The iron and steel industry faces low-carbon transformation challenges due to its resource- and energy-intensive production processes. Accelerating the integration of the iron and steel industry into the Chinese national emissions trading system (China ETS) is crucial to its green and low-carbon development. On 21 January 2025, the Ministry of Ecology and Environment (MEE), issued two technical specifications for the carbon market, namely, the Guideline on Greenhouse Gas Accounting and Reporting for the Iron and Steel Industry (hereinafter referred to as Guideline on Accounting and Reporting) and the Guideline on Greenhouse Gas Verification for the Iron and Steel Industry (hereinafter referred to as Guideline on Verification).
The Guideline on Accounting and Reporting clarifies the data management requirements for carbon emissions of iron and steel enterprises included in the China ETS and provides guidance for the establishment of an internal carbon emission statistics and accounting management system for enterprises. It also specifies technical requirements, accounting methods and data quality management for accounting and reporting of GHG emissions in the iron and steel industry. The main points of the guideline are:
- Accounting and reporting of enterprise- and process-level emissions at the same time.
- Captive power plants of iron and steel enterprises, which originally were not included as part of electricity sector in the China ETS, are to carry out independent accounting and reporting as part of the process-level emission accounting of iron and steel enterprises.
- A mass balance approach shall be used to calculate emissions both at the enterprise- and process-level. Carbon emissions of each production process are calculated as the difference between input and output of carbon containing material into the production process.
- Detailed requirements for data quality management, including the requirement to specify the origins of key parameters and provide monthly data inventories.
- Specifications on how values of different parameters are determined and used. This includes enterprise- and process-level activity data, heat generation from solid fossil fuels, and product output.
The Guideline on Verification provides details for the verification of enterprise- and process-level GHG emission reports and related data of key emission units in the iron and steel industry. It aims to guide the auditors to comprehensively verify, check and record the contents of the GHG emission reports in accordance with the unified technical methodology and reporting format. It also clarifies the technical requirements, verification methods and data quality control mechanisms for verification of GHG emissions in the iron and steel industry. The main contents and objectives of the guideline are:
- Providing technical support for expanding the industry coverage of the China ETS by standardisation and quality control of emission verification in the iron and steel industry.
- Developing a standardised verification rulebook. It provides the verification methodology, precautions and other requirements of ‘checking, questioning, observing and examining’ for key parameters at the enterprise-level and process-level respectively.
- Focusing on the authenticity and accuracy of emission data, emphasising the control of the main risk points of verification, and ensuring that the risk of faulty data is minimised.
- Guiding enterprises to strengthen internal quality control of data and reinforcing the role of data quality control programs.
Overall, these two guidelines provide a standardised and operational guidance for the accounting, reporting and verification of GHG emissions in the iron and steel industry, and form the technical basis for expanding the industrial coverage of the China ETS.
关于印发《企业温室气体排放核算与报告指南 钢铁行业（CETS—AG—03.01—V01—2024）》等2项全国碳排放权交易市场技术规范的通知
The adaptation workshop series is part of the Sino-German Cooperation on Climate Change – NDC implementation project, a bilateral cooperation project commissioned by the German Federal Ministry for Economic Affairs and Climate Action (BMWK) as part of the International Climate Initiative (IKI), cooperating with the Ministry of Ecology and Environment of the People’s Republic of China (MEE) and jointly implemented by GIZ and China’s National Centre for Climate Change Strategy and International Cooperation (NCSC).
