Green Targets offered five additional years of rising carbon emissions to its steel industry, sending iron ore skyrocketing as investors saw it as a renewed focus for the economy.
- Beijing changes its peak steel emission timeline
- Iron ore prices have risen more than 70% since November’s low
China’s steelmaking sector accounts for 15% of its carbon emissions. The government has set 2030 as the new peak emission deadline for this sector. This is in contrast to the earlier 2025 target. This is another sign that Beijing is revising its climate strategy after last year’s commodity price rises and priming the economy to receive a stronger, more carbon-intensive stimulus.
An analyst with Mysteel, Xu Xiangchun said, “This is a major adjustment to the timeline, which gives more space for the steel sector, to reach peak emissions in an orderly manner.” He said that rushing to reach carbon goals could result in “unbearable economic cost”.
Beijing’s Delay In Steel Curbs Hints At Stimulus: China Today
Beijing’s policy pivot is yet another indication that Beijing is shifting the course of its decarbonization plans in order to avoid inflation and shortages. Last month, President Xi Jinping stated that climate targets should not compromise the availability of commodities that “ensure a normal life for the masses”.
Iron ore prices soared to $150 per tonne, as there was a rise in expectations for increased infrastructure to ease China’s economic slowdown. Increasing construction activity leads to higher steel production, which raises iron ore demand and increases greenhouse gas emissions.
On the back of steady growth in 2022, the steelmaking raw material has seen a 70% increase since November’s plunge. Beijing has taken several measures to stabilize the economy after a severe property market slump and pandemics.
According to Li Shuo, an analyst from Greenpeace East Asia, this policy shift could put China at risk of achieving its 2030 goal of peak emissions. He said that traditional sectors like steel need to reach their peak earlier in order to make room for newer sectors like transportation.
The Ministry of Industry and Information Technology published the Monday statement on its website. It was also signed by the National Development and Reform Commission and the Ministry of Ecology and Environment.
Iron ore futures rose 3.8% to $153 per ton in Singapore, their highest level since Aug. 31. They traded at $148.20 at 4:20 p.m. local. Futures in Dalian rose 0.5% to 821 Yuan. In Shanghai, steel rebar and hot-rolled coil futures both advanced.
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