium steel plate and other high-end steel plate, mainly located in the coastal deep water port area; the all-scrap consumption electric furnace will replace the small and medium blast furnace-converter to produce rebar and wire rod; the hydrogen reduction-electric furnace process is still in the exploration and development stage, while enterprises with conditions could carry out the related industrialization research and testing. It is expected that by 2030 the three processes mentioned above will account for 80-90 percent, 10-20 percent and three percent of the overall steel production in China.
Use of recycled raw materials should be encouraged through tax regulations
However, the management and application level of scrap is considered to be not commensurate with the position of scrap in the national economy. Thereby, CISA suggested China “take scrap as a strategic resource into the National Economic and Social Development Five-Year Plan Outline, while accelerating the pace of promoting the industrialization of scrap processing, regionalization, product development, and establishing a scrap recycling-categorization-processing-distribution system that is adapted to the steel industry layout in China.” The working team also recommended the clarification of the method of accounting for income tax of scrap recycling enterprises, the study of a preferential VAT policy for imported recycled steel raw materials, and the study of the improvement of the tax rebate ratio of steelmaking furnace materials to increase the incentive to use recycled raw materials.