The decarbonization of China's steel industry and the global emissions trajectory
The decarbonization of China's steel industry dictates the global emissions trajectory of heavy industry. China manufactures over 55% of global crude steel and produces 60% of worldwide iron and steel CO2 emissions. Hydrogen direct reduced iron coupled with electric arc furnaces (H2-DRI-EAF) can deliver an 80% to 95% reduction in plant-level emissions compared to incumbent coal blast furnaces. Two recent publications, one by Shuang Xu et al (Energy Reports Volume 16, December 2026, 109564) and another by Alberto Boretti (International Journal of Hydrogen Energy Volume 263, 26 August 2026, 156863), both analyses agree that technological viability is governed by upstream power infrastructure rather than furnace-level engineering.
• Western carbon border tariffs will guarantee import demand for China, which already controls over 73 percent of operational green hydrogen production.
• Clean steelmaking requires hydrogen production costs below 1.5 euros per kilogram, a threshold China targets by the early 2030s while European costs remain at 3 to 5 euros per kilogram.
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