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Iron and steel supply chain to achieve the goal of "double carbon" path analysis and its impact on cost


Date:

2023-04-28

The iron and steel industry is an important basic industry of the national economy. Iron and steel products are used in all aspects of national defense security and people's production and life.

The iron and steel industry is an important basic industry of the national economy. Iron and steel products are used in all aspects of national defense security and people's production and life. Weapons and equipment, energy production, transportation, machine manufacturing, housing and construction are inseparable from iron and steel materials. At the same time, the iron and steel industry is also a typical high energy consumption, high emission industry. To do a good job in energy conservation and emission reduction in the iron and steel industry is of great significance for our country to realize "double carbon" goal. The steel industry has a high industrial correlation and a long industrial chain and supply chain. To promote the green and low-carbon development of the steel industry, we must make efforts from the steel industry chain and supply chain.

First, energy conservation and emission reduction of steel industry chain and supply chain is the key to "carbon reduction"

(1) Steel production has large carbon emissions and high unit energy consumption

The development stage of Chinese economy, the characteristic of resource endowment, and the heavy industrial structure and the mainly fossil energy structure have made the carbon emission base of our country large and grow fast. According to the report on China's Carbon Peak before 2030 released by the Global Energy Internet Development and Cooperation Organization, China's carbon emissions were about 10.5 billion tons in 2019, of which 9.8 billion tons were emitted from energy activities, accounting for 87%. In the carbon emission structure of energy activities, energy production and conversion and energy end consumption accounted for 47% and 53% respectively. The steel industry was the largest carbon emission industry of energy end consumption, accounting for 17% of the carbon emissions of energy activities, much higher than the second and third building materials (8%) and chemical industry (6%). In 2017, China emitted 2 tons of carbon dioxide per ton of steel, far higher than the international advanced level. In 2018, China's key large and medium-sized steel enterprises consumed 555kg of standard coal per ton of steel, far higher than Germany's 251kg of standard coal per ton and the United States' 276kg of standard coal per ton. It can be seen that the carbon emissions of steel production account for the largest proportion in the field of energy consumption at the same time, the unit energy consumption is high, there is a big gap compared with the international advanced level.

(2) Large flow of iron and steel, transportation links, large carbon emissions

At present, our country has built the most complete iron and steel industry system of global industrial chain, which effectively supported the steady and rapid development of steel demand for the downstream industry and national economy. The iron and steel production ranked first in the world for 25 consecutive years, resulting in huge material flow. One of the main reasons for the large amount of carbon emissions in Chinese iron and steel industry is the impact of resource endowment. In the transportation of raw materials, affected by the shortage of domestic natural mineral resources, especially high-grade mineral resources, iron and steel raw materials rely on imports, resulting in long-distance transportation. The second is affected by the layout of the iron and steel industry. Domestic raw materials are mainly reflected in the "north timber to south transport", which makes the transportation distance of raw materials involving iron ore, coking coal and other bulk materials is long. In the transportation of finished products, due to the large number of Chinese iron and steel enterprises, highly dispersed, widespread distribution, production area layout far away from the consumer market, so that the finished products need large-scale, long-distance transportation. The southeast coastal area, especially the Pearl River Delta area, has a large long-term demand, and the production capacity of the Bohai Rim area needs to flow to the south. Third, it is affected by production technology. Chinese iron and steel production is mainly based on long process technology, intra-plant transport complex. Usually from the output point of view, the annual output of crude steel reaches 1 billion tons, and the corresponding flow is about 10 billion tons, of which four become outside the plant transport, six become inside the plant transport. The fourth is affected by the mode of transportation of steel. Transportation is the second largest energy consumption carbon emission field. Roads consume the most energy, accounting for 83% of the total, followed by waterways. Railways are the cleanest and low-carbon mode of transport, accounting for 3% of the total. Chinese iron and steel logistics adopts highway transportation in large quantities, which inevitably produces large carbon emissions. Therefore, the iron and steel industry is affected by resource endowment, production layout, technology, transportation mode and other factors, with high output, large material flow and huge carbon emissions.

2. The steel industry must take effective measures to reduce carbon emissions

(1) Establish a carbon emission accounting system and guide industries to reduce carbon emissions

Carbon trading takes carbon dioxide emission right as a kind of commodity, thus forming the trading of carbon dioxide emission right. In 2011, China started a pilot program of carbon emission trading, and in 2013, the first carbon emission trading platform was launched in Shenzhen. Since then, Beijing, Tianjin, Shanghai, Guangdong, Hubei, Chongqing and other provinces and cities have launched carbon emission trading pilot programs. On July 16 this year, the national carbon emission trading market opened. As the power generation industry is in the field of energy production and conversion with the largest carbon emission in the whole society, it is the first to be included in the national carbon emission trading market.

In order to achieve the "double carbon" goal, the steel industry, as the industry with the largest carbon emission in the energy terminal consumption sector, is the key field of carbon control management. In the future, it will be included in the national carbon emission trading market, so as to promote the transformation of steel production enterprises to the direction of cleaner production and reduce carbon emissions. Therefore, it is urgent for iron and steel enterprises to carry out the construction of carbon emission accounting standard system, carbon control organization system and personnel training, so as to establish a carbon emission accounting system for the iron and steel industry and lay a foundation for the implementation of carbon quota allocation and carbon emission trading system.

2. Upgrading iron and steel production processes to reduce carbon emissions in production

The 14th Five-Year Plan calls for promoting clean and efficient use of coal and other fossil energy sources, and promoting green transformation of steel, petrochemical, building materials and other industries. The Research Report on China's Carbon Peak before 2030, issued by the Global Energy Internet Development and Cooperation Organization, puts forward that to achieve carbon peak, we should "replace the mode of energy production with clean energy and transform the mode of energy use with electricity".

The technological transformation of green steel production includes electric furnace steel making and hydrogen steel making. Electric furnace steelmaking is the main way to promote the replacement of electric energy. With scrap steel as the main raw material and electric power as the main energy source, this method has low energy consumption, low emissions and obvious advantages of energy saving and emission reduction. At present, the proportion of Chinese electric furnace steel making is only 9%, while the proportion of American and European Union electric furnace steel making is 62% and 40% respectively. Electric furnace steel making at present development condition is mature, energy saving and environmental protection, our country should adopt more low carbon electric furnace steel making, reduce carbon emissions in iron and steel production. Hydrogen steel making is beneficial to hydrogen instead of carbon monoxide as reducing agent for steel making. There is no carbon dioxide emission in the reduction process, and complete decarbonization of steel production can be realized, which is the future development direction.

(3) Steel logistics to green transformation, reduce steel supply chain carbon emissions

The green development of iron and steel logistics should be realized by changing the mode of transportation, developing multimodal transportation and developing intelligent transportation. The first is to change the mode of transport, on the one hand is to promote the "electricity instead of oil", to promote enterprises to use new energy vehicles for road transport. At present, China's new energy automobile industry is leading the world, new technologies continue to emerge, lithium battery cost continues to fall, hydrogen energy technology gradually mature application, has the advantage of developing new energy vehicles; On the other hand, from road transport to cleaner railway transport, reduce the proportion of road transport, increase the proportion of railway transport, speed up the construction of freight railway, solve the "last kilometer" problem, attract enterprises to choose railway transport. The "14th Five-Year Plan" proposed to speed up the transportation of bulk cargo and medium - and long-distance cargo "transit rail" and "transit water". Secondly, the development of multimodal transport, strengthen the construction of infrastructure, multimodal transport stations, logistics parks and so on. Finally, to develop intelligent transportation, first, the development of autonomous driving technology, according to the Ministry of Transport research, autonomous vehicles than human driving can save up to 12% fuel, more energy saving and environmental protection, at present, the rapid development of autonomous driving technology, the basic application conditions; The second is to build an information platform to promote the development of shared transportation modes and improve logistics pendulum. Through the information platform, real-time data exchange and information sharing can be realized to improve logistics efficiency.

Third, the implementation of carbon emission reduction measures in the steel industry has a huge impact on the cost

(I) The construction of carbon emission accounting system in the steel industry needs to increase investment. According to the requirements of the 14th Five-Year Plan, market-based trading of carbon emission rights should be promoted. The investment in the construction of carbon market is not only the investment in the construction of carbon emission system, but also the investment in the construction of various supporting measures within enterprises. The construction of carbon emission accounting system in iron and steel industry requires a large amount of human, financial and material input.

(2) The carbon emission cost of steel production is on the rise. Based on the pilot carbon emission quota spot trading market in the past few years, the general trend of most trading markets is that the total amount of trading is on the rise, and the average price of trading is on the rise. This indicates that the carbon emissions trading costs of enterprises that do not meet the standards will gradually increase. According to the trading data published by Guangzhou Carbon Emission Exchange, the annual trading volume of 2015 was 113,992 million yuan, far lower than that of 2020, 83,454.15 million yuan, and the average trading price of 25.58 yuan/ton in 2020 was higher than that of 16.38 yuan/ton in 2015. According to the trading data of the national carbon market released by Shanghai Environment Exchange, the trading volume of listed agreements was 5.052 million tons in the first month of the market opening (July 16 to July 30), the highest transaction price was 61.07 yuan/ton, and the average monthly transaction price was 51.86 yuan/ton, much higher than the trading price during the pilot period. In addition, the average closing price for the whole of 2018 was 17.45 euros/ton and 24.91 euros/ton for the whole of 2019, according to EU carbon quota trading data. As can be seen from the situation of carbon trading in Chinese and European Union, the price of trading is increasing continuously, and the cost of carbon emission in substandard enterprises is increasing constantly.

(3) Road transportation of steel logistics needs to pay the price for carbon emissions. According to the "double points" policy of the automobile industry (namely, the Parallel Management Measures for the Average Fuel Consumption of Passenger Car Enterprises and the Points of New Energy Vehicles), the average fuel consumption of passenger car enterprises will generate positive points if it is lower than the standard value, and negative points if it is higher than the standard value. The point trading market is a free trading market, and the price of each point at the highest time point can reach 3,000 yuan. In 2020, Changan Automobile will spend 740 million yuan to solve the problem of substandard points. The 100,000 points obtained by NexteV in 2019 will be sold in the second half of 2020 and bring a net income of 120 million yuan.

(4) Steel production needs to pay more costs for process transformation. The technological transformation of green steel production includes electric furnace steel making and hydrogen steel making. In the short term, technology research and development and process transformation need constant cost input. It will reduce carbon emissions and reduce the cost of carbon emissions in the long term.

(5) The green development of iron and steel logistics needs a lot of capital investment. Green logistics should be realized by changing the mode of transportation, developing multimodal transportation, developing smart transportation and other means. However, the transformation of related modes of transportation, infrastructure construction and logistics informatization construction all require a large amount of capital investment. In the short term, it will bring a large increase in costs, but in the long term, it will reduce the carbon emissions and improve the logistics efficiency of the steel supply chain, thus reducing the logistics costs of the steel industry. In order to achieve the goal of "double carbon", the iron and steel industry should actively explore ways to reduce cost and increase efficiency. The resource and environmental costs of green development will be included in the cost accounting system. To achieve green management, reduce energy intensity and reduce carbon emissions requires a large amount of resource and environmental costs. Therefore, resources and environmental costs should be taken into account in the overall cost of steel supply chain, and the previous cost accounting method of simply accounting production and logistics costs should be abandoned. Based on a comprehensive understanding of the overall cost of the iron and steel industry chain and supply chain, this paper systematically analyzes the impact of various factors on the cost with detailed cost data, and puts forward countermeasures to achieve the green development of the iron and steel industry to reduce cost and increase efficiency. At the same time, it is necessary to actively study changes in industrial layout, increase industrial concentration, optimize product structure and increase added value of products, change traditional management concepts, adopt short-distance multimodal transportation, informatization and digital means to improve production and transportation efficiency and improve recycling of solid gas and waste gas in steel production to reduce the cost of steel industry chain and supply chain. We will promote the healthy and sustainable development of the steel industry.

(Source: National Development and Reform Commission)

Key Words:

steel