The world's largest carbon trading market is slowly gaining momentum and will eventually be a key component of China's ferrous industry, market sources told Fastmarkets this week.
China kicked off nationwide carbon trading on July 16, with mostly thermal coal-fired power plants participating on the first day. Companies can buy carbon emission quotas from the market, while those with lower emissions can sell them.
This is meant to gradually reduce overall carbon emissions from its major industries and reduce pollution in line with the country's 14th Five-Year Plan.
China plans to eventually include more industries - including steelmakers and cement producers - in the carbon trading program in the near future.
Growing impact
"Carbon trading has been a global phenomenon. Participating in carbon trading seems inevitable for mills in the future," a southern Chinese mill representative told Fastmarkets on Thursday July 22.
A trader in eastern China told Fastmarkets: "The policy may be positive for large blast furnace-based steel mills that have completed their transformation into ultra-low carbon emission producers."
But it will have a bigger negative impact...