In March 2010, Camco completed an investigation into technical and financial mechanisms to deliver greater energy efficiency and GHG emissions reductions in the Chinese iron and steel sector, and to explore sectoral mechanisms that could assist the sector to adapt to a low carbon economy. The project was funded by the British Foreign and Commonwealth Office (FCO) and supported by the Climate Change Department of the National Development and Reform Commission (NRDC), China’s principle Government department. The Energy Research Institute of NRDC and the China ESCO Association (EMCA) were our partners.This project achieved several milestones, including:

• First Camco advisory project funded by the FCO in China
• Successful collaboration with ERI and NDRC, helping to progress policy and raise awareness within China’s iron and steel sector on GHG emissions and sector approaches
• First heavy industry energy efficiency and GHG emissions reductions audit and technical training programme to be undertaken by Camco in China.

The Chinese iron and steel sector is the largest in the world, producing over 520 million tonnes in China in 2009, almost half of all global production. The IEA attributes around 19% of global final energy use and a quarter of direct industry GHG emissions to steel production, equivalent to 3% of global emissions.

Actions were carried out at three levels:

Local capacity building and project developmentCamco’s international and domestic experts conducted a five day energy audit for Chongqing Iron and Steel Group and identified specific savings worth RMB 16.3 million per year for the existing steel works and RMB 77.8 million per year for their new plant, as well as Clean Development Mechanism (CDM) potential. In parallel, we arranged two training seminars to increase capacity among local staff and the local Government’s energy conservation technical service centre.Financial awareness raising and networking workshopsCamco organised two workshops in Beijing, hosted by EMCA, to discuss energy efficiency and emission reduction technologies, such as those identified at the local level, and the financial requirements, barriers and opportunities of existing financing channels (e.g. loans, leasing and energy performance contracts), and options to incentivise savings beyond the CDM and post-2012, including sectoral approaches. A survey of participants was undertaken including eight Chinese financial institutions, three international financial institutions, seven Chinese steel companies and 19 ESCOs.National policy makers roundtableCamco and ERI organised two roundtable meetings involving NDRC, FCO, the Chinese Iron and Steel Association, Chinese steel companies and sector experts, to present research and discuss financing, CDM , sector approaches and solutions for encouraging greater emissions reductions. In addition, a targeted consultation was carried out to determine which sectoral approach is most appropriate for China.In March 2010, Camco and ERI completed the 18-month project and submitted the final report to the NDRC. This summarises the results of the study and our recommendations for policy makers, covering mechanisms and incentives, finance, awareness and services. This recommended initiation of a domestic emissions trading scheme focussing on a particular sector or group of sectors. In July 2010, the Chinese Government announced that it will launch a domestic carbon trading scheme as part of the 12th Five Year Plan.Click here to view the final report Camco-ERI-SPF-Iron-Steel-Report-EN-5-May-2010.pdf (359k)Size: 359k
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