"Realizing the 'dual-carbon' goal is a major strategic decision made by the CPC Central Committee after careful consideration, a solemn commitment we have made to the international community, and an inherent requirement for promoting high-quality development. Green and low-carbon is a systematic project related to the healthy development and sustained prosperity of the whole society. It is not the business of an enterprise or an industry. In this new era, each of our industries will encounter new challenges and find new opportunities in the challenges." He Wenbo, Party secretary and executive president of the China Iron and Steel Association, said in a speech at a conference on the integration of green steel, green energy and green finance industries held in Jiayuguan, Gansu province, on March 2.

"I hope we can take this meeting as an opportunity to work together to build a more efficient collaborative ecosystem of green steel, green energy and green finance industries and build a green world," He Wenbo said.

The steel industry will operate smoothly in 2022

In his speech, He Wenbo first introduced the operation of the country's steel industry in 2022. Since 2022, affected by the international political and security situation and the COVID-19 pandemic, the downstream demand of the steel industry has weakened, steel prices have fallen, and raw fuel costs have risen, making the external environment extremely challenging. Under such circumstances, the iron and steel industry adheres to the response policy of "rational market judgment, realistic concrete measures and positive overall response", pays close attention to reducing costs and increasing efficiency, strictly controls operational risks, and strives to maintain the dynamic balance of market supply and demand, thus achieving the overall stable operation of the industry and playing an important role in stabilizing the development of the national economy and fully meeting the market demand.

In the case of reduced output and declining benefits, the pace of transformation and upgrading and high-quality development of the iron and steel industry has not stopped, the investment in research and development continues to increase, the pace of green development gradually increased. In 2022, R&D expenses across the industry will continue to increase, green and low-carbon investment will continue to increase, and environmental protection indicators will continue to improve. In 2022, R&D expenses of member enterprises of the Steel Association reached 119.7 billion yuan, up 5.38% year on year, accounting for 1.82% of operating revenue. Industrial investment in energy conservation and environmental protection was 37.144 billion yuan, up 11.95 percent year on year, accounting for 29.2 percent of the total investment.

"In the face of a sharp decline in demand and severe market fluctuations, the association has always adhered to the focus of '1231' in the industry work." He Wenbo pointed out that the focus is on one fundamental task: to comprehensively improve the basic capacity of the industry and the modernization level of the industrial chain; Adhere to the two development themes: green, low-carbon and intelligent manufacturing; Focus on solving the three major pain points: controlling capacity expansion, promoting industrial concentration, and ensuring resource security; Continue to promote a process: continue to promote the internationalization of China's steel industry.

"In accordance with the work requirements of 'transforming strategies into tasks and tasks into projects', and on the basis of extensive consultation with major member institutions, we gradually formed a key work promotion system last year, which includes two basic measures, three transformation projects and two industrial development plans, which can be called the' 232 'key work promotion system." He Wenbo further explained that the two basic measures refer to the work of "researching and promoting a new mechanism of capacity governance" and "optimizing and improving the policy guidance of joint restructuring". "This is a basic measure to improve the operation order of the industry and optimize the environment for its development." He Wenbo stressed, "The steel industry in the development stage of demand into the platform area has a good performance, the first thing to do these two things." The three transformation projects refer to the three major transformation projects, namely "capacity replacement", "ultra-low emission" and "extreme energy efficiency", to promote green and low-carbon development and improve industrial competitiveness. The two industrial development plans refer to the "Cornerstone Plan" for ensuring the supply security of iron resources and the "Steel application Expansion Plan" for expanding the application space of iron and steel materials. The main way to achieve this plan is to upgrade and replace materials. By expanding upstream and downstream cooperation, the industrial development space is opened up to maximize the release of the green characteristics of iron and steel materials.

"In short, '1231' is the focus, the direction, and solves the 'what' problem, while '232' is the method, the plan, and the 'how' problem." He Wenbo said, "Green and low-carbon development runs through all the work, is the industry's future transformation direction, is the top priority of the industry work, is also the original intention of planning this conference."

A lot of green and low-carbon development work has been carried out in the steel industry

He Wenbo introduced that in view of the core proposition of green and low-carbon transformation and development of the steel industry, the steel industry has carried out a lot of effective work, which is reflected in the following aspects:

First, it published the Carbon Neutral Vision and Low-carbon Technology Roadmap for the Steel Industry, defined the "dual-carbon" goal and technology realization path for China's steel industry, and organized efforts to propose to the state eight cutting-edge low-carbon technologies such as hydrogen metallurgy that the steel industry needs attention and support from the state and intensive research from the industry, so as to organize innovation.

Second, China Steel Association, China Baowu and the World Steel Association jointly held the Global low-carbon Metallurgy Innovation Forum with the theme of "Reconstructing the key role of steel industry in the process of human sustainable development". Steel leaders and scientists from the world's major steel producing countries gathered together to discuss the path of low-carbon development of the world steel industry, promote international cooperation on low-carbon development of the steel industry and form consensus on cooperation.

Third, it has built and launched the first EPD (Environmental product declaration) platform in China's industrial field -- the EPD Platform for the iron and steel industry. It has completed the release of 35 EPD reports of nearly 10 enterprises such as China Baowu, Shougang, Shagang, Baotou Iron and Steel, and Jiujiang Iron and Steel, and achieved the global launch of 6 iron ore EPD reports. "Life cycle green and low-carbon evaluation in China's steel industry has been implemented from the concept to the action, and is now actively connecting with upstream and downstream industries to promote international mutual recognition." He Wenbo said.

Fourth, we will continue to carry out the world's most stringent ultra-low emission transformation project. Ultra-low emission transformation is one of the three major projects in the steel industry. Up to now, there have been 47 enterprises to complete the whole process of ultra-low emission transformation publicity, involving steel production capacity of about 243 million tons; A total of 26 enterprises completed some of the ultra-low emission upgrading, involving steel production capacity of about 157 million tons; At present, there are 53 enterprises are conducting expert audit and enterprise further improvement and rectification before publicity, involving steel production capacity of about 91 million tons.

Fifth, promote "extreme energy efficiency" and cultivate benchmarks for energy efficiency. Under the strong support of the national ministries and commissions, the association has planned and launched the extreme energy Efficiency Project of the steel industry, formed the Three-year Action Plan for Energy Efficiency Benchmarking of the Steel Industry, selected 50 mature and feasible energy saving technologies, formed and promulgated the "Extreme Energy Efficiency Technology List" and "Energy Conservation and Low carbon Policy List", and carried out the cultivation activity of "Double carbon best practice energy efficiency Benchmarking Factory". The first batch aims to foster 21 advanced enterprises in Baosteel, Zhanjiang Iron and Steel, Shougang Jingtang and Angang Bayuquan to achieve 200-300 million tons of steel capacity to meet the energy efficiency benchmark by 2025.

The steel industry and the energy industry should exert linkage effect

"The iron and steel industry is an important basic industry of the national economy and food for industrial development. And the energy industry is the power source of our steel industry and the main destination and area of steel consumption." He Wenbo said that for a long time, the development of China's steel and energy industries have been complementary to each other, especially in the context of green and low-carbon, the linkage between industries is more urgent.

First, the steel industry has ensured the material demand of the green energy industry. In 2022, the installed capacity of wind power increased by 37.63 million kW and that of solar power increased by 87.41 million kW, according to the National Energy Administration. It is estimated that about 100 tons of steel are used for every 1MW of wind power and about 30 tons of steel are used for every 1MW of photovoltaic support. In 2022, about 3.76 million tons of steel are used for wind power and 2.62 million tons of steel are used for photovoltaic support.

"Wind turbines operate in harsh environments with complex forces, and photovoltaic supports must be durable and low maintenance. Iron and steel enterprises actively docking, providing comprehensive material solutions for photovoltaic and wind power industries, and driving material upgrading." He Wenbo, for example, said that, for example, Shan Steel, together with Beijing University of Science and Technology, Goldwind Technology and other units set up the "high-end wind power steel materials and equipment collaborative innovation center", the production of high-strength wind power steel comprehensive replacement of 355 megapa ordinary wind power steel; The high-strength steel for photovoltaic support customized and developed by Baosteel Co., LTD has been demonstrated and applied to 350 MW photovoltaic power generation project in Hubei.

According to the Guidelines on Fully, Accurately and Comprehensively Implementing the New Development Concepts to Achieve Carbon Peaking and carbon Neutrality, by 2030, the proportion of non-fossil energy consumption should reach around 25%, and the total installed capacity of wind and solar power should reach over 1.2 billion kW. By 2060, the share of non-fossil energy consumption should reach over 80 percent. It is estimated that by 2060, the total installed scale of wind power will reach 3000GW, and the average annual consumption of steel will be about 22 million tons. By 2050, China's total installed capacity of photovoltaic power generation will reach 5,000 GW, with an average annual consumption of about 8 million tons of steel. "The green energy industry has huge development potential, and the steel industry will fully guarantee the material upgrading needs of the green energy industry." He Wenbo said.

Second, the steel industry provides a broad application scenario for the green energy industry. According to the "Action Plan to achieve Carbon Peak by 2030", the photovoltaic coverage rate of new public institution buildings and new factory buildings should reach 50% by 2025. "The steel industry, which has high-quality roof resources, abundant green energy demand and often has self-generating peak regulating capacity, has actively explored and introduced a series of green energy projects." For example, Zhanjiang Steel has built a distributed photovoltaic project with a total installed capacity of 46.89MW, covering "water, land and air", He said. Relying on Jiuquan and Jiayuguan landscape resources and self-provided power system peak regulating capacity, Jiusteel is promoting the construction of 2400MW landscape power project; Steel enterprises such as Hubei Iron and Steel, Tisco, Jinnan Iron and Steel, Zhongtian Nantong, Lianyungang Yaxin Iron and Steel, Baotou Iron and Steel, Shagang and so on have laid out and constructed photovoltaic power generation projects.

"In the future, the steel industry still has a broad space in the construction of green energy projects, and needs to strengthen cooperation with the green energy industry, through consultation and joint construction," He Wenbo said.

Third, green and low-carbon development promotes industrial resonance. Currently, the new energy industry is pushing forward the integrated development of BIPV (building integrated photovoltaic), of which the steel structure building is an important component. Compared with concrete buildings, steel structure buildings are more closely combined with photovoltaic products, highly compatible, and can reduce the cost of the system, which is an effective means of carbon reduction development in the construction industry.

"In the future, the steel industry will collaborate with the steel structure industry chain to provide material solutions with both cost and green benefits for the steel structure industry and even the green energy industry chain. In the context of green and low carbon, the development ideas of the two industries coincide, and we also welcome the active participation of photovoltaic enterprises in related work." He Wenbo proposed.

Use sufficient green finance to accelerate the low-carbon transition

"Accelerating low-carbon transformation is the only way to transform and upgrade the steel industry and achieve high-quality development. China's iron and steel enterprises mainly produce steel through long process, and are highly dependent on iron ore resources, coal, coke and other energy sources. The consumption of resources and energy is large, and the green low-carbon transformation of the iron and steel industry has a long way to go." He Wenbo pointed out, among them, high investment and operation cost is the steel industry green low-carbon transformation is or will face one of the difficulties.

At the environmental protection level, according to incomplete statistics, the industry has invested more than 150 billion yuan in ultra-low emission transformation. According to the national requirements, more than 80% steel enterprises will complete the transformation by the end of 2025, and a large amount of capital investment is still needed in the next three years. In terms of energy conservation, at the end of 2022, under the strong support of the national ministries and commissions, the Association planned and launched the extreme energy efficiency project of the steel industry, forming the three-year Action Plan for the Energy Efficiency Benchmark of the Steel Industry. The extreme energy efficiency project also requires continuous capital investment and close combination of the steel industry and the financial industry.

"Financial services are an important lever to develop the economy and innovate technology. The green and low-carbon transformation of the steel industry requires a huge amount of capital, and green finance is becoming an important force to promote the steel industry to achieve the 'dual-carbon' goal." He Wenbo said that the relevant departments of the state in green bonds, green credit and innovation and other aspects have made deployment and implementation in the steel industry.

He Wenbo, for example, said that China Baowu and the National Green Development Fund Co., Ltd. launched Baowu Carbon neutral equity Investment Fund in 2021, with a total scale of 50 billion yuan and the first phase of 10 billion yuan, which is the largest carbon neutral theme fund in the domestic market. It is committed to exploring potential development areas of clean energy such as wind and light and investing in high-quality carbon neutral industrial projects in the market. Baosteel issued China's first low-carbon transformation green corporate bond, with a scale of 500 million yuan, for Zhanjiang Iron and Steel hydrogen-based shaft furnace system project; Anshan Steel issued 300 million yuan medium-term green bonds to promote the "dual carbon" goal; Shandong Iron and Steel Co., Ltd. issued 1 billion yuan of transformation bonds on a pilot basis for the construction of Laigang's upgrading and upgrading of the new and old growth drivers conversion system; Some steelmakers work with green/low-carbon facilities suppliers to adopt a "builder-invest, steelmaker rent" model, similar to BOO (build-own-operate) or BOT (investment-build-operate-transfer) model, which reduces one-off investment. In addition, Jianlong, Liugang and other steel enterprises actively declared and approved green credit support.

"Overall, despite the above exploration and progress, the use of green financial tools in the steel industry's low-carbon transition is still low." Mr He admitted that by the end of last year, only 10 steel issuers had participated in green bonds (including carbon-neutral bonds), accounting for only 1 per cent of total green bond issuance.

"The energy conservation, emission reduction and carbon reduction projects being promoted in the steel industry, whether ultra-low emissions, extreme energy efficiency, or collaborative research and development of new low-carbon technologies, their promotion and implementation effects are related to whether the enterprise can maintain long-term competitiveness, is the core asset of the enterprise, because of its own clear income, but also a good financial target." He Wenbo said that lists such as the Implementation Guide for Energy Conservation and carbon Reduction Upgrading in Key areas of Energy-intensive Industries, the Association's list of "extreme energy efficiency" technologies, and the Guide for Ultra-Low Emission Transformation Technologies for Iron and Steel Enterprises can help financial institutions identify high-quality green and low-carbon projects.

He Wenbo said that in the future, the steel industry should make good connection with financial institutions, make good and sufficient use of green finance, and accelerate the realization of low-carbon transformation.

First, we will identify high-quality enterprises and advantageous projects and implement a white list system. He Wenbo proposed that the steel industry and financial institutions should jointly establish and improve the task list and project list for green and low-carbon development of the steel industry, implement refined, differentiated and dynamic management, put key advantageous enterprises and typical green and low-carbon projects on the white list, provide sustainable financial support, and increase the proportion of medium and long-term loans and direct financing.

The second is to set up the approval channel, the steel does not set a separate threshold. "The steel industry has made remarkable progress in promoting supply-side structural reform, accelerating structural adjustment and transformation and upgrading, but the social understanding of steel does not match the position of the industry in the global steel industry, nor does the proportion of bond issuance." He Wenbo proposed that regulators provide a green fast-track for approval, clearly issue detailed financial policies to support the green development of steel enterprises, and promote the implementation of green loans.

Third, innovate financial products to stimulate the driving force of low-carbon transition. He Wenbo proposed that policy tracking and industrial docking should be strengthened to realize the coordinated support of transformation finance and green finance for the steel industry. The product category of transformation finance should be innovated, the financing cost of iron and steel enterprises should be related to its carbon footprint, and the key enterprises in low-carbon transformation and low-carbon projects such as CCUS, scrap recycling and electrolytic hydrogen should be strengthened from the aspects of credit, bond and equity financing at the same time. The combined force of finance and finance should be exerted to establish a long-term financing mechanism.

"As a steel practitioner and operator for more than 40 years, I have experienced the rapid development of China's economy and steel industry, and also experienced the arduous process of climbing uphill. In the process, our focus gradually extends from the production line to the industrial chain, and from the industrial chain to the ecosystem." He Wenbo said that this ecosphere is an ecosphere of mutual support, joint promotion and coordinated development, including production, design, research, service, supervision and finance. Through deepening industrial integration, it can provide better support for promoting industrial transformation and upgrading, cultivating new advantages of industrial competition, and realize mutual penetration among industries. So as to expand and cultivate new industries, new forms of business, new models.