A Facility-Level Phaseout Strategy for China’s Blast Furnaces to Address Multiple Policy Objectives

Abstract

Given the urgency of addressing climate change and the declining demand for steel, it is imperative that China’s iron and steel industry begin phasing out its primary production facility, the blast furnace. While there are various studies examining the decarbonization pathways for this sector and the resulting impacts, research exploring how to design decarbonization pathways that consider economic, environmental, and regional aspects equally is lacking. Moreover, it remains unclear how the individual heterogeneity of facilities affects the effectiveness of climate policies. In this study, we address the aforementioned research gaps by proposing a novel strategy that takes into account economic, carbon, water, and health factors in determining the priority for the closure of China’s blast furnaces. We developed a bottom-up framework that incorporates a facility-level data set, a stock-driven dynamic material analysis, and retirement metrics with uncertain parameters to measure the multidimensional impacts of various phaseout pathways for China’s blast furnaces. We have identified potential pathways that can improve environmental efficiency in multiple aspects compared with the cost-minimization pathway without impeding regional equality.