China’s Ministry of Ecology and Environment is planning to add steel, as well as aluminum and cement, to the country’s carbon trading market scheme by the end of this year to push carbon-intensive industries to reduce emissions, according to media reports. When the steel industry is added to the scheme, Chinese steel producers will face additional costs for carbon emissions.
With the addition of these three industries, the country’s emissions trading scheme (ETS), which is planned to reduce emissions to soften the pressure from Europe’s Carbon Border Adjustment Mechanism, is expected to cover around 60 percent of its carbon emissions. China will expand its ETS in two phases. In the first phase between 2024 and 2026, processes will be introduced and management of data related to emissions will be improved, while the second phase scheduled for 2027 will include reducing carbon quota allocations to companies.