Building up scrap steel bases for perfecting scrap steel industry chain in China: An evolutionary game perspective

Abstract

China has stated that it will strive to reach the carbon peak by 2030 and achieve carbon neutrality by 2060 Carbon emissions. Steel industry as the largest manufacturing industry could reduce carbon emissions by using more environmentally friendly ways to make steel. Short process steelmaking is an environmentally friendly method. Scrap steel as the main raw material of short process steelmaking should be popularized. However, several issues happening in the scrap steel industry chain may hamper the formation of scrap steel bases. Therefore, we establish a tripartite evolutionary game model between Steel enterprises, Scrap steel enterprises and the government. After solving the equilibrium points and the evolutionary stable strategy of each stakeholder by the replicator dynamics equation, we carry out simulation to get the behavior strategy of Steel enterprises, Scrap steel enterprises and the government. The results show that: (i) there are three evolutionary stability strategies for the formation of scrap steel bases, among which the participate of steel enterprises and scrap steel enterprises, less intervention of the government is a more appropriate choice. (ii) there is a threshold effect on relevant parameters, which may change the evolutionary stability strategy of stakeholders. (iii) the initial willingness of steel enterprises, scrap steel enterprises and government affect the convergence speed of the evolutionary stable strategy. These conclusions provide unique insights and theoretical support for promoting the development of scrap and steel industry in China and helping to realize the strategy of carbon peak carbon neutrality.