Achieving low carbon finance of the iron and steel industry in China

Abstract

As a key sector characterized by high energy consumption and carbon emissions, the low-carbon transition of the iron and steel industry is crucial for achieving national emission reduction targets. Although China's iron and steel industry has made some progress in reducing total energy demand through capacity control, it still faces challenges in terms of technological paths toward industrial decarbonization. Financing low-carbon technologies during the transition process will have to deal with significant funding gaps and a capital structure mismatched with technological development. We propose policies and methods to promote financing for the iron and steel industry’s low-carbon transition. We suggest strengthening public investment guidance, promoting green financial policies, and innovating carbon finance instruments. Emphasis should be placed on the role of policies such as green credit, carbon pricing, and R&D subsidies, while highlighting the importance of integrating financial policies with technology and flexibly adjusting them throughout the "financing lifecycle".

Keywords

Steel / low-carbon transition / mitigation technologies / carbon finance

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