SunSirs: Steel Industry Pursues Ultimate Energy Efficiency

As a vital foundation of the national economy, the steel industry is also a major contributor to energy consumption and carbon dioxide emissions. To advance energy conservation and carbon reduction, the Ultimate Energy Efficiency Project for the steel sector was launched in December 2022.

“Through concerted efforts, the industry achieved energy savings exceeding 24 million tons of standard coal and reduced carbon dioxide emissions by 60 million tons, surpassing the targets set in the Energy Conservation and Carbon Reduction Action Plan.” Jiang Wei, Deputy Secretary of the CPC Committee, Vice President, and Secretary-General of the China Iron and Steel Association, stated at the recent 2025 Annual Summary Meeting of the Three-Year Action Plan for Energy Efficiency Benchmarking in the Steel Industry. He emphasized the need to proactively align with the strategic shift from “dual control of energy consumption” to “dual control of carbon emissions,” deeply integrate the Ultimate Energy Efficiency Project with the industry's green and low-carbon transformation goals, and chart a new course for development during the 15th Five-Year Plan period.

Deepening Potential to Reduce Costs and Enhance Efficiency

Data indicates that coal and coke account for over 90% of the steel industry's energy input, with high dependence on fossil fuels being the primary driver of the sector's elevated carbon emissions. The “Steel Industry Carbon Neutrality Vision and Low-Carbon Technology Roadmap” specifies that enhancing system energy efficiency is the core technical pathway for carbon reduction in the steel industry before 2030, holding a 15% carbon reduction potential.

Zhang Yongjie, Executive Director of the China Iron and Steel Association, explained that the steel industry's Ultimate Energy Efficiency Project centers on “three lists, two standards, and one data system.” Leveraging the cultivation of “Dual Carbon Best Practice Energy Efficiency Benchmark Demonstration Plants,” it systematically advances energy efficiency compliance in key steel production processes, promoting green and high-quality development in the sector. To date, the 143 enterprises selected across four batches represent over 750 million tons of crude steel capacity. Energy consumption in blast furnaces and converters alone has decreased by 2.45% and 12.22% respectively compared to 2023, achieving cumulative energy savings equivalent to 13.2 million tons of standard coal and reducing carbon dioxide emissions by 34 million tons.

Currently, the steel industry faces multiple pressures from market dynamics, environmental regulations, and cost pressures. Numerous enterprises are anchoring their efforts on achieving ultimate energy efficiency, competitively benchmarking against industry leaders to identify gaps and deeply tap into potential, yielding significant results in cost reduction and efficiency enhancement. In 2025, Jiangyin Xingcheng Special Steel Co., Ltd. achieved annual energy cost savings of CNY 136 million ; Ansteel Benxi Steel Plate Co., Ltd. not only completed 26 major energy-saving projects in key processes like blast furnaces and coke ovens but also extended extreme energy efficiency to sintering processes and auxiliary systems. It implemented nine new measures, including coking riser waste heat recovery and supercritical power generation units. By 2025, its comprehensive energy consumption per ton of steel decreased by 13 kg of standard coal year-on-year, reducing energy costs by CNY250 million.

Data from the China Iron and Steel Association shows that over 50 demonstration enterprises invested a total of CNY40.9 billion over three years by the end of 2025. The average investment per enterprise was CNY700 million, with CNY95 spent per ton of steel for upgrades. Energy costs per ton of steel decreased by CNY29, and the average payback period was 3.27 years, providing strong support for enterprise cost reduction.

Industry insiders widely agree that as the initiative progresses, the logic that “energy conservation and carbon reduction = cost reduction and efficiency improvement” is becoming increasingly clear. More enterprises are shifting from a mindset of “being told to do it” to “wanting to do it,” creating a favorable situation driven by internal motivation.

“Ultimate energy efficiency” does not simply pursue “physical energy efficiency,” but rather “ultimate economic energy efficiency” that balances both efficiency and benefits. “ This approach not only aligns with national ”dual carbon“ goals but also addresses enterprises' practical cost-reduction needs. It enables benchmark enterprises to gain advantages in capacity regulation and green finance, fostering a virtuous cycle of ”policy guidance, enterprise leadership, cost-driven implementation, and benefit incentives."

Accelerating Advanced Technology Adoption

Technological innovation is the core key to unlocking the steel industry's “high-carbon lock-in” challenge and the primary engine driving green development. Within the “Three Lists” framework of the Ultimate Energy Efficiency Project, the Technology List continuously provides the industry with best available technologies, the Capability List offers global partners for ultimate energy efficiency technologies, and the Policy List, coupled with numerous matching activities, precisely guides and accelerates the steel industry's adoption of advanced energy-saving and carbon-reduction technologies.

Recently, the China Iron and Steel Association released the Ultimate Energy Efficiency Capability List (2025 Edition). Building upon the 2024 edition, this version expands coverage to seven major categories encompassing 134 technologies: coke ovens, sintering/pelletizing, blast furnaces, steelmaking, rolling mills, public utilities, and other processes. It focuses on achieving ultimate energy efficiency across the entire production chain and facilitating the commercialization of technological achievements.

During iron production, temperature loss inevitably occurs when molten iron is transferred to converters or electric furnaces, resulting in energy waste. For China's predominantly long-process steel production, addressing energy efficiency at the iron-steel interface holds significant importance.

Within the industry, the energy-saving effect of molten iron temperature reduction is generally calculated at CNY0.18 per ton of iron per degree Celsius. For a steel enterprise producing 10 million tons of molten iron annually, a mere 10-degree Celsius reduction in the iron-steel interface temperature could yield energy-saving economic benefits of up to CNY18 million per year," explained Professor Huang Jun from the School of Energy and Environment at Inner Mongolia University of Science and Technology.

The integration of smart manufacturing with metallurgical process engineering, empowered by digital intelligence, presents new opportunities to maximize energy efficiency at the iron-steel interface. Professor Huang's team developed a thermal diagnosis and temperature drop prediction model for this interface. Combined with an intelligent iron-water logistics system for steelmaking, it optimizes ladle allocation patterns, transport routes, and waiting times through digital scheduling to minimize heat loss.

Data shows that after implementing the intelligent molten iron management system at Baowu Baosteel's Baoshan base, the temperature drop at the iron-steel interface decreased by 30 degrees Celsius. Based on an annual production of 12 million tons of molten iron, this translates to annual energy savings of 9,580 tons of standard coal and a reduction of 25,500 tons of carbon dioxide emissions.

Auxiliary systems are another critical area for energy conservation and carbon reduction in the steel industry. “Our intelligent compressed air management technology is like installing an AI-based ‘operating system’ on traditional compressed air equipment,” explained Shen Xinrong, Chairman of Hangzhou Zheda Technology Co., Ltd. “It uses algorithmic optimization to achieve efficient coordination and intelligent scheduling of units.” This technology leverages the “Energy-Carbon Intelligence Brain + AI Group Control” platform, employing large models and intelligent algorithms to enable multi-unit coordination and integrated energy-carbon management. The system deeply integrates artificial intelligence technology, providing industrial users with comprehensive energy efficiency solutions through an “AI + Equipment + Service” model, significantly enhancing overall system energy efficiency. Currently, this technology has been included in the “Steel Industry Ultimate Energy Efficiency Engineering Capability List” and has been deployed in multiple steel enterprises.

Collaborative Efforts for Advancement

By 2025, the steel industry will be formally integrated into the national carbon emissions trading market management system. Gao Xue, Deputy Director of the Metallurgical Industry Planning and Research Institute, analyzed that this signifies the steel sector will face dual constraints on both total carbon emissions and carbon emission intensity. During the 15th Five-Year Plan period, the steel industry's dual control of energy consumption will transition to a carbon emissions dual-control system prioritizing intensity control while supplementing with total control, ensuring the timely achievement of carbon peak targets.

Li Yang, Chief Scientist at Beijing Shougang International Engineering Technology Co., Ltd., observes that while current peak energy efficiency evaluations primarily focus on single-process energy consumption levels, future efforts will gradually shift toward establishing a comprehensive evaluation system centered on dual carbon controls and integrating energy and carbon management.

“The future of peak energy efficiency lies in mapping and optimizing entirely new ‘network’ and ‘ecosystem’ blueprints from a higher perspective,” Li Yang suggests. " Li Yang suggests shifting management focus from equipment to process, system, and even ecosystem coordination, while redirecting technological emphasis from standalone technologies to cross-system optimization techniques like system integration and digital twins.

Feng Chao, Deputy Secretary-General and Director of the Science, Technology, and Environmental Protection Department at the China Iron and Steel Association (CISA), noted that China's steel industry still faces challenges in technological innovation, including insufficient original technologies, inadequate upstream-downstream coordination, scattered innovation resources, and insufficient investment in fundamental theoretical research. The CISA is collaborating with relevant enterprises, universities, and research institutions to actively prepare for the establishment of the National Steel Industry Carbon Neutrality Technology Innovation Center. This initiative aims to guide enterprises, universities, and research institutions to closely cooperate, jointly identify cutting-edge technological challenges facing the industry, and undertake collaborative research and development.

During the 15th Five-Year Plan period, the steel industry's green and low-carbon transformation enters a critical phase. Jiang Wei stated that the CISA will implement an energy and carbon efficiency enhancement project to further promote energy conservation, carbon reduction, cost reduction, and efficiency improvement across the industry. Focusing on core processes, the initiative will accelerate the implementation of cutting-edge technologies by establishing a collaboration platform between energy-saving technology suppliers and steel enterprises. This will facilitate rapid technology adoption, translating into tangible cost savings and carbon reduction benefits for companies. Data governance will be deepened to align with energy and carbon system requirements, upgrading to an Energy Efficiency Data Governance 3.0 system. This will integrate underlying energy and carbon emission data links, enabling real-time synchronization and precise integration of both datasets. Advance collaborative innovation efforts, deepening cooperation between universities, research institutes, and enterprises—as well as among enterprises themselves—from “technical exchanges” to “joint R&D and industrialization of outcomes.”

Additionally, the CISA will promote the coordinated cultivation of energy efficiency and carbon emission benchmarks, guiding enterprises to shift from “single energy efficiency improvement” to “dual enhancement of energy and carbon efficiency.” It will strive to secure greater support for benchmark enterprises in areas such as production capacity regulation, environmental permits, and tax incentives.

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