China introduces new environmental restrictions for industrial giants

Beijing announces expansion of emissions trading system to cover more than 60% of the country's CO2

China is expanding its emissions trading system to include the steel, cement, and aluminum industries. This is reported by Reuters.

This means that another 1,500 companies will have to buy carbon credits to cover their emissions. Thus, the total amount of carbon dioxide emissions covered will reach 8 billion tons, which is more than 60% of the country’s total emissions, said Pei Xiaofei, a spokesman for the Ministry of Environmental Protection.

Launched in 2021, China’s emissions trading system previously covered only the energy sector, controlling about 5 billion tons of CO2 from more than 2,200 companies. Now it will become an important tool not only for achieving the country’s climate goals, but also for industrial modernization.

Initially, only the most inefficient companies in new sectors will be required to buy additional allowances. However, over time, free permits will be reduced, stimulating the adoption of low-carbon technologies. The government promises that the pace of the allowance reduction will be gradual to avoid a sharp economic impact.

As GMK Center reported earlier, in 2024, total emissions in China’s steel industry increased by 4.1% compared to 2023. Increased liquidity of blast furnace capacity compared to electric arc furnaces increased emissions in the industry despite a decline in annual steel production.

Steel production in China last year decreased by 1.7% year-on-year – to 1.005 billion tons. This is the lowest level in five years. 2024 is likely to be the last year when steel production in China exceeded 1 billion tons.