*2.2. Production Route*

Iron and steel industry has a complex structure. However, only a limited number of routes are applied worldwide, and these production routes use similar energy resources and raw materials (Figure 4). Globally, steel is produced via two main routes, namely, the blast furnace–basic oxygen furnace (BF–BOF) route and the electric arc furnace (EAF) route. Iron and steel industry has a complex structure. However, only a limited number of routes are applied worldwide, and these production routes use similar energy resources and raw materials (Figure 4). Globally, steel is produced via two main routes, namely, the blast furnace–basic oxygen furnace (BF–BOF) route and the electric arc furnace (EAF) route.

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**Figure 4.** Steel production routes [17], with permission from World Steel Association 2012. **Figure 4.** Steel production routes [17], with permission from World Steel Association 2012.

In the BF–BOF route, iron ore is first processed into iron, also known as molten or pig iron. Then, the molten iron is converted into steel in a converter. After refining, casting, and rolling, the steel is In the BF–BOF route, iron ore is first processed into iron, also known as molten or pig iron. Then, the molten iron is converted into steel in a converter. After refining, casting, and rolling, the steel is delivered in the form of steel plates, section steel, or steel bars.

delivered in the form of steel plates, section steel, or steel bars. The EAF route uses electricity to melt scrap steel in an electric arc furnace. Additives, such as alloys, can be added during steelmaking to adjust the required chemical composition of the steel, and oxygen can be injected into the EAF. The downstream processing stages of this route, such as casting, The EAF route uses electricity to melt scrap steel in an electric arc furnace. Additives, such as alloys, can be added during steelmaking to adjust the required chemical composition of the steel, and oxygen can be injected into the EAF. The downstream processing stages of this route, such as casting, reheating, and rolling, are similar to those of the BF–BOF route.

reheating, and rolling, are similar to those of the BF–BOF route. The key difference between the BF–BOF and EAF routes is the type of raw materials consumed. The main raw material of the BF–BOF route is iron ore (generally accounting for 70%–100% of the total raw material); scrap, pig iron, and hot-pressed iron are also added. By comparison, the EAF route produces steel using mainly recycled steel (generally accounting for over 70% of the total raw material consumed) [18]. Depending on the plant configuration and availability of recycled steel, The key difference between the BF–BOF and EAF routes is the type of raw materials consumed. The main raw material of the BF–BOF route is iron ore (generally accounting for 70%–100% of the total raw material); scrap, pig iron, and hot-pressed iron are also added. By comparison, the EAF route produces steel using mainly recycled steel (generally accounting for over 70% of the total raw material consumed) [18]. Depending on the plant configuration and availability of recycled steel, other sources of metallic iron, such as direct reduction iron (DRI) or hot metal, can also be used in the EAF route.

other sources of metallic iron, such as direct reduction iron (DRI) or hot metal, can also be used in the EAF route. In 2017, the BF–BOF and EAF routes respectively accounted for 71.6% and 28.0% of the world's total steel production; another 0.4% of the world's steel production was derived from the open-hearth route [3]. China, Japan, Russia, Korea, Germany, Brazil, and Ukraine, as some of the world's major steel producers, use the BF–BOF route as their main route of steel production; the EAF route is used In 2017, the BF–BOF and EAF routes respectively accounted for 71.6% and 28.0% of the world's total steel production; another 0.4% of the world's steel production was derived from the open-hearth route [3]. China, Japan, Russia, Korea, Germany, Brazil, and Ukraine, as some of the world's major steel producers, use the BF–BOF route as their main route of steel production; the EAF route is used as the main mode of steel production in the United States, India, and Turkey (Table 1).

**Table 1.** Crude steel production by process in 2017.

**Country BF–BOF EAF Open-Hearth**

China 90.7 9.3 - Japan 75.8 24.2 -

**(%) (%) (%)**

as the main mode of steel production in the United States, India, and Turkey (Table 1).


**Table 1.** Crude steel production by process in 2017.

#### *2.3. Production Technology Development*

Given the rapid growth of China's steel production began in the 1990s, the country's energy consumption has also increased dramatically. Therefore, China attaches great importance to energy conservation in the steel industry. Implementing energy-saving technology is an effective way to reduce energy consumption in steel production. Over the past 30 years, China has made remarkable progress in the development of energy-saving technologies in steel production, and the technical indicators of China's steel industry have considerably improved.

2.3.1. Implementation Rates of Coke Dry Quenching and Top Pressure Recovery Turbine Technologies

Coking and blast furnace (BF) are the highest energy-consuming processes in steel production. Using coke dry quenching (CDQ) and top-pressure recovery turbine (TRT) technologies can effectively reduce the EI of coking and BF. In 2000, the implementation rates of CQD and TRT technologies of China' steel industry were only 12% and 14%, respectively (Table 2). After years of development, the implementation rates of CQD and TRT technologies increased to 90% and 99% in 2015, respectively, and the total number of CDQ units in China now exceeds 200 sets (processing capacity 25,000 t/h). Approximately 700 TRT-equipped BFs exist in China, of which 597 are gas dry dedusting equipment [19,20].


**Table 2.** Implementation rates of CDQ and TRT in China.

#### 2.3.2. By-Product Gas Recovery and Utilization

By-product gas resources are the most important secondary energy resource in steel production. A large amount of energy can be saved by recycling and utilizing by-product gas resources. The recovery and utilization rates of China's key steel enterprises are relatively high (Table 3), and over 98% of the BF gas and coke oven gas produced was recycled, and converter gas recovery was 114 m<sup>3</sup> /t in 2017 [19,20].


**Table 3.** Recovery and utilization of by-product gas in China's key steel enterprises.

#### 2.3.3. Power Generation from Secondary Energy

Energy consumption for steel production only accounts for 30% of the total energy consumption, and the remaining 70% of the energy consumed is converted into various forms of waste heat and residual energy, such as by-product gas resources, the sensible heat of slag, and the waste heat of products [20,21]. These waste heat and residual energy resources can be used to preheat materials, generate steam or self-contained power plants, and generate power. *Metals* **2020**, *10*, x FOR PEER REVIEW 6 of 19 products [20,21]. These waste heat and residual energy resources can be used to preheat materials, generate steam or self-contained power plants, and generate power.

In 2017, power generation from secondary energy resources in China's key steel enterprises accounted for approximately 41.3% of the total electricity consumption (Figure 5), of which 57.8% originated from by-product gas, 16.2% from TRT, 11.7% from CDQ, 5.0% from sintering waste heat, and 9.3% from other secondary energy sources [19]. In 2017, power generation from secondary energy resources in China's key steel enterprises accounted for approximately 41.3% of the total electricity consumption (Figure 5), of which 57.8% originated from by-product gas, 16.2% from TRT, 11.7% from CDQ, 5.0% from sintering waste heat, and 9.3% from other secondary energy sources [19].

**Figure 5.** Power generation from secondary energy resources in China's key steel enterprises. **Figure 5.** Power generation from secondary energy resources in China's key steel enterprises.

#### *2.4. Energy Consumption 2.4. Energy Consumption*

Steel enterprises use numerous energy evaluation indicators, such as comprehensive EI and comparable EI, as well as EI indicators for coking, sintering, pelletizing, ironmaking, steelmaking, and rolling process. In this section, the EI of China's steel industry is comprehensively described through an exhaustive analysis of various indicators. Steel enterprises use numerous energy evaluation indicators, such as comprehensive EI and comparable EI, as well as EI indicators for coking, sintering, pelletizing, ironmaking, steelmaking, and rolling process. In this section, the EI of China's steel industry is comprehensively described through an exhaustive analysis of various indicators.

#### 2.4.1. Overall Energy Consumption

2.4.1. Overall Energy Consumption The comprehensive EI includes all forms of energy directly consumed by steel enterprises and their auxiliary production systems and the total amount of energy actually consumed by subsidiary production systems directly serving the production of steel enterprises [22]. The comprehensive EI is calculated as follows: The comprehensive EI includes all forms of energy directly consumed by steel enterprises and their auxiliary production systems and the total amount of energy actually consumed by subsidiary production systems directly serving the production of steel enterprises [22]. The comprehensive EI is calculated as follows:

$$
\varepsilon\_{\text{Comprehensive}} = \frac{E\_{\text{i}}}{P} \tag{1}
$$

Comprehensive = , (1) where *E<sup>i</sup>* is the energy consumption of the i category energy, kgce; *P* is the steel production, t.

made remarkable progress in increasing their overall energy efficiency (Figure 6.).

where is the energy consumption of the i category energy, kgce; is the steel production, t. From 2006 to 2017, the comprehensive EI of China's steel industry decreased from 645 kgce/t to 571 kgce/t (decrease by 11.5%) [19,23,24]. This reduction shows that China's steel enterprises have From 2006 to 2017, the comprehensive EI of China's steel industry decreased from 645 kgce/t to 571 kgce/t (decrease by 11.5%) [19,23,24]. This reduction shows that China's steel enterprises have made remarkable progress in increasing their overall energy efficiency (Figure 6).

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**Figure 6.** Comprehensive EI of China's steel industry. **Figure 6.** Comprehensive EI of China's steel industry.

#### 2.4.2. EI of the Production Process 2.4.2. EI of the Production Process

The EI of the production process reflects the energy consumption of the main production processes in steel production. From 2006 to 2017, the EI of the production process of China's key steel enterprises decreased dramatically: The EI of sintering, pelletizing, coking, BF, and steel processing respectively decreased by 12.8%, 20.1%, 19.0%, 9.6%, and 5.0%, respectively (Table 4) [19,23–25]. The EI of the production process reflects the energy consumption of the main production processes in steel production. From 2006 to 2017, the EI of the production process of China's key steel enterprises decreased dramatically: The EI of sintering, pelletizing, coking, BF, and steel processing respectively decreased by 12.8%, 20.1%, 19.0%, 9.6%, and 5.0%, respectively (Table 4) [19,23–25].


**Table 4.** The EI of production process of China's key steel enterprises. (Unit: kgce/t). **Table 4.** The EI of production process of China's key steel enterprises. (Unit: kgce/t).

#### 2016 47.78 26.16 97.46 387.75 −12.24 65.90 61.78 2.4.3. Comparison of EIs between Steel Industries in China and the World

2017 48.49 26.17 99.67 391.37 −14.26 60.22 61.73 2.4.3. Comparison of EIs between Steel Industries in China and the World Comparable EI is used to compare the energy consumption of steel production in different enterprises or countries; this parameter represents the sum of energy consumption in each production process [26]. The Comparable EI is calculated as:

$$\mathbf{e}\_{\text{Compurable}} = (1/\mathcal{P}) \left( \sum \mathbf{P}\_{\text{i}} \times \mathbf{e}\_{\text{i}} + \mathbf{I} + \mathbf{J} + \mathbf{K} \right) \tag{2}$$

where P<sup>i</sup> is the production of i process, t;

measures.

eComparable = (1/P)(∑ P<sup>i</sup> × e<sup>i</sup> + I +J+ K), (2) ei is the average energy consumption of the i process, kgce/t product;

where P<sup>i</sup> is the production of i process, t; ei is the average energy consumption of the i process, kgce/t product; I, J, and K are the energy consumption for processing and transportation of fuel, energy consumption for locomotive transportation, and changes in enterprise energy stock, respectively.

I, J, and K are the energy consumption for processing and transportation of fuel, energy consumption for locomotive transportation, and changes in enterprise energy stock, respectively. According to the International Energy Agency (IEA) and the Research Institute of Innovative Technology for the Earth [27,28], Japan possesses the world's most energy-efficient steel industry. All According to the International Energy Agency (IEA) and the Research Institute of Innovative Technology for the Earth [27,28], Japan possesses the world's most energy-efficient steel industry. All steel mills in Japan use existing technologies with minimal potential for further energy-conservation measures.

steel mills in Japan use existing technologies with minimal potential for further energy-conservation

China's steel industry has achieved good results in reducing energy consumption over the last 20 years (Figure 7). However, a wide gap remains between the steel industries of China and Japan [8]. 20 years (Figure 7). However, a wide gap remains between the steel industries of China and Japan [8].

China's steel industry has achieved good results in reducing energy consumption over the last

**Figure 7.** Comparable EI of steel enterprises in China and Japan. **Figure 7.** Comparable EI of steel enterprises in China and Japan.

#### *2.5. CO<sup>2</sup> Emissions 2.5. CO<sup>2</sup> Emissions*

Traditional steel production relies heavily on fossil fuels, such as coal and coke. Therefore, China's steel industry has become the second largest national emitter of CO<sup>2</sup> after the power industry. In 2015, CO<sup>2</sup> emitted by China's steel enterprises accounted for over 15% of the country's total CO<sup>2</sup> emissions [5,6]. CO<sup>2</sup> emission from steel enterprises is mainly caused by coal combustion. Coal accounts for Traditional steel production relies heavily on fossil fuels, such as coal and coke. Therefore, China's steel industry has become the second largest national emitter of CO<sup>2</sup> after the power industry. In 2015, CO<sup>2</sup> emitted by China's steel enterprises accounted for over 15% of the country's total CO<sup>2</sup> emissions [5,6].

approximately 80% of the energy consumption structure in China's steel enterprises [4]. According to statistics, CO<sup>2</sup> emissions from China's iron-making system (sintering, pelletizing, coking, and blast furnace) account for approximately 85% of the total emissions from the steel industry [29,30]. Therefore, reducing CO<sup>2</sup> emissions from the iron front process is imperative. In 2015, at the Paris Climate Conference, the Chinese government proposed reducing CO<sup>2</sup> emissions per unit GDP by 65% compared with 2005 levels by 2030 and establishing a national carbon CO<sup>2</sup> emission from steel enterprises is mainly caused by coal combustion. Coal accounts for approximately 80% of the energy consumption structure in China's steel enterprises [4]. According to statistics, CO<sup>2</sup> emissions from China's iron-making system (sintering, pelletizing, coking, and blast furnace) account for approximately 85% of the total emissions from the steel industry [29,30]. Therefore, reducing CO<sup>2</sup> emissions from the iron front process is imperative.

emissions trading market in 2017 [30]. The latter proposal will integrate eight industries, including electricity, steel, and cement, into one system to promote overall carbon emission reduction. Therefore, China's steel enterprises are facing the severe situation of CO<sup>2</sup> emission reduction. Using scrap instead of iron ore can directly reduce the production of the iron-making system and drastically reduce energy consumption and CO<sup>2</sup> emissions. The EI of direct steel-making with scrap is only 30% that of the BF–BOF route. This finding indicates that using one ton of scrap in China's steel production can save 350 kgce and reduce CO<sup>2</sup> emissions by 1.4 tons [31]. In 2015, at the Paris Climate Conference, the Chinese government proposed reducing CO<sup>2</sup> emissions per unit GDP by 65% compared with 2005 levels by 2030 and establishing a national carbon emissions trading market in 2017 [30]. The latter proposal will integrate eight industries, including electricity, steel, and cement, into one system to promote overall carbon emission reduction. Therefore, China's steel enterprises are facing the severe situation of CO<sup>2</sup> emission reduction.

At present, scrap consumption per ton of steel in China is far below the world's average level (specific description is in Section 3.1). In the future, China's recyclable scrap resources will increase substantially as the scrap consumed in previous decades gradually reaches their recycling cycle, and increasing the use of scrap steel in steel production will become an inevitable trend. Using scrap instead of iron ore can directly reduce the production of the iron-making system and drastically reduce energy consumption and CO<sup>2</sup> emissions. The EI of direct steel-making with scrap is only 30% that of the BF–BOF route. This finding indicates that using one ton of scrap in China's steel production can save 350 kgce and reduce CO<sup>2</sup> emissions by 1.4 tons [31].

**3. Comparison of Steel Industries between China and the World** Over the last two decades, China's steel industry has made remarkable achievements in reducing its EI by improving technology levels and promoting energy-saving technologies; these efforts have resulted in considerable reductions in the energy consumption of steel production. However, a gap still remains between the EIs of key enterprises between China and the world's At present, scrap consumption per ton of steel in China is far below the world's average level (specific description is in Section 3.1). In the future, China's recyclable scrap resources will increase substantially as the scrap consumed in previous decades gradually reaches their recycling cycle, and increasing the use of scrap steel in steel production will become an inevitable trend.

#### **3. Comparison of Steel Industries between China and the World**

Over the last two decades, China's steel industry has made remarkable achievements in reducing its EI by improving technology levels and promoting energy-saving technologies; these efforts have resulted in considerable reductions in the energy consumption of steel production. However, a gap still remains between the EIs of key enterprises between China and the world's advanced level. Therefore, in the future, reducing energy consumption will remain a key issue for China's steel industry. In this section, the main reasons behind this EI gap are analyzed by comparing steel production in China and other countries.

#### *3.1. Di*ff*erence in Scrap Ratio* China's steel industry. In this section, the main reasons behind this EI gap are analyzed by comparing steel production in China and other countries.

Iron ore and scrap steel are the two main raw materials for steel production. Compared with that of iron ore, using scrap in steel production can save energy and resources by reducing the production of iron-making systems. *SR* is used to define scrap consumption in steel production: *3.1. Difference in Scrap Ratio* Iron ore and scrap steel are the two main raw materials for steel production. Compared with

advanced level. Therefore, in the future, reducing energy consumption will remain a key issue for

$$\text{Scrap ratio} = \frac{\text{Scrap consumption}}{\text{steel production}} \tag{3}$$

(3)

Over the last 10 years, the SR of the global steel industry remained at 35%–40%, and is approximately 37% on average. Among the world's major steel-producing countries, the United States has the highest SR of 75%, which fluctuates considerably. The EU's SR is also high at approximately 55%–60%, South Korea's average is approximately 50%, and Japan's average is approximately 35% [32]. The SR of China's steel industry was only 11.2% in 2016. The consumption of scrap resources per ton of steel in China is considerably lower than the global average, and this gap has a negative impact on energy conservation because processing of iron ore into hot metal requires a large amount of energy and resources. steel production Over the last 10 years, the SR of the global steel industry remained at 35%–40%, and is approximately 37% on average. Among the world's major steel-producing countries, the United States has the highest SR of 75%, which fluctuates considerably. The EU's SR is also high at approximately 55%–60%, South Korea's average is approximately 50%, and Japan's average is approximately 35% [32]. The SR of China's steel industry was only 11.2% in 2016. The consumption of scrap resources per ton of steel in China is considerably lower than the global average, and this gap has a negative impact on energy conservation because processing of iron ore into hot metal requires a large amount of energy and resources.

A low SR leads to the dependence of China's steel enterprises on iron ore as the main raw material. The SR and iron–steel ratios of key steel enterprises in China from 2006 to 2016 are calculated according to China Steel Yearbook [33]. As shown in this Figure 8, the scrap ratio of China's key enterprises declined from 2006 to 2016, and the corresponding iron–steel ratio showed an opposite increasing trend. This dependence explains why the iron–steel ratio of the country's iron-making system is higher than that of other countries. A low SR leads to the dependence of China's steel enterprises on iron ore as the main raw material. The SR and iron–steel ratios of key steel enterprises in China from 2006 to 2016 are calculated according to China Steel Yearbook [33]. As shown in this Figure 8, the scrap ratio of China's key enterprises declined from 2006 to 2016, and the corresponding iron–steel ratio showed an opposite increasing trend. This dependence explains why the iron–steel ratio of the country's ironmaking system is higher than that of other countries.

**Figure 8.** Scrap ratio and iron–steel ratio of China's key steel enterprises. **Figure 8.** Scrap ratio and iron–steel ratio of China's key steel enterprises.

In 2016, China's iron–steel ratio was 0.867; by comparison, the global average iron–steel ratio was 0.734. The global average was only 0.573 after deducting China's iron–steel ratio [20]. The iron– steel ratios of the United States and Germany are 0.333 and 0.646, respectively. Generally, if the ironsteel ratio increases by 0.1, the comprehensive EI of steel production will increase by about 50 kgce/t, so the comprehensive EI of China is about 110–250 kgce/t higher than the advanced level just because of the high iron-steel ratio [20]. In 2016, China's iron–steel ratio was 0.867; by comparison, the global average iron–steel ratio was 0.734. The global average was only 0.573 after deducting China's iron–steel ratio [20]. The iron–steel ratios of the United States and Germany are 0.333 and 0.646, respectively. Generally, if the iron-steel ratio increases by 0.1, the comprehensive EI of steel production will increase by about 50 kgce/t, so the comprehensive EI of China is about 110–250 kgce/t higher than the advanced level just because of the high iron-steel ratio [20].

#### *3.2. Di*ff*erences in Production Structure*

Energy consumption and pollutant emissions in steel enterprises are mainly concentrated in iron-making systems (from the iron ore entering the plant to coking, sintering, pelletizing, and ironmaking). Therefore, the energy consumption of the BF–BOF route is generally higher than that of *3.2. Differences in Production Structure*

the EAF route (Figure 9). Compared with the BF–BOF route, direct steelmaking with scrap via the EAF route can save approximately 60% of the energy expenditure to produce steel and reduce CO<sup>2</sup> emissions by 80% [34–37]. ironmaking). Therefore, the energy consumption of the BF–BOF route is generally higher than that of the EAF route (Figure 9). Compared with the BF–BOF route, direct steelmaking with scrap via the EAF route can save approximately 60% of the energy expenditure to produce steel and reduce CO<sup>2</sup> emissions by 80% [34–37].

*Metals* **2020**, *10*, x FOR PEER REVIEW 10 of 19

iron-making systems (from the iron ore entering the plant to coking, sintering, pelletizing, and

**Figure 9.** Energy intensity of the BF–BOF and EAF routes **Figure 9.** Energy intensity of the BF–BOF and EAF routes.

Increasing the use of the EAF route can reduce energy consumption in steel production. However, production through EAF is limited by the availability of scrap steel resources. The actual situation of scrap resources varies greatly in different countries and regions around the world. Some countries (regions) have abundant scrap resources and low prices; in this case, additional EAF steel plants can be built and additional scrap steel can be consumed in converters. For example, in the United States, the proportion of EAF steel accounts for over 60% of the total crude steel production. In some developing countries with insufficient scrap resources, the BF–BOF route remains the main mode of steel production. For example, in China, the EAF steel ratio has hovered at approximately 10% over the last few years [7]. Increasing the use of the EAF route can reduce energy consumption in steel production. However, production through EAF is limited by the availability of scrap steel resources. The actual situation of scrap resources varies greatly in different countries and regions around the world. Some countries (regions) have abundant scrap resources and low prices; in this case, additional EAF steel plants can be built and additional scrap steel can be consumed in converters. For example, in the United States, the proportion of EAF steel accounts for over 60% of the total crude steel production. In some developing countries with insufficient scrap resources, the BF–BOF route remains the main mode of steel production. For example, in China, the EAF steel ratio has hovered at approximately 10% over the last few years [7].

Insufficient scrap storage is the main reason behind the low SR in China. Scrap recycling has a certain cycle, and China began to use a large number of steel products in 2000. Thus, a large gap in scrap resources exists in China. Therefore, over the last 30 years, China's steel production growth has mainly originated from the BF–BOF route, and the production of EAF steel has been stable due to the limitation of scrap quantity. From 2000 to 2017, the production of China's BF–BOF route rose by over 800%; thus, the Insufficient scrap storage is the main reason behind the low SR in China. Scrap recycling has a certain cycle, and China began to use a large number of steel products in 2000. Thus, a large gap in scrap resources exists in China. Therefore, over the last 30 years, China's steel production growth has mainly originated from the BF–BOF route, and the production of EAF steel has been stable due to the limitation of scrap quantity.

proportion of the EAF route in China has continuously declined (Figure 10). In 2017, China's BF–BOF production accounted for 90.7% of total steel production, while its EAF production accounted for only 9.3%, which is far below the world average level (28%) [3]. From 2000 to 2017, the production of China's BF–BOF route rose by over 800%; thus, the proportion of the EAF route in China has continuously declined (Figure 10). In 2017, China's BF–BOF production accounted for 90.7% of total steel production, while its EAF production accounted for only 9.3%, which is far below the world average level (28%) [3]. *Metals* **2020**, *10*, x FOR PEER REVIEW 11 of 19

**Figure 10.** Development of the BF–BOF and EAF routes in China. **Figure 10.** Development of the BF–BOF and EAF routes in China.

*3.3. Differences in Energy Structure*

of energy, such as biomass (Figure 11).

only 1% of the energy consumption. The remaining energy consumption is provided by other types

**Figure 11.** Energy structure of the world's steel industry.

have a certain impact on the energy efficiency of steel production.

The energy structures of different countries vary remarkably. For example, coal and natural gas account for 76% and 2% of energy consumption in China's steel industry, respectively [4]. By contrast, only 24% of the energy consumption of the United States comes from coal; 47% comes from natural gas (Figure 12). The energy structures of different steel-producing countries differ, and the industrial conversion efficiencies of different kinds of energy vary. Thus, differences in energy structure will

According to IEA statistics, the energy consumption of the steel industry in 2017 accounted for

#### *3.3. Di*ff*erences in Energy Structure 3.3. Differences in Energy Structure*

emission reduction.

[7,40,41].

*3.4. Differences in Industrial Concentration*

to consume less energy than small-scale enterprises.

According to IEA statistics, the energy consumption of the steel industry in 2017 accounted for 17% of the world's total industrial energy consumption. In terms of total energy consumption, coal is the main energy source (64% of the total energy consumption), followed by electricity (20% of the total energy consumption) and natural gas (11% of the total energy consumption) [4]. Oil contributes only 1% of the energy consumption. The remaining energy consumption is provided by other types of energy, such as biomass (Figure 11). According to IEA statistics, the energy consumption of the steel industry in 2017 accounted for 17% of the world's total industrial energy consumption. In terms of total energy consumption, coal is the main energy source (64% of the total energy consumption), followed by electricity (20% of the total energy consumption) and natural gas (11% of the total energy consumption) [4]. Oil contributes only 1% of the energy consumption. The remaining energy consumption is provided by other types of energy, such as biomass (Figure 11).

**Figure 10.** Development of the BF–BOF and EAF routes in China.

*Metals* **2020**, *10*, x FOR PEER REVIEW 11 of 19

**Figure 11.** Energy structure of the world's steel industry.

**Figure 11.** Energy structure of the world's steel industry. The energy structures of different countries vary remarkably. For example, coal and natural gas account for 76% and 2% of energy consumption in China's steel industry, respectively [4]. By contrast, only 24% of the energy consumption of the United States comes from coal; 47% comes from natural gas (Figure 12). The energy structures of different steel-producing countries differ, and the industrial conversion efficiencies of different kinds of energy vary. Thus, differences in energy structure will The energy structures of different countries vary remarkably. For example, coal and natural gas account for 76% and 2% of energy consumption in China's steel industry, respectively [4]. By contrast, only 24% of the energy consumption of the United States comes from coal; 47% comes from natural gas (Figure 12). The energy structures of different steel-producing countries differ, and the industrial conversion efficiencies of different kinds of energy vary. Thus, differences in energy structure will have a certain impact on the energy e *Metals*  fficiency of steel production. **2020**, *10*, x FOR PEER REVIEW 12 of 19

**Figure 12.** Energy structures of the steel industries of China (**left**) and the United States (**right**) in **Figure 12.** Energy structures of the steel industries of China (**left**) and the United States (**right**) in 2017.

2017. In industrial production, the energy efficiency of natural gas is higher than that of coal regardless of their use in fuel or power generation, and the carbon emission of natural gas is lower than that of coal. Using 1 m<sup>3</sup> of natural gas can save 0.76–1.19 kgce and reduce carbon emissions by 3.33–5.01 g compared with the using coal [38]. At present, the main energy source of steel production in China In industrial production, the energy efficiency of natural gas is higher than that of coal regardless of their use in fuel or power generation, and the carbon emission of natural gas is lower than that of coal. Using 1 m<sup>3</sup> of natural gas can save 0.76–1.19 kgce and reduce carbon emissions by 3.33–5.01 g compared with the using coal [38]. At present, the main energy source of steel production in China is coal, and the proportion of natural gas in the energy consumption of China's steel industry is

is coal, and the proportion of natural gas in the energy consumption of China's steel industry is drastically lower than the world average; this situation is unfavorable for energy savings and carbon

In China, EI varies among steel enterprises of different scales, and the EI of small steel enterprises is generally higher than that of key steel enterprises, due to small size production equipment being mostly used in small steel enterprises, which are of high production energy consumption [39]. In addition, the management and technological advantages of large-scale steel enterprises allow them

Over the past decade, the concentration of China's steel industry has shown a downward trend (Figure 13), with the concentration of the top 10 enterprises declining from 45% in 2001 to 36% in 2016. By contrast, in Japan, the concentration of the top five enterprises accounted for over 80% of the country's total steel production, and the large-scale production of steel industry has been achieved

**Figure 13.** Industrial concentration of China's steel industry.

2017.

drastically lower than the world average; this situation is unfavorable for energy savings and carbon emission reduction. emission reduction. *3.4. Differences in Industrial Concentration*

drastically lower than the world average; this situation is unfavorable for energy savings and carbon

**Figure 12.** Energy structures of the steel industries of China (**left**) and the United States (**right**) in

In industrial production, the energy efficiency of natural gas is higher than that of coal regardless of their use in fuel or power generation, and the carbon emission of natural gas is lower than that of coal. Using 1 m<sup>3</sup> of natural gas can save 0.76–1.19 kgce and reduce carbon emissions by 3.33–5.01 g compared with the using coal [38]. At present, the main energy source of steel production in China

*Metals* **2020**, *10*, x FOR PEER REVIEW 12 of 19

#### *3.4. Di*ff*erences in Industrial Concentration* In China, EI varies among steel enterprises of different scales, and the EI of small steel enterprises

In China, EI varies among steel enterprises of different scales, and the EI of small steel enterprises is generally higher than that of key steel enterprises, due to small size production equipment being mostly used in small steel enterprises, which are of high production energy consumption [39]. In addition, the management and technological advantages of large-scale steel enterprises allow them to consume less energy than small-scale enterprises. is generally higher than that of key steel enterprises, due to small size production equipment being mostly used in small steel enterprises, which are of high production energy consumption [39]. In addition, the management and technological advantages of large-scale steel enterprises allow them to consume less energy than small-scale enterprises. Over the past decade, the concentration of China's steel industry has shown a downward trend

Over the past decade, the concentration of China's steel industry has shown a downward trend (Figure 13), with the concentration of the top 10 enterprises declining from 45% in 2001 to 36% in 2016. By contrast, in Japan, the concentration of the top five enterprises accounted for over 80% of the country's total steel production, and the large-scale production of steel industry has been achieved [7,40,41]. (Figure 13), with the concentration of the top 10 enterprises declining from 45% in 2001 to 36% in 2016. By contrast, in Japan, the concentration of the top five enterprises accounted for over 80% of the country's total steel production, and the large-scale production of steel industry has been achieved [7,40,41].

**Figure 13.** Industrial concentration of China's steel industry. **Figure 13.** Industrial concentration of China's steel industry.

Increasing the production proportion of large-scale enterprises is a development trend in China's steel industry. According to "Adjustment Policy of Iron and Steel Industry" published in 2015, the concentration of the top 10 steel enterprises in China should not be less than 60% by 2025, and three or five super-large steel enterprise groups with strong competitiveness in the global scope should be formed.

#### **4. Development Directions for Energy Savings and Emission Reduction in China's Steel Industry**

After decades of rapid development, China's steel production has entered the peak arc region, and, in the medium and long term, overall steel production is not expected to increase. According to relevant plans published by the Chinese government, in the future, China's steel industry will focus on industrial restructuring to solve problems arising from previous rapid development stage. Eliminating backward production capacity (technological upgrading), promoting energy-saving technologies, and restructuring production are key directions for energy savings and emission reduction.

#### *4.1. Eliminating Dackward Production Capacity*

Overcapacity, a common problem currently faced by the global steel industry, presents a very serious challenge to China. In 2015, the excess capacity of China's steel industry was 336.2 Mt, accounting for 46% of the global excess capacity [42]. At the same time, China also retains backward capacity, which affects the total energy consumption of steel production. Against this background, the Chinese government published "Opinions on the Iron and Steel Industry to Eliminate Overcapacity and Realize Development from Difficulties," which demands the following: the crude steel production

capacity should be reduced by 10–150 Mt within five years from 2016, and future development should aim at industry merging and reorganization, industrial structure optimization, and resource utilization efficiency improvement.

China strictly enforces the energy conservation law and defines backward production capacity in accordance with process energy consumption. Steel production capacity that fails to meet mandatory standards, such as "Energy Consumption Limit for Products of Major Processing Units in Crude Steel Production", should be reformed and upgraded within six months (Table 5). The steel production involved in this effort is estimated to range from 10 Mt and 150 Mt; this amount will effectively improve the energy efficiency of China's steel industry.


**Table 5.** Energy consumption requirements for new and reformed steel enterprises [43].

China's steel industry eliminated backward production capacity by 65 Mt in 2016 and by 55 Mt in 2017. The productivity utilization rate has increased from approximately 70% in 2015 to over 85% in 2017 [44], as shown in Table 6.


**Table 6.** Effect of the elimination of backward productivity.
