Posted on 07 Jan 2022
During 2021, another 26 Chinese steelmakers were recognized by the China Iron & Steel Association (CISA) as meeting 'ultra-low' emission standards, a key component in the country's drive towards clean and low-carbon steelmaking. This took the total number of mills meeting the tough standards to date to 34, according to a posting in the CISA website. Several enterprises are wholly owned subsidiaries of the country's largest steel groups, Mysteel Global notes.
The 26 newly added to the list over the past year represents a marked improvement on the only eight recognized as meeting the standards throughout 2020. However, Beijing-based senior industry participant who has been tracking this issue was not surprised at the jump last year. "The time is very tight," he remarked candidly.
This is because for the past several years, the central government has emphasized that by 2025, its goal is for all steel mills located in so-called environmentally-sensitive areas - specifically North China's Beijing-Tianjin-Hebei region, the Yangtze River Delta, Pearl River Delta and the Fenwei Plain - should meet the standards, as Mysteel Global reported. For the entire country, 80% of the mills must meet these standards - and the enterprises now have only four more years in which to achieve it.
The 'ultra-low' emission standards, finalized by Beijing in April 2019, include caps on pollutant emissions during steelmaking processes and mandate requirements on raw materials stocking and on means of transportation, as reported. Chinese industry sources at the time said the criteria for meeting the standards were among "the toughest in the world".
The 34 steel firms publicized by CISA have fulfilled all the conditions for meeting the standards or part of them, according to a CISA official, and besides the 34, other makers might also have transformed their operations and satisfied the criteria but chose to have their facilities audited and their results verified by their local governments, rather than CISA. Consequently, their names will not be on the association's list, he observed.
Among the 26 steelmakers recognized in 2021 are China Baowu Steel Group's Zhanjiang works in Zhanjiang city, South China's Guangdong, with a steel capacity of 8.9 million tonnes/year, Hebei Iron & Steel Group's 7.5 million t/y Laoting works in Laoting county in North China's Hebei, and Anyang Iron & Steel Group in Central China's Henan province, with over 10 million t/y crude steel capacity.
Beijing has adopted series of preferential measures to encourage steel mills to extensively overhaul and upgrade their facilities to meet the 'ultra-low' emission requirements. Arguably the most attractive to steel firms these days is that those mills meeting the standards are exempt from having to comply with production curbs when others are ordered to do so in the winter months and during times when air pollution is heavy, especially in the environmentally-sensitive areas. Other incentives include discounts on power charges as well as reduced environmental taxes.
Such measures have certainly encouraged some mills to take action, the Beijing source agreed, but more importantly, "the local governments should play a key role" in compelling steelmakers to make sure the 2025 goal is achieved, he maintained.
Local governments need to strike a balance between "immediate tax payments from the steel producers and the (steelmakers') long-term and sustainable development," he said.
But he admitted that for some steelmakers, particularly small, regional producers, the enormous capital investment expenditure needed to upgrade facilities to meet the ultra-low emission requirements - usually calculated in billions of Yuan - is another factor hampering the transformation.
For example, Baowu's greenfield Zhanjiang steelworks invested Yuan 6.4 billion ($100 million) in environmental protection during the construction of the works over 2013-2015, Mysteel Global notes, and over 2019-2021, another Yuan 2.3 billion was allocated for the 'ultra-low' production systems upgrade of its No.1 and No.2 blast furnaces.
In sum, according to a report submitted by Zhanjiang Iron & Steel Company on the works' ultra-low revamp and published by CISA last December, the environmental protection costs have added another Yuan 257/tonne to the mill's production costs, and another Yuan 270/t increase in operating costs in running these eco-friendly facilities.
Picture: Baowu's Zhanjiang steelworks
Source: CISA website
In an industry meeting held last November, Wu Xianfeng, deputy director general of the air quality management department of Ministry of Ecology and Environment pointed out that progress towards 'ultra-low' transformation is slower in China's non-environmentally sensitive areas.
"In the few major steel provinces in the non-key areas, not a single mill has fully met the standards," he noted.
State-owned enterprises are also more proactive than privately-owned mills, he pointed out.
At the time of his speech, 19 steel producers whose combined steel capacity totaled 114 million tonnes/year had met all aspects of the 'ultra-low' standards and are all located in the environmentally-vulnerable areas. In the meantime, another 229 mills, operating 570 million t/y of steel capacity, had started upgrading work in order to meet the tough emission standards, according to Wu.
Source:Mysteel Global
