China becomes world’s largest steel beneficiary of Kyoto

The UN Clean Development Mechanism has previously been heavily criticised for the slow pace of processing of projects. However, since late 2010 it has significantly increased the rate of project registration and carbon credit issuance. Since this report was first filed its has issued a further 1,019,113 credits to Chinese steelmakers and 74,068 to Indian steelmakers.

SBB 10 January 2011 The Chinese steel industry has received the most Certified Emissions Reductions (CERs) of any national steel industry worldwide after recently overtaking India, Steel Business Briefing analysis demonstrates. Chinese steelmakers, Handan Iron & Steel, Jinan Iron & Steel, Lianyuan Iron & Steel and Ma Steel, have all received allocations of Certified Emissions Reductions (CERs) over the last three weeks.

CERs are carbon credits granted to projects that reduce greenhouse gas emissions as part of the UN’s Clean Development Mechanism (CDM). These can then be sold to companies which can use them under cap and trade schemes or traded on exchanges. The steel industry worldwide has the potential to generate up to 17,199,051 CERs per year with a current market value of some $258.1m.

Since the beginning of the CDM Chinese steelmakers have been allocated a total of 11,228,597 CERs, compared to the Indian steel industry’s 9,164,351 CERs. Although the Indian industry has 45 registered projects compared to China’s 29, the Chinese projects tend to be larger, blast furnace-based projects and so have the potential to earn more credits.

Jinan Iron & Steel remains by far the largest Chinese beneficiary with 4,326,274 CERs issued, although India’s JSW has received the most credits worldwide with 7,347,168 CERs.

The Carbon Markets & Investors Association recently commended the CDM’s Executive Board for improving the efficiency of project registration and issuance of credits over the last few months. However, it also stated that waiting times are still double what they should be.


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