China's green steel transition lags Beijing's targets, report says

China needs to accelerate its shift to producing steel from lower carbon-emitting furnaces in order to meet its target of 20 percent of steel output by 2030, a report by the Centre for Research on Energy and Clean Air (CREA) said on Tuesday.

China's slower-than-expected shift toward lower-carbon emission steel production has prolonged the dominance of coal-powered blast furnace steelmaking and allowed excess capacity to persist, said the Helsinki-based CREA in a report.

Beijing set a goal to produce 15 percent of its crude steel using the cleaner electric arc furnace (EAF) process by 2025, and to raise the share to 20 percent by the end of the decade.

But China's share of steel produced by electric arc furnaces is projected to rise from roughly 10 percent in 2025 to 12.4 percent by 2030, both falling short of policy targets, the report said.

CREA forecasts the share of greener steel to climb to around 30 percent by 2035 and more than 70 percent by 2060.

Raising the share of steel from the cleaner EAF process to 20 percent by 2030 could reduce blast furnace steel production by between 80 million and 120 million metric tons, equivalent to Japan's annual steel output, the report said.

With that increase in electric arc furnaces' share of output, carbon dioxide emissions in the hard-to-abate steel sector in 2030 would fall about 21 percent from 2020, the report said.

China's share in the global steel trade surged to 29 percent in 2025 from 13 percent in 2020, mainly driven by rapid export growth rather than a sharp rise in global demand, said Xinyi Shen, author of the report.

China's steel exports hit a record high of 119.02 million tons in 2025, customs data showed.

Reuters