New Delhi

For the very first time since making landmark climate neutrality commitments in 2020, China did not permit any new coal-based steelmaking projects in the first half of the year, according to a report released Thursday. This marks quite a blunt move in the country's approach toward greenifying the industry.

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All 7.1 million tons of the annual steelmaking capacity approved by provincial governments in the first half of the year used electric arc furnaces, running on recycled scrap and electricity, and hence are a cleaner alternative to traditional coal-based methods, according to a report by the Center for Research on Energy and Clean Air.

The steel sector accounts for the second-largest source of China's carbon emissions at about 15 per cent, making the sector key to Beijing's 2060 goal for carbon neutrality. In recent years, Beijing has been seeking to clamp down on crude steel output and promote cleaner steelmaking technologies. However, challenges remain as mills are under pressure with low margins amid a sluggish economy.

According to CREA, this move might just be the signal step in China's decarbonisation of steel. This alone could help China slash 200 million tons of carbon dioxide emissions from the steel industry by 2025—representing a 10 per cent decrease from its peak in 2020, said the research organisation.

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In May, the world's largest steel consumer announced a new action plan for the sector covering 2024-2025, aiming to reduce a total of 53 million tons of emissions and severely restricting low-value iron and steel exports.

“As China’s steel demand peaks and more scrap becomes available, it brings us a major opportunity to reduce emissions over the next 10 years,” Xinyi Shen, the lead author, said in the report.

China has taken proactive steps to reduce coal-based steel projects and promote cleaner alternatives, underlining the commitment to long-term environmental goals despite economic challenges. It can indeed turn the tide of global efforts toward fighting climate change.