Reducing carbon footprints in China's steel industry through sector-coupled energy system modeling and regionally differentiated hydrogen strategies

Shi, S., Zhang, Z., Zhou, W., Gao, H., & Ren, H. (2026). Reducing carbon footprints in China's steel industry through sector-coupled energy system modeling and regionally differentiated hydrogen strategies. Applied Energy 426 e128744. 10.1016/j.apenergy.2026.128744.

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Abstract

Hydrogen-based metallurgy is widely recognized as a critical technology for decarbonizing steel production. However, its carbon footprint depends heavily on upstream hydrogen production. Many assessments overlook indirect emissions and spatial heterogeneity due to a lack of integrated modeling linking industrial processes to power generation and hydrogen supply. This study develops a high-resolution energy system optimization model endogenously coupling steelmaking, grid carbon intensity, and diverse hydrogen production technologies to systematically assess direct and indirect emissions across different decarbonization strategies. Applying the model to China—where steel capacity and renewable resources are spatially mismatched—we compare four long-term scenarios: nationwide mandates (prioritizing hydrogen or scrap) versus a regionally differentiated strategy optimized for local resources. Results indicate that uniform hydrogen mandates generate substantial upstream emissions, offsetting direct mitigation gains. Hydrogen-related processes account for over 15% of cumulative emissions 2025–2060, adding 132 Mton CO2 annually compared to the regional strategy. In coal-dependent provinces, upstream emissions exceed 40% of the footprint, raising national cumulative emissions to 37 Gton. Conversely, the regional strategy reduces cumulative emissions to 32 Gton, approaching the scrap route (29 Gton), while lowering provincial carbon intensities below 0.3 tCO2/t-steel. This optimized approach cuts unit mitigation costs to $34.9/tCO2, 61% lower than uniform deployment ($90.1/tCO2). These findings demonstrate that focusing solely on direct emissions overstates mitigation effectiveness. The framework is transferable to other countries and hard-to-abate sectors with spatial industry-energy mismatches. By internalizing upstream emissions risks, this approach provides a robust analytical tool to guide cost-effective and environmentally sound industrial decarbonization worldwide.

Item Type:	Article
Depositing User:	Luke Kirwan
Date Deposited:	07 Sep 2026 07:16
Last Modified:	07 Sep 2026 07:16
URI:	https://pure.iiasa.ac.at/21845

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