metals

Article Review of the Energy Consumption and Production Structure of China’s Industry: Current Situation and Future Development

Kun He 1,2, Li Wang 1,3,* and Xiaoyan Li 2 1 School of Energy and Environmental Engineering, University of Science and Technology Beijing, Beijing 100083, China; [email protected] 2 China ENFI Engineering Corporation, Beijing 100038, China; lixiaoyan@enfi.com.cn 3 Beijing Engineering Research Center for Energy Saving & Environmental Protection, Beijing 100083, China * Correspondence: [email protected]; Tel.: +10-6233-2566

 Received: 17 January 2020; Accepted: 11 February 2020; Published: 26 February 2020 

Abstract: China produced 49.2% of the world’s total steel production in 2017. From 1990 to 2017, the world’s total steel production increased by 850 Mt, of which 87% came from China. After 30 years of rapid expansion, China’s steel industry is not expected to increase its production in the medium and long term. In fact, the industry is currently in the stage of industrial restructuring, and great changes will arise in production structure and technical level to solve pressing issues, such as overcapacity, high energy intensity (EI), and carbon emission. These changes will directly affect the global energy consumption and carbon emissions. Thus, a review of China’s steel industry is necessary to introduce its current situation and development plan. Therefore, this paper presents an overview of the Chinese steel industry, and factors involved include steel production, production structure, energy consumption, technical level, EI, carbon emission, scrap consumption, etc. In addition, four determinants are analyzed to explain the EI gap between China and the world’s advanced level. In addition, comparison of steel industries between China and the world, development plans for energy savings, and emission reduction are also included in this paper to give readers a clear understanding of China’s steel industry.

Keywords: steel industry; industrial restructuring; energy consumption; carbon emission; technology upgrade

1. Introduction Steel production is an energy-, resource-, and pollution-intensive process [1,2]. China is currently the world’s largest steel producer; indeed, the country’s steel production accounted for 49.2% of the world’s total steel production in 2017 [3]. The energy consumption of China’s steel industry accounted for over 20% of the national industry energy consumption in 2017, and the CO2 emissions from steel enterprises also accounted for over 10% of the country’s total CO2 emissions [4–6]. As such, improving the energy efficiency of steel production should be a primary concern for China, especially in times of high energy price volatility. The rapid development of China’s steel industry began in the 1990s. From 1990 to 2017, the world’s total steel production increased by 850 Mt, of which 87% came from China [7]. Rapid expansion of production capacity has had generally positive effects on the energy efficiency of the industry, and the energy intensity (EI) of China’s steel industry decreased by 11.5% from 2006 to 2017 [8]. However, there is still a gap between the EI of China0s steel industry and the world0s advanced level. In 2018, the production of China’s steel industry increased to 928 Mt. After years of rapid expansion, China’s steel industry is currently at the end of the stage of production growth. In fact, the industry

Metals 2020, 10, 302; doi:10.3390/met10030302 www.mdpi.com/journal/metals Metals 2020, 10, x FOR PEER REVIEW 2 of 19 Metals 2020, 10, 302 2 of 18 the industry is facing numerous pressures, such as overcapacity and resources, energy, and environmental issues. These issues must be solved under the condition of ensuring an adequate steel issupply, facing and numerous this is a pressures, challenge suchfor the as Chinese overcapacity government. and resources, energy, and environmental issues. TheseThere issues are must various be solved energy under-efficiency the condition opportunities of ensuring that exist an in adequate China, and steel many supply, exist anding research this is a challengeworks on forthethe steel Chinese industry government. from a technical point of view are available in the literature, and the energyThere saving are variouspotential energy-e of Chinaffi ciencyhas been opportunities assessed in thatscientific exist inpapers China, [9– and15]. many However, existing currently, research a workscomprehensive on the steel review ’sfrom a technical steel ind pointustry of is view still are necessary available to in thegive literature, readers and a clear the energyunderstanding saving potential of the present of China situation has been and assessed development in scientific plan to papers realize [9 – the15]. production However, currently, structure aadjustment comprehensive and technical review of level China’s upgrade. steel industry is still necessary to give readers a clear understanding of theThe present work situationpresented and in this development paper is a unique plan to study realize for the the production steel indust structurery, as an extensive adjustment review and technicalof China’s level steel upgrade. industry was conducted in this study. This paper specifically discusses (1) the developmentThe work presentedand present in this situation paper is of a unique steel studyproduction for the and steel industry,consumption as an extensivein China; review (2) the of China’simplementation steel industry rate was of conducted major energy in this-saving study. technologies,This paper specifically gas recovery discusses and (1) the utilization, development and andsecondary present energy situation generation of steel productionin key enterprises and consumption in the country; in China; (3) the (2) development the implementation of the overall rate of majorenergy energy-saving intensity (EI), technologies,specific process gas EIs, recovery and the and EI utilization,gap in key steel and secondaryenterprises energy between generation China and in keythe world; enterprises and (4) in thethecountry; carbon emissions (3) the development of China’s ofsteel the production overall energy andintensity its main (EI),sources. specific process EIs, andThis the paper EI gap also in presents key steel an enterprises analysis of between the reasons China behind and the the world; EI gap and between (4) the carbon China’s emissions and the ofworld China’s’s steel steel industries. production The and factors its main considered sources. include scrap ratio (SR), production structure, energy structure,This paper and also industrial presents concentration. an analysis of In the addition, reasons behind development the EI gap plans between for major China’s energy and theconservation world’s steel in China’s industries. steel The industry factors considered are also introduced include scrap and ratio analy (SR),zed. production These plans structure, include energyeliminating structure, backward and industrial production concentration. capacity, In developing addition, development and implementing plans for energy major- energysaving conservationtechnologies, in and China’s adjusting steel industry production are also structures introduced by and increasing analyzed. These scrap plans consumption include eliminating in steel backwardproduction. production capacity, developing and implementing energy-saving technologies, and adjustingWe hope production this study structures could by be increasing a useful scrap referen consumptionce for global in policy steel production. makers, researchers, and industrialWe hope energy this study users, could and be be a helpful useful reference for energy for conservationglobal policy makers, and emission researchers, reduction and industrial work of energyChina’s users,steel industry. and be helpful for energy conservation and emission reduction work of China’s steel industry. 2. Development and Present Situation of China’s Steel Industry 2. Development and Present Situation of China’s Steel Industry 2.1. Steel Production and Consumption 2.1. Steel Production and Consumption The rapid development of China’s steel industry began in the 1990s, and the rise of this industry The rapid development of China’s steel industry began in the 1990s, and the rise of this industry has had an important impact on the development of the global steel production (Figure 1). China has had an important impact on the development of the global steel production (Figure1). China became the world’s largest steel producer in 1996 and has retained this status thus far. From 1990 to became the world’s largest steel producer in 1996 and has retained this status thus far. From 1990 to 2017, the world’s total steel production increased by 850 Mt, of which 87% came from China [7]. 2017, the world’s total steel production increased by 850 Mt, of which 87% came from China [7].

Figure 1. Development of global steel production.

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In 2017,2017, the the world’s world’s total total steel steel production production was 1689.4 waswas 1689.4 Mt (Figure Mt (Figure(2Figure), and the2), topand 10 the steel top producers 10 steel includedproducers China included (831.7 China Mt), (831.7 Japan Mt), (104.7 Japan Mt), (104.7 India Mt), (101.4 India Mt), (101.4 the Mt), United the States,United (81.6 States, Mt), (81.6 Russia Mt), (71.3Russia Mt), (71.3 South Mt), KoreaSouth (71.0Korea Mt), (71.0 Germany Mt), Germany (43.4 Mt),(43.4(43.4 Turkey Mt), Turkey (37.5 Mt),(37.5 Brazil Mt), Brazil (34.4 Mt),(34.4 andMt), Italyand (24.1Italy (24.1 Mt) [ 16Mt)]. [16].[16].

Figure 2. Top 15 global steel producers.

As the world’s largest steel producer, China is alsoalso the world’s largest steel consumer. In 2017, China’s steel steel consumption consumption accounted accounted for 46.4% for 46.4% of the world’sof the totalworld’s steel total consumption; steel consumption; by comparison, by Europeancomparison, Union European (EU) UnionUni countrieson (EU) and countries North Americananandd North FreeAmerican Trade Free Agreement Trade Agreement (NAFTA) (NAFTA) countries accountedcountries accounted for 10.2% for and 10.2% 8.9% ofand the 8.9% world’s of the total world’sworld’ total consumption, steel consumption, respectively respectively [16]. In addition, [16].[16]. InIn Japanaddition, accounted Japan accounted for 4.1% of for the 4.1% world’s of the total world’s steel consumption,total steel consumption, and other Asianand other countries AsiaAsiann consumed countries 15.9%consumed of the 15.9% world’s of the total world’s steel (Figure total steel3). ((FigureFigure 3).

Figure 3. Global steel consumption in 2017 [16], with permission from World Steel Association 2019. Figure 3. Global steel consumption in 2017 [16],[16], with permission from World Steel Association 2019.

2.2.2.2. Production Route.Route.

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Metals 2020, 10, x FOR PEER REVIEW 4 of 19 2.2. Production Route and steel industry has a complex structure. However, only a limited number of routes are appliedIron worldwide, and steel industry and these has production a complex structure.routes use However, similar energy only a resources limited number and raw of routes materials are (appliedFigure 4). worldwide, Globally, steel and is these produced production via two routes main use routes, similar namely, energy the resources and– rawbasic materials oxygen furnace(Figure 4(BF). Globally,–BOF) route steel and is producedthe electric via arc two furnace main (EAF) routes, route. namely, the blast furnace–basic oxygen furnace (BF–BOF) route and the (EAF) route.

Figure 4. Steel production routes [17], with permission from World Steel Association 2012. Figure 4. Steel production routes [17], with permission from World Steel Association 2012. In the BF–BOF route, is first processed into iron, also known as molten or . Then, the moltenIn the BF iron–BOF is converted route, iron into ore steelis first in processed a converter. into After iron, refining,also known casting, as molten and rolling, or pig iron. the steel Then, is thedelivered molten in iron the is form converted of steel into plates, steel section in a converter. steel, or steel After bars. refining, casting, and rolling, the steel is deliveredThe EAFin the route form uses of steel electricity plates, tosection melt steel, scrap or steel steel in bars. an electric arc furnace. Additives, such as alloys,The can EAF be route added uses during electricity to melt toscrap adjust steel the in required an electric chemical arc furnace. composition Additives, of thesuch steel, as alloys,and oxygen can be canadded be injectedduring steelmaking into the EAF. to Theadjust downstream the required processing chemical composition stages of this of route,the steel, such and as oxygencasting, can reheating, be injected and into rolling, the EAF. are similar The downstream to those of theprocessing BF–BOF stages route. of this route, such as casting, reheating,The key and di rolling,fference are between similar theto those BF–BOF of the and BF EAF–BOF routes route. is the type of raw materials consumed. The mainThe key raw difference material ofbetween the BF–BOF the BF route–BOF is and iron EAF ore (generallyroutes is the accounting type of raw for 70%–100%materials consumed. of the total Theraw main material); raw material scrap, pig of iron,the BF and–BOF hot-pressed route is iron iron ore are (generally also added. accounting By comparison, for 70% the–100% EAF of route the totalproduces raw steelmaterial); using scrap, mainly pig recycled iron, and steel hot (generally-pressed accounting iron are al forso overadded. 70% By of comparison, the total raw the material EAF routeconsumed) produces [18]. steel Depending using mainly on the recycled plant configuration steel (generally and availabilityaccounting offor recycled over 70% steel, of the other total sources raw materialof metallic consumed) iron, such [18]. as direct Depending reduction on iron the (DRI)plant orconfiguration hot metal, can and also availability be used in of the recycled EAF route. steel, otherIn sources 2017, theof metalli BF–BOFc iron, and such EAF as routes direct respectively reduction iron accounted (DRI) or for hot 71.6% metal, and can 28.0% also be of theused world’s in the EAFtotal route. steel production; another 0.4% of the world’s steel production was derived from the open-hearth routeIn [ 32017,]. China, the BF Japan,–BOF Russia, and EAF Korea, routes Germany, respectively Brazil, accounted and Ukraine, for 71.6% as some and 28.0% of the of world’s the world’s major totalsteel steel producers, production; use the another BF–BOF 0.4% route of the as their world’s main steel route production of steel production; was derived the from EAF the route open is- usedhearth as routethe main [3]. modeChina, of Japan, steel productionRussia, Korea, in the Germany, United States,Brazil, India, and Ukraine, and Turkey as some (Table of1 ).the world’s major steel producers, use the BF–BOF route as their main route of steel production; the EAF route is used as the main mode of steel production in the United States, India, and Turkey (Table 1).

Table 1. Crude steel production by process in 2017.

BF–BOF EAF Open-Hearth Country (%) (%) (%) China 90.7 9.3 - Japan 75.8 24.2 - U.S. 31.6 68.4 - India 44.2 55.8 -

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Table 1. Crude steel production by process in 2017.

BF–BOF EAF Open-Hearth Country (%) (%) (%) China 90.7 9.3 - Japan 75.8 24.2 - U.S. 31.6 68.4 - India 44.2 55.8 - Russia 66.9 30.7 2.4 South Korea 67.1 32.9 - Germany 70.0 30.0 - Turkey 30.8 69.2 - Brazil 77.6 21.0 - Ukraine 71.8 6.8 21.5 World 71.6 28.0 0.4

2.3. Production Technology Development Given the rapid growth of China’s steel production began in the 1990s, the country’s energy consumption has also increased dramatically. Therefore, China attaches great importance to energy conservation in the steel industry. Implementing energy-saving technology is an effective way to reduce energy consumption in steel production. Over the past 30 years, China has made remarkable progress in the development of energy-saving technologies in steel production, and the technical indicators of China’s steel industry have considerably improved.

2.3.1. Implementation Rates of Coke Dry and Top Pressure Recovery Turbine Technologies Coking and blast furnace (BF) are the highest energy-consuming processes in steel production. Using coke dry quenching (CDQ) and top-pressure recovery turbine (TRT) technologies can effectively reduce the EI of coking and BF. In 2000, the implementation rates of CQD and TRT technologies of China’ steel industry were only 12% and 14%, respectively (Table2). After years of development, the implementation rates of CQD and TRT technologies increased to 90% and 99% in 2015, respectively, and the total number of CDQ units in China now exceeds 200 sets (processing capacity 25,000 t/h). Approximately 700 TRT-equipped BFs exist in China, of which 597 are gas dry dedusting equipment [19,20].

Table 2. Implementation rates of CDQ and TRT in China.

Year CDQ TRT 2000 12% 14% 2005 26% 74% 2010 85% 95% 2015 90% 99%

2.3.2. By-Product Gas Recovery and Utilization By-product gas resources are the most important secondary energy resource in steel production. A large amount of energy can be saved by recycling and utilizing by-product gas resources. The recovery and utilization rates of China’s key steel enterprises are relatively high (Table3), and over 98% of the BF gas and coke oven gas produced was recycled, and converter gas recovery was 114 m3/t in 2017 [19,20]. Metals 2020, 10, 302 6 of 18

Table 3. Recovery and utilization of by-product gas in China’s key steel enterprises.

Utilization Rate of Utilization Rate of Converter Gas Recovery Year BF Gas (%) Coke Oven Gas (%) (m3/t) 2016 98.26 98.16 115 2017 98.34 98.77 114

2.3.3. Power Generation from Secondary Energy Energy consumption for steel production only accounts for 30% of the total energy consumption,

Metalsand 2020 the, 10,remaining x FOR PEER REVIEW 70% of the energy consumed is converted into various forms of waste6 heat of 19 and residual energy, such as by-product gas resources, the sensible heat of slag, and the waste heat of productsproducts [20,21 [20]., 21These]. These waste waste heat heatand andresidual residual energy energy resources resources can canbe used be used to preheat to preheat materials, materials, generategenerate steam steam or self or- self-containedcontained power power plants, plants, and andgenerate generate power. power. In 2017,In 2017, power power generation generation from from secondary secondary energy energy resource resourcess in China’s in China’s key key steel steel enterprises enterprises accountedaccounted for approximately for approximately 41.3% 41.3% of the of total the total electricity electricity consumption consumption (Figure (Figure 5), of5), which of which 57.8% 57.8% originatedoriginated from from by-product by-product gas, gas,16.2% 16.2% from from TRT, TRT, 11.7% 11.7% from from CDQ, CDQ, 5.0% 5.0% from from sintering sintering waste waste heat, heat, and and9.3% 9.3% from from other other seconda secondaryry energy energy sources sources [19]. [19 ].

FigureFigure 5. Power 5. Power generation generation from from secondary secondary energy energy resources resources in China’s in China’s key steel key steel enterprises. enterprises. 2.4. Energy Consumption 2.4. Energy Consumption Steel enterprises use numerous energy evaluation indicators, such as comprehensive EI and Steel enterprises use numerous energy evaluation indicators, such as comprehensive EI and comparable EI, as well as EI indicators for coking, sintering, pelletizing, ironmaking, steelmaking, and comparable EI, as well as EI indicators for coking, sintering, pelletizing, ironmaking, steelmaking, rolling process. In this section, the EI of China’s steel industry is comprehensively described through and rolling process. In this section, the EI of China’s steel industry is comprehensively described an exhaustive analysis of various indicators. through an exhaustive analysis of various indicators. 2.4.1. Overall Energy Consumption 2.4.1. Overall Energy Consumption The comprehensive EI includes all forms of energy directly consumed by steel enterprises and theirThe auxiliarycomprehensive production EI includes systems all and forms the of total energy amount directly of energy consumed actually by steel consumed enterprises by subsidiary and theirproduction auxiliary production systems directly systems serving and t thehe total production amount of of steel energy enterprises actually [ 22consumed]. The comprehensive by subsidiary EI is productioncalculated systems as follows: directly serving the production of steel enterprises [22]. The comprehensive EI is calculated as follows: Ei e = , (1) Comprehensive P 퐸i 푒Comprehensive = , (1) where Ei is the energy consumption of the i category energy,푃 kgce; P is the steel production, t. where 퐸푖From is the 2006 energy to 2017, consumption the comprehensive of the i category EI of China’s energy, steel kgce industry; 푃 is the decreased steel production, from 645 t. kgce/t to 571From kgce 2006/t (decrease to 2017, the by comprehensive 11.5%) [19,23,24 EI]. Thisof China’s reduction steel showsindustry that decreased China’s steelfrom enterprises645 kgce/t to have 571 madekgce/t remarkable (decrease by progress 11.5%) in[19,23,24 increasing]. This their reduction overall energy shows ethatfficiency China’s (Figure steel6). enterprises have made remarkable progress in increasing their overall energy efficiency (Figure 6.).

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Figure 6. Comprehensive EI of China’s steel industry. 2.4.2. EI of the Production Process 2.4.2. EI of the Production Process The EI of the production process reflects the energy consumption of the main production processes The EI of the production process reflects the energy consumption of the main production in steel production. From 2006 to 2017, the EI of the production process of China’s key steel enterprises processes in steel production. From 2006 to 2017, the EI of the production process of China’s key steel decreased dramatically: The EI of sintering, pelletizing, coking, BF, and steel processing respectively enterprises decreased dramatically: The EI of sintering, pelletizing, coking, BF, and steel processing decreased by 12.8%, 20.1%, 19.0%, 9.6%, and 5.0%, respectively (Table4)[19,23–25]. respectively decreased by 12.8%, 20.1%, 19.0%, 9.6%, and 5.0%, respectively (Table 4) [19,23–25].

Table 4. The EI of production process of China’s key steel enterprises. (Unit: kgce/t). Table 4. The EI of production process of China’s key steel enterprises. (Unit: kgce/t). Year Sintering Pelletizing Coking BF Converter EAF Processing Year Sintering Pelletizing Coking BF Converter EAF Processing 2006 200655.61 55.6133.08 33.08 123.11 433.08 433.08 9.099.09 81.2681.26 64.9864.98 2007 55.21 30.12 121.72 426.84 6.03 81.34 63.08 2007 200855.21 55.4930.12 30.49 121.72 119.97 426.84 427.72 5.746.03 81.5281.34 59.5863.08 2008 200955.49 54.5230.49 29.96 119.97 113.97 427.72 410.55 2.785.74 73.4481.52 57.6659.58 2010 52.65 29.39 105.89 407.76 0.16 73.98 61.69 2009 54.52 29.96 113.97 410.55 − 2.78 73.44 57.66 2011 54.34 29.60 106.65 404.07 3.21 69.00 60.93 2010 52.65 29.39 105.89 407.76 −−0.16 73.98 61.69 2012 50.60 28.75 102.72 401.82 6.08 67.53 57.31 − 2011 201354.34 49.7629.60 28.58 106.65 99.87 404.07 399.88 7.81−3.21 62.3869.00 60.3260.93 − 2012 201450.60 49.4828.75 27.12 102.72 98.15 401.82 388.70 8.73−6.08 66.0667.53 63.3057.31 − 2015 48.53 26.72 99.66 384.43 11.89 60.38 63.44 2013 49.76 28.58 99.87 399.88 − −7.81 62.38 60.32 2016 47.78 26.16 97.46 387.75 12.24 65.90 61.78 − 2014 201749.48 48.4927.12 26.17 98.15 99.67 388.70 391.37 14.26−8.73 60.2266.06 61.7363.30 2015 48.53 26.72 99.66 384.43 −−11.89 60.38 63.44 2016 47.78 26.16 97.46 387.75 −12.24 65.90 61.78 2.4.3. Comparison of EIs between Steel Industries in China and the World 2017 48.49 26.17 99.67 391.37 −14.26 60.22 61.73 Comparable EI is used to compare the energy consumption of steel production in different enterprises2.4.3. Comparison or countries; of EIs thisbetween parameter Steel representsIndustries thein China sum of and energy the W consumptionorld in each production process [26]. The Comparable EI is calculated as: Comparable EI is used to compare the energy consumption of steel production in different enterprises or countries; this parameter representsX the sum of energy consumption in each eComparable = (1/P) Pi ei + I + J + K , (2) production process [26]. The Comparable EI is calculated× as: where Pi is the production of ie process,Comparable t; = (1/P)(∑ Pi × ei + I + J + K), (2) ei is the average energy consumption of the i process, kgce/t product; P whereI, J,i andis theK productionare the energy of i process, consumption t; for processing and transportation of fuel, energy e consumptioni is the average for locomotive energy transportation,consumption of and thechanges i process, in kgce/t enterprise product; energy stock, respectively. I, J K According, and toare the the International energy consumption Energy Agency for processing (IEA) and the and Research transportation Institute of of fuel, Innovative energy Technologyconsumption forfor locomotive the Earth transportation, [27,28], Japan and possesses changes thein enterprise world’s energy most energy-estock, respectively.fficient steel industry.According All steel to the mills International in Japan useEnergy existing Agency technologies (IEA) and withthe Research minimal Institute potential of forInnovative further energy-conservationTechnology for the Earth measures. [27,28], Japan possesses the world’s most energy-efficient steel industry. All steel mills in Japan use existing technologies with minimal potential for further energy-conservation measures.

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China’s steel industry has achieved good results in reducing energy consumption over the last China’s20 years steel ( industryFigure 7). However, has achieved a wide goodgap remains results between in reducing the steel industries energy consumption of China and Japan over the last 20 years (Figure[8]. 7). However, a wide gap remains between the steel industries of China and Japan [ 8].

FigureFigure 7. Comparable 7. Comparable EI EI of of steel steel enterprisesenterprises in inChina China and Japan. and Japan.

2.5. CO2 Emissions2.5. CO2 Emissions TraditionalTraditional steel production steel production relies relies heavily heavily on on fossil fossil fuels, fuels, such such as coal as coaland coke. and Therefore, coke. Therefore, China’s steel industry has become the second largest national emitter of CO2 after the power industry. China’s steel industry has become the second largest national emitter of CO after the power industry. In 2015, CO2 emitted by China’s steel enterprises accounted for over 15% of the2 country’s total CO2 In 2015, COemissions2 emitted [5,6 by]. China’s steel enterprises accounted for over 15% of the country’s total CO2 emissions [5,6].CO2 emission from steel enterprises is mainly caused by coal combustion. Coal accounts for approximately 80% of the energy consumption structure in China’s steel enterprises [4]. According CO2 emission from steel enterprises is mainly caused by coal combustion. Coal accounts for to statistics, CO2 emissions from China’s iron-making system (sintering, pelletizing, coking, and blast approximatelyfurnace) 80% account of the for energy approximately consumption 85% of structure the total emissions in China’s from steel the enterprises steel industry [ 4[29,30]. According]. to statistics, COTherefore,2 emissions reducing from CO2 emissions China’s from iron-making the iron front system process (sintering, is imperative. pelletizing, coking, and blast furnace) accountIn for 2015, approximately at the Paris Climate 85% ofConference, the total the emissions Chinese from government the steel proposed industry reducing [29,30 CO].2 Therefore, emissions per unit GDP by 65% compared with 2005 levels by 2030 and establishing a national carbon reducing CO2 emissions from the iron front process is imperative. emissions trading market in 2017 [30]. The latter proposal will integrate eight industries, including In 2015,electricity, at the steel Paris, and Climate cement, Conference, into one system the to Chinese promote overall government carbon emission proposed reduction. reducing CO2 emissions perTherefore, unit GDPChina’s by steel 65% enterprises compared are facing with 2005the severe levels situation by 2030 of CO and2 emission establishing reduction. anational carbon emissions tradingUsing market scrap instead in 2017 of iron [30 ore]. The can directly latter proposalreduce the willproduction integrate of the eight iron-makin industries,g system including electricity, steel,and drastically and cement, reduce intoenergy one consumption system to and promote CO2 emissions. overall The carbon EI of emissiondirect steel reduction.-making with Therefore, scrap is only 30% that of the BF–BOF route. This finding indicates that using one ton of scrap in China’s steel enterprises are facing the severe situation of CO emission reduction. China’s steel production can save 350 kgce and reduce CO2 emissions2 by 1.4 tons [31]. Using scrapAt present, instead scrap of iron consumption ore can directlyper ton of reduce steel in China the production is far below ofthe theworld’s iron-making average level system and drastically(specific reduce description energy consumption is in Section 3.1). and In COthe 2future,emissions. China’s Therecyclable EI of scrap direct resources steel-making will increase with scrap is only 30% thatsubstantially of the BF–BOF as the scrap route. consumed This in finding previous indicates decades gradually that using reaches one their ton recycling of scrap cycle, in China’sand steel increasing the use of scrap steel in steel production will become an inevitable trend. production can save 350 kgce and reduce CO2 emissions by 1.4 tons [31]. At present,3. Comparison scrap consumptionof Steel Industries per between ton of China steel and in the China World is far below the world’s average level (specific descriptionOver the is last in Section two decades, 3.1). CInhina’s the future, steel industry China’s has recyclable made remarkable scrap achievements resources will in increase substantiallyreducing as the its scrap EI by consumed improving technology in previous levels decades and promoting gradually energy reaches-saving theirtechnologies; recycling these cycle, and increasingefforts the use have of scrapresulted steel in considerable in steel production reductions in will the become energy consumption an inevitable of steel trend. production. However, a gap still remains between the EIs of key enterprises between China and the world’s

3. Comparison of Steel Industries between China and the World Over the last two decades, China’s steel industry has made remarkable achievements in reducing its EI by improving technology levels and promoting energy-saving technologies; these efforts have resulted in considerable reductions in the energy consumption of steel production. However, a gap still remains between the EIs of key enterprises between China and the world’s advanced level. Therefore, in the future, reducing energy consumption will remain a key issue for China’s steel industry. In this section, the main reasons behind this EI gap are analyzed by comparing steel production in China and other countries. Metals 2020, 10, x FOR PEER REVIEW 9 of 19 Metals 2020, 10, 302 9 of 18 advanced level. Therefore, in the future, reducing energy consumption will remain a key issue for China’s steel industry. In this section, the main reasons behind this EI gap are analyzed by comparing 3.1. Difference in Scrap Ratio steel production in China and other countries. Iron ore and scrap steel are the two main raw materials for steel production. Compared with that of iron3.1. ore, Difference using in scrap Scrap in Ratio steel production can save energy and resources by reducing the production of iron-makingIron ore systems. and scrapSR steelis used are the to definetwo main scrap raw consumption materials for steel in steel production. production: Compared with that of iron ore, using scrap in steel production can save energy and resources by reducing the Scrap consumption production of iron-making systems.Scrap SRratio is used= to define scrap consumption in steel production: (3) Scrapsteel consumption production Scrap ratio= steel production (3) Over the last 10 years, the SR of the global steel industry remained at 35%–40%, and is approximately 37% on average.Over the Among last 10 the years, world’s the SR major of the steel-producing global steel industry countries, remained the United at 35% States–40%, has and the highest is SR ofapproximately 75%, which 37% fluctuates on average. considerably. Among the The world’s EU’s major SR is steel also-producing high at approximately countries, the United 55%–60%, SouthStates Korea’s has average the highest is approximately SR of 75%, which 50%, fluctuates and Japan’s considerably. average is The approximately EU’s SR is also35% high [32]. at The SR approximately 55%–60%, South Korea’s average is approximately 50%, and Japan’s average is of China’s steel industry was only 11.2% in 2016. The consumption of scrap resources per ton of approximately 35% [32]. The SR of China’s steel industry was only 11.2% in 2016. The consumption steelof in scrap China resources is considerably per ton of lower steel in than China the is globalconsiderably average, lower and than this the gap global has average, a negative and impact this on energygap conservation has a negative because impact processing on energy conservation of iron ore into because hot metalprocessing requires of iron a large ore into amount hot metal of energy and resources.requires a large amount of energy and resources. A lowA SRlow leads SR leads to the to dependence the dependence of China’s of China’s steel steel enterprises enterprises on ironon iron ore ore as the as themain main raw raw material. The SRmaterial. and iron–steel The SR and ratios iro ofn– keysteel steel ratios enterprises of key steel in China enterprises from 2006in China to 2016 from are 2006 calculated to 2016 according are to Chinacalculated Steel according Yearbook to [China33]. As Steel shown Yearbook in this [33]. Figure As shown8, the in this scrap Figure ratio 8, the of China’sscrap ratio key of China’s enterprises declinedkey enterprises from 2006 declined to 2016, from and the 2006 corresponding to 2016, and the iron–steel corresponding ratio showed iron–steel an rat oppositeio showed increasing an trend.opposite This dependence increasing trend. explains This why dependence the iron–steel explains ratio why of the the iron country’s–steel ratio iron-making of the country’s system iron is higher- making system is higher than that of other countries. than that of other countries.

Figure 8. Scrap ratio and iron–steel ratio of China’s key steel enterprises. Figure 8. Scrap ratio and iron–steel ratio of China’s key steel enterprises.

In 2016,In 201 China’s6, China’s iron–steel iron–steel ratio ratio was was 0.867; 0.867 by; by comparison, comparison, the theglobal global averageaverage iron iron–steel–steel ratio ratio was 0.734.was The 0.7 global34. The averageglobal average was only was 0.573only 0. after573 after deducting deducting China’s China’s iron–steel iron–steel ratio ratio [[20].20]. The iron iron–steel– ratiossteel of theratios United of the StatesUnited andStates Germany and Germany are 0.333 are 0. and333 and 0.646, 0.646 respectively., respectively. Generally, Generally, ifif the iron iron-steel- ratiosteel increases ratio increases by 0.1, the by 0.1, comprehensive the comprehensive EI of steelEI of steel production production will will increase increase by by about about 50 50 kgce kgce/t/t,, so the comprehensiveso the comprehensive EI of China EI of is China about is 110–250 about 110 kgce–250/t kgce/t higher higher than than the advancedthe advanced level level just just because because of the highof iron-steel the high ir ratioon-steel [20]. ratio [20].

3.2. Differences in Production Structure

Energy consumption and pollutant emissions in steel enterprises are mainly concentrated in iron-making systems (from the iron ore entering the plant to coking, sintering, pelletizing, and ironmaking). Therefore, the energy consumption of the BF–BOF route is generally higher than that of Metals 2020, 10, x FOR PEER REVIEW 10 of 19

3.2. Differences in Production Structure

Metals 2020Energy, 10, 302consumption and pollutant emissions in steel enterprises are mainly concentrated in 10 of 18 iron-making systems (from the iron ore entering the plant to coking, sintering, pelletizing, and ironmaking). Therefore, the energy consumption of the BF–BOF route is generally higher than that theof the EAF EAF route route (Figure (Figure9 ).9). ComparedCompared with with the the BF BF–BOF–BOF route, route, direct direct steelmaking steelmaking with scrap with via scrap the via the EAFEAF routeroute can save approximately approximately 60% 60% of the of theenergy energy expenditure expenditure to produce to produce steel and steel reduce and CO reduce2 CO2 emissionsemissions by 80% [ [3434––3737]. ].

Figure 9. Energy intensity of the BF–BOF and EAF routes. Figure 9. Energy intensity of the BF–BOF and EAF routes Increasing the use of the EAF route can reduce energy consumption in steel production. However, Increasing the use of the EAF route can reduce energy consumption in steel production. production through EAF is limited by the availability of scrap steel resources. The actual situation of However, production through EAF is limited by the availability of scrap steel resources. The actual scrapsituation resources of scrap varies resources greatly varies in greatly different in different countries countries and regions and regions around around the the world. world. Some Some countries (regions)countries have(regions) abundant have abundant scrap resourcesscrap resources and lowand low prices; prices; in in this this case, case, additionaladditional EAF EAF steel steel plants canplants be builtcan be and built additional and additional scrap scrap steel steel can can be consumedbe consumed in in converters. converters. ForFor example,example, in in the the United States,United the States, proportion the proportion of EAF of steel EAF accountssteel accounts for overfor over 60% 60% of theof the total total crude crude steel steel production. production. In some developingIn some developing countries countries with insu withffi insufficientcient scrap scrap resources, resources, the the BF–BOF BF–BOF route route remains remains the the mainmain mode of steelmode production. of steel production. For example, For example, in China, in China, the EAF the steelEAF steel ratio ratio has has hovered hovered at approximatelyat approximately 10% over the10% last over few the years last few [7]. years [7]. Insufficient scrap storage is the main reason behind the low SR in China. Scrap recycling has a Insufficient scrap storage is the main reason behind the low SR in China. Scrap recycling has a certain cycle, and China began to use a large number of steel products in 2000. Thus, a large gap in certain cycle, and China began to use a large number of steel products in 2000. Thus, a large gap in scrap resources exists in China. Therefore, over the last 30 years, China’s steel production growth has scrapmainly resources originated exists from in the China. BF–BOF Therefore, route, and over the production the last 30 of years, EAF steel China’s has been steel stable production due to the growth has mainlylimitation originated of scrap quantity. from the BF–BOF route, and the production of EAF steel has been stable due to the limitationFrom of 2000 scrap to quantity. 2017, the production of China’s BF–BOF route rose by over 800%; thus, the proportionFrom 2000 of the to EAF 2017, route the in production China has ofcontinuously China’s BF–BOF declined route (Figure rose 10). by In over 2017, 800%; China’s thus, BF the–BOF proportion ofproduction the EAF routeaccounted in China for 90.7% has continuously of total steel declinedproduction, (Figure while 10its). EAF In 2017, production China’s accounted BF–BOF for production accountedonly 9.3%, forwhich 90.7% is far of below total steelthe world production, average whilelevel (28%) its EAF [3]. production accounted for only 9.3%, which Metals 2020, 10, x FOR PEER REVIEW 11 of 19 is far below the world average level (28%) [3].

Figure 10. Development of the BF–BOF and EAF routes in China. Figure 10. Development of the BF–BOF and EAF routes in China.

3.3. Differences in Energy Structure According to IEA statistics, the energy consumption of the steel industry in 2017 accounted for 17% of the world’s total industrial energy consumption. In terms of total energy consumption, coal is the main energy source (64% of the total energy consumption), followed by electricity (20% of the total energy consumption) and natural gas (11% of the total energy consumption) [4]. Oil contributes only 1% of the energy consumption. The remaining energy consumption is provided by other types of energy, such as biomass (Figure 11).

Figure 11. Energy structure of the world’s steel industry.

The energy structures of different countries vary remarkably. For example, coal and natural gas account for 76% and 2% of energy consumption in China’s steel industry, respectively [4]. By contrast, only 24% of the energy consumption of the United States comes from coal; 47% comes from natural gas (Figure 12). The energy structures of different steel-producing countries differ, and the industrial conversion efficiencies of different kinds of energy vary. Thus, differences in energy structure will have a certain impact on the energy efficiency of steel production.

Metals 2020, 10, x FOR PEER REVIEW 11 of 19

Metals 2020, 10, 302 Figure 10. Development of the BF–BOF and EAF routes in China. 11 of 18

3.3. Differences in Energy Structure 3.3. Differences in Energy Structure According to IEA statistics, the energy consumption of the steel industry in 2017 accounted for According to IEA statistics, the energy consumption of the steel industry in 2017 accounted for 17% of the world’s total industrial energy consumption. In terms of total energy consumption, coal 17% of the world’s total industrial energy consumption. In terms of total energy consumption, coal is is the main energy source (64% of the total energy consumption), followed by electricity (20% of the the main energy source (64% of the total energy consumption), followed by electricity (20% of the total total energy consumption) and natural gas (11% of the total energy consumption) [4]. Oil contributes energy consumption) and natural gas (11% of the total energy consumption) [4]. Oil contributes only only 1% of the energy consumption. The remaining energy consumption is provided by other types 1% of the energy consumption. The remaining energy consumption is provided by other types of of energy, such as biomass (Figure 11). energy, such as biomass (Figure 11).

Figure 11. Energy structure of the world’s steel industry. Figure 11. Energy structure of the world’s steel industry. The energy structures of different countries vary remarkably. For example, coal and natural gas account for 76% and 2% of energy consumption in China’s steel industry, respectively [4]. By contrast, The energy structures of different countries vary remarkably. For example, coal and natural gas only 24% of the energy consumption of the United States comes from coal; 47% comes from natural account for 76% and 2% of energy consumption in China’s steel industry, respectively [4]. By contrast, gas (Figure 12). The energy structures of different steel-producing countries differ, and the industrial only 24% of the energy consumption of the United States comes from coal; 47% comes from natural conversion efficiencies of different kinds of energy vary. Thus, differences in energy structure will have gas (Figure 12). The energy structures of different steel-producing countries differ, and the industrial a certainMetals impact 2020, 10 on, x FOR the PEER energy REVIEW effi ciency of steel production. 12 of 19 conversion efficiencies of different kinds of energy vary. Thus, differences in energy structure will have a certain impact on the energy efficiency of steel production.

Figure 12. Energy structures of the steel industries of China (left) and the United States (right) in 2017. Figure 12. Energy structures of the steel industries of China (left) and the United States (right) in 2017. In industrial production, the energy efficiency of natural gas is higher than that of coal regardless of their useIn inindustrial fuel or powerproduction, generation, the energy and efficiency the carbon of natural emission gas is ofhigher natural than gasthat isof lowercoal regardless than that of 3 coal. Usingof their 1 use m inof fuel natural or power gas generation, can save 0.76–1.19 and the carbon kgce andemission reduce of natural carbon gas emissions is lower than by 3.33–5.01 that of g comparedcoal. U withsing the1 m using3 of natural coal [gas38]. can At save present, 0.76–1.19 the mainkgce and energy reduce source carbon of emissions steel production by 3.33–5.01 in China g is coal,compared and the with proportion the using of coal natural [38]. At gas present, in the the energy main energy consumption source of ofsteel China’s production steel in industry China is is coal, and the proportion of natural gas in the energy consumption of China’s steel industry is drastically lower than the world average; this situation is unfavorable for energy savings and carbon emission reduction.

3.4. Differences in Industrial Concentration In China, EI varies among steel enterprises of different scales, and the EI of small steel enterprises is generally higher than that of key steel enterprises, due to small size production equipment being mostly used in small steel enterprises, which are of high production energy consumption [39]. In addition, the management and technological advantages of large-scale steel enterprises allow them to consume less energy than small-scale enterprises. Over the past decade, the concentration of China’s steel industry has shown a downward trend (Figure 13), with the concentration of the top 10 enterprises declining from 45% in 2001 to 36% in 2016. By contrast, in Japan, the concentration of the top five enterprises accounted for over 80% of the country’s total steel production, and the large-scale production of steel industry has been achieved [7,40,41].

Figure 13. Industrial concentration of China’s steel industry.

Metals 2020, 10, x FOR PEER REVIEW 12 of 19

Figure 12. Energy structures of the steel industries of China (left) and the United States (right) in 2017.

In industrial production, the energy efficiency of natural gas is higher than that of coal regardless of their use in fuel or power generation, and the carbon emission of natural gas is lower than that of coal. Using 1 m3 of natural gas can save 0.76–1.19 kgce and reduce carbon emissions by 3.33–5.01 g compared with the using coal [38]. At present, the main energy source of steel production in China isMetals coal,2020 and, 10 , the 302 proportion of natural gas in the energy consumption of China’s steel industry12 of is18 drastically lower than the world average; this situation is unfavorable for energy savings and carbon emissiondrastically reduction. lower than the world average; this situation is unfavorable for energy savings and carbon emission reduction. 3.4. Differences in Industrial Concentration 3.4. DiInff China,erences EI in varies Industrial among Concentration steel enterprises of different scales, and the EI of small steel enterprises is generallyIn China, higher EI varies than among that of steel key enterprisessteel enterprises, of different due scales,to small and size the production EI of small steelequipment enterprises being is mostlygenerally used higher in small than thatsteel of enterprises, key steel enterprises, which are due of tohigh small production size production energy equipment consumption being [39]. mostly In addition,used in small the manage steel enterprises,ment and technological which are of highadvantages production of large energy-scale consumption steel enterprises [39]. Inallow addition, them tothe consume management less energy and technological than small-scale advantages enterprises. of large-scale steel enterprises allow them to consume less energyOver the than past small-scale decade, the enterprises. concentration of China’s steel industry has shown a downward trend (FigureOver 13), the with past the decade, concentrat the concentrationion of the top of 10 China’s enterprises steel industrydeclining has from shown 45% ain downward 2001 to 36% trend in 2016.(Figure By 13 contrast,), with in the Japan, concentration the concentration of the top of 10the enterprises top five enterprises declining accounted from 45% for in over 2001 80% to 36% of the in country’s2016. By total contrast, steel inproduction, Japan, the and concentration the large-scale of the production top five enterprisesof steel industry accounted has been for overachieved 80% [7,40,41of the country’s]. total steel production, and the large-scale production of steel industry has been achieved [7,40,41].

FigureFigure 13. 13. IndustrialIndustrial concentration concentration of of China’s China’s steel steel industry. industry. Increasing the production proportion of large-scale enterprises is a development trend in China’s steel industry. According to “Adjustment Policy of Iron and Steel Industry” published in 2015, the concentration of the top 10 steel enterprises in China should not be less than 60% by 2025, and three or five super-large steel enterprise groups with strong competitiveness in the global scope should be formed.

4. Development Directions for Energy Savings and Emission Reduction in China’s Steel Industry After decades of rapid development, China’s steel production has entered the peak arc region, and, in the medium and long term, overall steel production is not expected to increase. According to relevant plans published by the Chinese government, in the future, China’s steel industry will focus on industrial restructuring to solve problems arising from previous rapid development stage. Eliminating backward production capacity (technological upgrading), promoting energy-saving technologies, and restructuring production are key directions for energy savings and emission reduction.

4.1. Eliminating Dackward Production Capacity Overcapacity, a common problem currently faced by the global steel industry, presents a very serious challenge to China. In 2015, the excess capacity of China’s steel industry was 336.2 Mt, accounting for 46% of the global excess capacity [42]. At the same time, China also retains backward capacity, which affects the total energy consumption of steel production. Against this background, the Chinese government published “Opinions on the Iron and Steel Industry to Eliminate Overcapacity and Realize Development from Difficulties,” which demands the following: the crude steel production Metals 2020, 10, 302 13 of 18 capacity should be reduced by 10–150 Mt within five years from 2016, and future development should aim at industry merging and reorganization, industrial structure optimization, and resource utilization efficiency improvement. China strictly enforces the energy conservation law and defines backward production capacity in accordance with process energy consumption. Steel production capacity that fails to meet mandatory standards, such as “Energy Consumption Limit for Products of Major Processing Units in Crude Steel Production”, should be reformed and upgraded within six months (Table5). The steel production involved in this effort is estimated to range from 10 Mt and 150 Mt; this amount will effectively improve the energy efficiency of China’s steel industry.

Table 5. Energy consumption requirements for new and reformed steel enterprises [43].

Common Special Types of Enterprises Coking Sintering Blast Furnace Converter Steel EAF Steel EAF 122 (Top New construction and ≤ transformation loading) 50 370 25 90 159 127 (Tamping) ≤ ≤ ≤− ≤ ≤ enterprises ≤ 150 (Top ≤ 435 Existing enterprises loading) 55 ≤ 10 92 171 ≤ 485 (Vanadic ≤− ≤ ≤ 155 (Tamping) ≤ ≤ titanomagnetite)

China’s steel industry eliminated backward production capacity by 65 Mt in 2016 and by 55 Mt in 2017. The productivity utilization rate has increased from approximately 70% in 2015 to over 85% in 2017 [44], as shown in Table6.

Table 6. Effect of the elimination of backward productivity.

Parameter 2014 2015 2016 2017 Capacity (Mt) 1151 1134 1069 1019 Capacity reduction (Mt) 31.1 17.1 65 50 Capacity utilization rate (%) 71.5 70.9 75.6 86.65

4.2. Research and Promotion of Energy-Saving and Emission-Reduction Technologies The promotion and application of energy-saving and secondary energy-recovery technologies in steel production has always been the focus of the energy-saving work of China’s steel industry. After years of development, some major energy-saving technologies have been widely implemented in China. These technologies include sintering waste heat recovery, TRT power generation capacity, and converter gas recovery. In the future, the progress of research and development of energy-saving technologies will further decrease the EI of steel production in China. Several domestic steel industry researchers have begun to actively pay attention to research on topics such as high-temperature and pressure dry quenching, heat recovery from coke oven riser waste, coal humidification, heat recycling from sintering waste gas waste, heat recovery from slag washing water waste, heat recovery from converter flue gas waste, comprehensive utilization of pure dry dust removal, and high-parameter gas-generating units [44] (Table7). Metals 2020, 10, 302 14 of 18

Table 7. Major technological progress and their energy-saving effect in the future.

No. Technology Energy Saving Effect Development Plan Coal Saving (Mtce) add more than 30 new equipments, High temperature and 1 40kgce/t coke involving 57 Mt of coke production 2.28 pressure CDQ capacity 90 kg steam (0.6 MPa)/t add more than 30 new waste heat Waste heat recovery of 2 coke (equivalent to recovery equipments, involving 57 Mt of 0.51 coke oven riser 9 kgce/t) coke production capacity add more than 10 new equipments, 3 Coal moisture control 6 kgce/t coke involving 20 Mt of coke production 0.12 capacity Recycling of waste about 40 new units, involving 80 Mt of 4 4 kgce/t sinter 0.32 Metals 2020, 10heat, x fromFOR sinteringPEER REVIEW sintering production capacity 15 of 19 40 ktce/heating cycle Waste heat recovery of add more than 7000 m2 heating area, of 5 (1 million m2 of heating 2.80 slag washing water which 2300 m2 have been added in 2016 area)ktce compared with generator units in 30 Comprehensive utilization of waste medium temperature and enterprises (steel applied to 200 converters, involving 6 heat from converter 8 kgce/t steel 2.40 medium pressure unit300 Mt of steel productionproduction over 5 flue gas- pure dry dedusting (enterprises with steel Mt/year), involving 250 thermalproduction efficiency of 10 Mt/year) Mt of steel production increased by over 5%, applied to 135/65/54 MW high parameter 40 ktce compared withTotal 9.43 High parameter gas gas generator units in 30 enterprises (steel 7 medium temperature and 1.00 power generator unit production over 5 Mt/year), involving medium pressure unit 250 Mt of steel production 4.3. Production Structure Transformation(enterprises with steel production of 10 Mt/year) A large amount of scrap steel resourcesTotal accumulated by China is expected to 9.43 reach their recycling cycle in recent years. Under these conditions, utilization of scrap steel could be expected to increase4.3. Production over the Structure next few Transformation years. According to estimations of recyclable period of steel products in China, during the 13th Five- A large amount of scrap steel resources accumulated by China is expected to reach their recycling Year Plan period, in addition to scrap vehicles, many bridges, houses and military equipment have cycle in recent years. Under these conditions, utilization of scrap steel could be expected to increase reached the scrap period. This phenomenon will further increase China’s scrap stock. The amount of over the next few years. recyclable scrap steel is expected to reach approximately 200 Mt in 2020, 272.2 Mt in 2025, and 346 Mt According to estimations of recyclable period of steel products in China, during the 13th Five-Year in 2030 [37] (Figure 14). Therefore, increasing the scrap ratio is an inevitable trend in the development Plan period, in addition to scrap vehicles, many bridges, houses and military equipment have reached of China’s iron and steel industry. the scrap period. This phenomenon will further increase China’s scrap stock. The amount of recyclable The 13th Five-Year Plan is anticipated to be a major turning point for the scrap industry. Efforts scrap steel is expected to reach approximately 200 Mt in 2020, 272.2 Mt in 2025, and 346 Mt in 2030 [37] to rationally utilize scrap steel resources, increase the proportion of EAF steel, and realize structural (Figure 14). Therefore, increasing the scrap ratio is an inevitable trend in the development of China’s and energy savings will have tremendous potential for growth and development. iron and steel industry.

Figure 14. Amount of recyclable scrap resources [37], with permission from World Steel Association 2017. Figure 14. Amount of recyclable scrap resources [37], with permission from World Steel Association 2017.

China’s crude steel production has been in the downward zone of the peak arc, and steel production is not expected to increase in the medium and long term. Pig iron production shows the same characteristics, and, given the gradual increase in scrap resources, the average decline rate of pig iron production over the long run will be higher than that of crude steel. At present, over 65% of China’s total iron production is produced by imported iron ore [33]. From a long-term perspective, the demand for iron ore will continue to decline [44]( Figure 15).

Metals 2020, 10, 302 15 of 18

The 13th Five-Year Plan is anticipated to be a major turning point for the scrap industry. Efforts to rationally utilize scrap steel resources, increase the proportion of EAF steel, and realize structural and energy savings will have tremendous potential for growth and development. China’s crude steel production has been in the downward zone of the peak arc, and steel production is not expected to increase in the medium and long term. Pig iron production shows the same characteristics, and, given the gradual increase in scrap resources, the average decline rate of pig iron production over the long run will be higher than that of crude steel. At present, over 65% of China’s total iron production is produced by imported iron ore [33]. From a long-term perspective, the demand for iron ore will continue to decline [44] (Figure 15). Metals 2020, 10, 302 16 of 19

Figure 15. Trend of iron ore and scrap consumption by China’s steel industry. Figure 15. Trend of iron ore and scrap consumption by China’s steel industry

At present, 70% of energy consumption and 85% of CO2 emissions of China’s steel industry are At present, 70% of energy consumption and 85% of CO2 emissions of China’s steel industry are concentrated in converting iron ore into molten iron [29,30]. The SR of China’s steel industry hovering concentrated in converting iron ore into molten iron [29,30]. The SR of China’s steel industry hovering between 10% and 15% over the last decade, and it will be not less than 25% in 2025 according to the between 10% and 15% over the last decade, and it will be not less than 25% in 2025 according to the development plan of China s steel industry. This will make a significant contribution to reducing the development plan of China0′s steel industry. This will make a significant contribution to reducing the energyenergy consumption consumption ofof ChinaChina0′ss steel steel industry. industry. 5. Results and Discussion 5. Results and Discussion 5.1. Conclusions 5.1. Conclusions ThisThis paper paper presentspresents a comprehensive overview overview of ofthe the development development and and current current situation situation of of China’sChina’s steel steel industry,including industry, including steel production,steel producti steelon, consumption, steel consumption, production production structure development,structure energy-savingdevelopment, technologyenergy-saving development, technology development, overall energy overall consumption, energy consumption, process energy process consumption, energy andconsumption, carbon emissions. and carbon The emissions. future development The future ofdev theelopment energy-saving of the energy-saving work of China’s work steel of China’s industry is alsosteel analyzed. industry is also analyzed. AtAt present, present, China’sChina’s steel production production is is not not expe expectedcted to toincrease increase in the in themedium medium and andlong longterm. term. PigPig iron iron productionproduction shows shows the the same same characteristics, characteristics, and andthe demand the demand for coke for and coke iron and ore ironwill also ore will alsocontinue continue to decline. to decline. Over the Over next thefew nextyears, few China years, can reduce China its can energy reduce consumption its energy and consumption carbon andemissions carbon by emissions eliminating by backward eliminating production backward capacity production (technological capacity upgrading), (technological implementing upgrading), implementingenergy-saving energy-saving technologies, technologies,increasing scrap increasing consumption, scrap consumption, and reducing andthe reducingproduction the of production iron- ofmaking iron-making systems. systems.

5.2. Policy Implications

5.2.1. Scientifically and Rationally Elimination of Backward Production Capacity Scientific and reasonable methods should be used to achieve the capacity removal of China’s steel industry. First, uneconomical and low value-added production capacity should be reduced. Second, illegal and irregular steel enterprises should be investigated and punished in accordance with the law. Third, industry regulations should be conscientiously implemented to eliminate backward production capacity. These regulations include “Standard Conditions for Iron and Steel Industry” (revised in 2015) and “Standardized Enterprise Management Measures for Iron and Steel Industry.”

Metals 2020, 10, 302 16 of 18

5.2. Policy Implications

5.2.1. Scientifically and Rationally Elimination of Backward Production Capacity Scientific and reasonable methods should be used to achieve the capacity removal of China’s steel industry. First, uneconomical and low value-added production capacity should be reduced. Second, illegal and irregular steel enterprises should be investigated and punished in accordance with the law. Third, industry regulations should be conscientiously implemented to eliminate backward production capacity. These regulations include “Standard Conditions for Iron and Steel Industry” (revised in 2015) and “Standardized Enterprise Management Measures for Iron and Steel Industry.”

5.2.2. Improvement of the Production Technology Level Special funds should be allocated to support the research and development of key energy-saving technologies. Energy savings and emission reduction in the steel industry should be treated as key aspects of national technological transformation. The government should increase their support for key special projects related to energy saving and emission reduction. For example, technology research should focus on key issues, such as insufficient power self-generation, low power generation efficiency, taxes and fees of power network, and the poor utilization of low-temperature waste heat in summer.

5.2.3. Normalization of the Scrap Steel Market The consumption of scrap resources in steel production will dramatically increase as the availability of recyclable scrap in China increases. At present, China’s scrap industry has four main problems: (1) the capacity of scrap processing only accounts for 30% of the social scrap volume; this value is far from the demand of the steel industry; (2) the quality of equipment available for scrap processing is low, and dismantling lines for automobiles has not yet been extensively established; (3) reliable statistical data for the classification of scrap resources and technical standards for the scrap processing products industry are lacking; and (4) the taxation of scrap import and distribution enterprises is not conducive to scrap recycling. Therefore, management of the scrap steel industry should be improved, and scientific processing and classified sales should be implemented to meet the needs of various users and provide strong support for the transformation of the production structure of the steel industry.

Author Contributions: K.H. and X.L. prepared and revised the manuscript under the supervision of L.W. All authors contributed to the general discussion. All authors have read and agreed to the published version of the manuscript. Funding: This work is financially supported by the National Key R&D Program of China (Grant No. 2016YFB0601101). Conflicts of Interest: The authors declare no conflict of interest.

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