Practical Actions Taken by Domestic Steel Industry Regarding CBAM

The domestic steel industry has taken a series of systematic practical actions to address the EU Carbon Border Adjustment Mechanism (CBAM), covering technical carbon reduction, data compliance, market layout, supply chain synergy, and policy participation. The following are illustrated with specific cases:

1. Technical Empowerment for Carbon Reduction, Promoting Frontier Process Demonstration

Steel enterprises take the research and application of low-carbon technology as a core strategy, accelerating the landing of processes such as hydrogen metallurgy and electric furnace short processes to reduce carbon emission intensity from the source.

• Hydrogen Metallurgy Demonstration: HBIS Group has completed a 1.2 million-ton hydrogen metallurgy demonstration project and achieved stable production, with a metallization rate of 94%, providing a benchmark for the industry's low-carbon transformation. Daye Special Steel, a subsidiary of CITIC Special Steel, has also put into use the country's first "hydrogen energy + pure oxygen" flameless combustion system, reducing CO2 emissions in the heating furnace process by 80% and process energy consumption by 20%.
• Developing Electric Furnace Steel: The industry consensus is that increasing the proportion of electric furnace short-process steelmaking is a key path to reducing carbon emissions per ton of steel. Data from the China Iron and Steel Association shows that the carbon emissions per ton of steel in the electric furnace process can be reduced by about 70% compared to the traditional long process. To cope with the cost pressure brought by CBAM, enterprises are actively increasing the proportion of electric furnace steel capacity.

2. Improving Carbon Data Management System, Proactively Aligning with International Rules

Enterprises are accelerating the establishment of carbon monitoring, reporting, and verification (MRV) systems that meet EU requirements, and using digital tools to enhance carbon footprint management capabilities to avoid the risk of using high default values.

• Building Smart Carbon Management Platforms: Daye Special Steel in Hubei relies on "AI + energy-carbon big data + power remote centralized control" to build a smart energy carbon emission control platform, achieving energy optimization and real-time monitoring of carbon emissions, and generating precise carbon footprint files for each batch of export products. Nangang Group in Jiangsu Province has independently developed a "Product Life Cycle Assessment (LCA) Platform," which can perform automatic carbon footprint accounting and intelligent control for its more than 900 products.
• Obtaining Authoritative Carbon Footprint Certification: Several products of Nangang Group (such as bearing steel, tire cord steel) have obtained ISO 14067 product carbon footprint certification, and its environmental product declaration (EPD) reports for wire rods and heavy plates have also been released on the China Iron and Steel Association platform, improving data transparency and international credibility.

3. Optimizing Market and Supply Chain Layout, Building Green Competitiveness

Enterprises diversify risks and enhance the overall low-carbon attributes of their products by expanding emerging markets and building green supply chains.

• Expanding Diversified Markets: While deepening their presence in the domestic market (such as new energy and high-end manufacturing fields), enterprises are vigorously expanding into markets such as countries participating in the "Belt and Road" initiative, and encouraging low-carbon capacity layout through overseas green investment to avoid carbon trade barriers.
• Promoting Supply Chain Collaborative Carbon Reduction: Nangang Group systematically promotes upstream partners to participate in carbon data disclosure, has collected and accounted for the carbon footprint data of more than twenty suppliers, and launched the "Green Supply Chain Partner Program," aiming to build a green supplier cluster that meets international standards.

4. Actively Participating in Rule Alignment and Policy Synergy, Striving for International Discourse Power

The industry and national levels are taking active actions to promote the alignment of domestic and foreign carbon market rules and participate in the formulation of international standards.

• Promoting Carbon Market Mutual Recognition Negotiations: Strengthening China-EU carbon market mutual recognition negotiations, promoting the alignment of China's carbon market with the EU Emissions Trading System (EU ETS) rules, and striving for mutual recognition of carbon quotas to reduce the double carbon costs for enterprises.
• Building Industry Carbon Factor Database: Nangang Group is starting to build an international carbon factor database for the steel industry, aiming to establish a carbon emission database that reflects the actual situation of China's industry, providing data support for breaking international green trade barriers.

5. Utilizing Public Service Platforms to Enhance the Industry's Overall Response Capability

Local governments and institutions have built public service platforms to provide enterprises with carbon accounting, policy interpretation, and other support, helping SMEs cope with compliance challenges.

• Hubei Province launched the "Product Carbon Footprint Public Service Platform" in July 2025, integrating functions such as accounting and certification, supporting enterprises to generate carbon footprint reports that meet international standards with one click.
• The "China Green Trade Public Service Platform" built under the guidance of the Ministry of Commerce is also operating in Hubei, providing enterprises with international green rule dynamics, policy interpretation, and case references.