China needs to cut 2025 steel output to meet decarbonisation target, report says
The global steel industry is responsible for around 8% of the world's carbon dioxide emissions and China accounts for more than half of global steel output.
If China could meet its target of producing 15% of steel from electric arc furnace facilities this year, it could cut CO2 emissions by more than 160 million tons, nearly equivalent to the European Union steel sector's carbon footprint, analysts at the Helsinki-based Centre for Research on Energy and Clean Air said.
China has lagged far behind its global peers in terms of electric arc-furnace steel share. The average share is around 30% globally, 71.8% in the United States, 58.8% in India and 26.2% in Japan, the centre said.
From 2021 to the first half of 2025, China's blast furnace capacity utilisation rose from 85.6% to 88.6%, while electric-arc furnace utilisation fell from 58.9% to 48.6%, it added.
"A credible strategy to curb emission-intensive production and rein in excess capacity would not only tackle the sector's structural issues but also ease global tensions," said Belinda Schaepe, an analyst at the Helsinki-based centre.
China produced 1.005 billion tons of crude steel in 2024, with around 90% from blast furnace facilities.
China's steel sector has been plagued by overcapacity, which has depressed prices and sparked growing protectionist backlash from global trade partners amid its burgeoning steel exports.
The cleaner electric arc facilities have faced headwinds of high power costs, unstable scrap supply and growing losses.
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