China steel firms lagging on carbon compliance: study
Chinese steel companies have fallen behind their international counterparts on energy efficiency and carbon compliance, putting them at risk of a surge in costs once regulations are tightened, a research report published on Wednesday said.
The study by London-based CDP, formerly known as the Climate Disclosure Project, showed that Chinese steel firms were among the industry’s worst performers on measures like carbon intensity, water and energy efficiency, and transparency.
The findings suggest that mills in China, the world’s biggest steel producer, have been able to secure price advantages as a result of their slower shift to low-carbon production, but they will be more exposed to rising costs under a carbon trading scheme.
China’s aims to launch its long-awaited national emissions trading scheme next year, forcing companies to buy permits to cover their emissions. The steel industry is slated for the second stage of the scheme, although some firms have already been part of pilot carbon trading platforms.
“China has traditionally had lower steel production costs than other steel producing regions such as Europe due to lower labor and raw material costs,” said Luke Fletcher, a senior analyst at CDP’s Investor Research Department.
