A bottom-up analysis of China’s iron and steel industrial energy consumption and CO2 emissions

Abstract

China’s steel industry has grown significantly since the mid-1990s, and has been the backbone of Chinese heavy industry. It is also the most energy intensive industrial sector in China, accounting for 16.1% of total energy consumption in 2010. To assess energy consumption and CO2 emissions from China’s steel industry, a system dynamics model and a bottom-up energy system model-TIMES (The Integrated MARKAL-EFOM System) were used to analyze steel demand, energy consumption and CO2 emissions from China’s iron and steel industry from 2010 to 2050. The model results suggest that steel production in China will rise from 627 Mt in 2010, to a peak of 772 Mt in 2020, and then gradually decrease to 527 Mt in 2050. The share of Electric Arc Furnace (EAF) steel production will also increase significantly from 9.8% in 2010, to 45.6% in 2050. With the deployment of energy conservation technologies, such as Coke Dry Quenching, exhaust gas and heat recovery equipment, energy intensity and CO2 intensity of steel production will keep decreasing during the modeling period. In the near future, reductions in energy intensity and CO2 intensity will rely more on energy efficiency improvements; however, from a long-term perspective, structural change-the increasing share of EAF steel production, will be of great significance.