The Chinese government and the country's iron and steel industry association have been pushing for the sector's adoption of the national compliance emissions trading system in 2024, but critical challenges remain as most producers are unfamiliar with carbon asset management and cannot afford a high carbon price given thin profit margins.
China launched its ETS in July 2021, which currently only covers the power sector. There have been many politicians and industrial stakeholders calling for an accelerated ETS expansion to include other emissions-intensive sectors, especially those liable under the EU's Carbon Border Adjustment Mechanism, like cement, aluminum, iron and steel.
Earlier in 2024, the Ministry of Ecology and Environment or MEE released for public consultation emissions accounting and reporting guidelines targeted toward the cement and aluminum sectors, paving way for their inclusion in the ETS. However, the guideline is yet to be released for the iron and steel industry due to its long list of products and sophisticated emissions accounting procedures.
A spokesperson for the China Iron and Steel Association or CISA told state media China Environment News June 6 that "the iron and steel sector is expected to be included in the national ETS this year after a series of early-stage preparations, following the government's call."
