China’s expansion of coal-powered steel mills accelerated sharply in the first half of 2021, exposing the government’s reluctance to sacrifice industry-fuelled growth to achieve its climate goals.
Analysis of Chinese government approvals by the Centre for Research on Energy and Clean Air, a Finland-based advocacy group, found that 18 steelmaking blast furnaces and 43 coal-fired power plants were announced in the first half of this year.
As steel prices surged, 35m tonnes of coal-dependent ironmaking capacity was announced in the first half of 2021, more than in all of 2020, CREA found.
If built, the combined coal and steel projects would emit about 150m tonnes of carbon dioxide per year, equivalent to the total emissions of the Netherlands.
The increase in blast furnace approval suggested that the “steelmakers haven’t gotten the memo yet” on carbon emission reduction, Lauri Myllyvirta, lead analyst at CREA, said. The sector will probably miss a 2020 target of limiting output in 2021 to the same level as last year.
Because steelmaking is the second-largest source of China’s carbon emissions, “I don’t see the maths for getting to carbon peak by 2030 without a 30 per cent reduction from steel”. The most plausible way for that to happen, he said, was by reducing output.
Coal-fired plants met China’s soaring power demand