According to a report by the Centre for Research on Energy and Clean Air (CREA), China's accelerated transition to greener metallurgical production could reduce the industry's emissions by nearly 37% from its peak level by 2035. Analysts attribute this effect primarily to the expansion of electric arc furnace (EAF) capacities instead of the blast furnace-basic oxygen furnace (BF-BOF) model that still dominates the country. For the global market, this implies a potential shift in the steel supply structure, decarbonization approaches, and competitive advantages in export destinations.
What the CREA Scenario Predicts for Chinese Metallurgy
CREA estimates that the reduction in emissions within the Chinese metallurgical sector in recent years was mainly due to weaker demand and production cuts rather than full structural decarbonization. In 2025, China's steel production fell below 1 billion tons for the first time since 2020, decreasing by 4.4% year-on-year following a 1.4% decline the previous year. Collectively, this resulted in a reduction of CO2 emissions by approximately 150 million tons, which analysts say exceeds the impact of current policy measures.
At the same time, CREA emphasizes that the country did not meet its specified "green" target for 2025, and existing mechanisms effectively maintain the advantage of carbon-intensive BF-BOF production. If the EAF share in China grows to 15-20% by 2030, BF-BOF steel output could decrease by 80-120 million tons. This scale nearly matches Japan's annual steel production and approaches India's volumes, highlighting the systemic nature of these potential changes.
Additionally, CREA highlights the financial impact of this transformation. Under a scenario achieving a 20% EAF share by 2030, the sector's profit could increase by up to 220 billion yuan, while the asset-to-liability ratio would drop to 60-62%. This is significant considering that between 2020 and 2025, the liabilities of Chinese steel companies increased by more than 1 trillion yuan.
Market Impact and Solutions from winox.ua
For the global steel market, the acceleration of green modernization in China could be a double-edged factor. On one hand, weak domestic demand has already pushed the country toward a sharp increase in exports: from 54 million tons in 2020 to 134 million tons in 2025, with China's share in world steel trade rising from 13.3% to 29.2%. On the other hand, the increasing share of low-carbon steel strengthens the competitiveness of Chinese manufacturers against the backdrop of stricter carbon trade mechanisms, such as the EU's CBAM.
For industrial consumers and traders, this means that requirements regarding the origin, quality, and carbon profile of metal products will only intensify. In this environment, winox.ua, as a supplier of rolled metal, stainless steel, and non-ferrous metals, focuses on working with verified manufacturers and offers certified products that meet modern industrial market standards. This approach helps businesses better manage procurement when environmental criteria increasingly influence the choice of materials and suppliers.
An additional signal for the market is current production dynamics. In January-February 2026, China's steel production decreased by 3.6% year-on-year to 160.3 million tons, while pig iron output fell by 2.7%, and rolled products by 1.1%. If this trend aligns with structural EAF growth, the global metal supply chain will see new price and quality benchmarks.
Why the EAF and CBAM Theme is Becoming Strategic
The transition to electric steelmaking is already moving beyond a purely environmental agenda. For steel exporters, it is a matter of market access, where carbon transparency, certification, and verifiable product compliance with new regulatory requirements are becoming vital. This is why the Chinese scenario described by CREA is closely monitored not only by producers but also by companies purchasing metal for machinery, construction, and metalworking.
For the B2B segment, this necessitates longer-term procurement planning and a more careful selection of the supplier base. Companies that are already adapting their supply chains to future CBAM requirements and general decarbonization are gaining better resilience against regulatory and price fluctuations. In this context, the rolled metal market is gradually shifting from competing solely on price to competing on quality, verified origin, and technological compliance.